Howie Hawkins, the Green Party candidate for State Comptroller, announced that he would use social criteria as well financial concerns in determining how to invest the state $100 billion plus pension fund. Hawkins said he would start by divesting from government bonds in Israel until it complies with United Nations resolutions. Hawkins also said that environmental concerns should be made part of the state's audits and tax systems.
Jennifer Daniels, the Green nominee for Lt. Governor, joined Hawkins in calling for an overhaul of the state's economic development program. Daniels also harshly criticized Pataki and the State Legislature for their efforts to curtail civil liberties following September 11th, and called upon Congress to stand up to Bush and put a halt to his plans to launch a ground war against Iraq.
"A government that failed to protect us from the worst act of terrorism in US history is now seeking to muzzle the voice of citizens that might criticize it under the guise of anti-terrorist legislation. We must repeal the New York State Anti-Terrorism Act of 2001, oppose the USA Patriot Act, and oppose the drive toward war in Iraq. War abroad and repression at home must be opposed. They mean federal cuts to New York for social and environmental programs and loss of our freedom to influence policy," stated Daniels.
Hawkins said that one of his first steps would be to remove State Pension investments in the bonds of the Israeli government unless they complied with the various United Nation resolutions regarding the occupied territories. The pension fund has at least $178 million invested in State of Israeli bonds and state companies. Hawkins also criticized the present State Comptroller, Carl McCall, for repeatedly failing to vote for shareholder resolutions that promoted environmental protection, and human and labor rights.
Hawkins also said that he would invest the pension funds in companies that are anchored to New York by their ownership structure, particularly worker cooperatives, and would expand the Comptroller's audits to examine environmental as well as financial practices. Jennifer Daniels, the Green Party nominee for Lt. Governor, joined with Hawkins in criticizing the state's economic development program and echoed the need to invest in small community oriented firms. New York already distributes $2 billion a year in corporate welfare. A recent report by Citizen Action documented that many large corporate welfare packages distributed by the Empire State Development Corporation went to companies that made large campaign contributions to Governor Pataki. Charles Gargano, the head of ESDC, has been a major fundraiser for Pataki.
"Corporate welfare allows the politicians to rob us the same way Enron executives robbed their investors and employees. Corporate welfare is outright fraud. It is a transfer of billions of dollars from private citizens and small business to large corporate political donors. The promised increased corporate investments, jobs, and improved tax base have not materialized. Just the opposite. Small to medium sized businesses that have been paying taxes are leaving the state. The remaining jobs are lower paying. Investment is declining."
Last week Stanley Aronowitz, the Green candidate for Governor, observed that "Economic development funding should be investing in building a community's infrastructure and educating and training local workers. Instead, the two major parties over the last thirty years have developed a game of smokestack chasing, where states and communities throw money at corporations to shift jobs from one community to another".
If the State continues to distribute billions in corporate welfare packages, the Greens support legislation to require companies to actually create jobs with the public economic development funds they receive. Companies that fail to meet agreed upon goals for creating living wage jobs should be required to return a proportionate amount of their welfare. The Greens would deny public subsidies to companies that violate environmental, labor, consumer or civil rights laws.
Hawkins said that the State Comptroller should consider the social as well financial impacts of the state's investments.
"It makes no sense for the pension fund, which is workers' deferred earnings, to be invested in companies or governments that harm workers' human rights, economic opportunities, or their environment. Social investing means first of all doing no harm. It means not always voting with management on shareholder resolutions as the current Comptroller, Carl McCall has done. It means voting for shareholder resolutions that support human rights and the environment," stated Hawkins.
A recent report by the Village Voice found that "Comptroller Carl McCall, who calls himself the "largest single investor in America," has used the power of the state's $112 billion pension fund to insulate major corporations from shareholder challenges on environmental, human rights, and other issues." The Voice said that McCall for instance voted against resolutions calling on companies to adopt the CERES principles, a code of conduct developed by the Coalition of Environmentally Responsible Economies, a partnership of investor, environmental, and labor groups formed after the 1989 Exxon Valdez oil spill them 88 out of 95 times. In 2001, McCall abstained on 31 of the 36 human rights resolutions he voted on (his spokesman conceded that abstentions have the same effect as negative votes times). McCall also abstained on or opposed all 22 resolutions between 1993 and 1997 that attempted to get companies to examine their Mexican labor operations, particularly at maquiladoras near the border.
Hawkins said that social investing also means divesting from companies or governments that persist in harmful actions. One case where divestment is in order is the Common Retirement Fund's $78 million investment in State of Israel Bonds and $100 million investment bonds of the state-owned Israel Electric Company. Until Israel withdraws from the occupied territories and makes a genuine commitment to a two-state solution based on the rights and security of both Israelis and Palestinians, the pension fund should boycott investments in the Israeli government.
"The fact that the pension fund is invested in the Israeli government bonds is itself a social investment. But it was made with the wrong criteria -- in this case Carl McCall's self-serving political need to support the Israeli occupation. These politicized investments were made clear by McCall when he visited Israel last March in a junket financed by State of Israel Bonds. At that time he released a picture, still linked on his campaign web site, showing him firing an M-16 rifle near an Israeli tank. This statement is particularly objectionable after the miliary campaigns conducted by Israel in the occupied territories in recent months.
Hawkins said that social investing also means pro-actively seeking investments in New York enterprises in order to create more jobs and wealth in New York, and giving preference to democratic enterprises whose ownership structures anchor those investments in New York.
"Traditional investments in capitalist enterprises leaves those investments vulnerable to being used to finance corporate moves out of state in pursuit of cheaper labor, lower taxes, and less regulation. On the other hand, investments in cooperatives and other forms of community-owned enterprises are guaranteed by those ownership structures to stay in New York and keep on working for New Yorkers," said Hawkins. Hawkins noted that social investing is also good financial policy. Investment funds using social screens have out performed other funds financially, as documented in a new book, "The SRI Advantage: Why Socially Responsible Investing Has Outperformed Financially" The book's author is a fellow Green, Peter Camejo, the Green candidate for California governor, the founder of the investment firm, Progressive Asset Management, and a member of the board governing Contra Costa County's public pension fund.
Hawkins also spoke in favor of environmental audits and ecological taxes.
"As Comptroller, I would begin a program of environmental audits to run parallel to the fiscal audits conducted by the comptroller. Environmental audits would set benchmarks for the use of energy, paper, and other materials in terms of both efficient use and ecologically sound sources. This program will save taxpayers money at the same time it reduces adverse impacts on the environment by government operations," Hawkins stated.
"It is also time to replace the regressive across-the-board sales with selective ecological taxes on socially harmful products. Eco-taxes will bring the prices of harmful products closer to their true social and environmental costs by forcing private firms to internalize social and environmental costs into their prices rather than continuing to externalize these costs on to society and the environment. Eco-taxes will create consumer disincentives to the purchase of harmful products and producer incentives that enable ecologically sustainable products to compete with and replace harmful products," noted Hawkins.
The sales tax is the most regressive tax in New York. The bottom 20% of income earners pay 7.4% of their income in sales taxes. The middle 20% pays 4.7%. The top 1% pays just 1.1%.
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