The defense industry makes more money from ordinary people than it does from card-carrying killers like the one who murdered seven adults and 20 children in Newtown, Connecticut. Organizations such as the California State Teachers’ Retirement System (CalSTRS) invested a half-billion dollars into a fund worth $7.5 billion with Cerberus Capital Management. Cerberus Capital Management is a privately-owned firearms group that acquired Bushmaster, a gun company. The CalSTRS could potentially have a 6.67 percent stake in the company. Freedom Group is a part of Cerberus Capital Management.
“The California State Teachers’ Retirement System (CalSTRS) committed to invest a whopping $500 million into a $7.5 billion Cerberus fund that has helped bankroll Freedom Group. That means that it effectively could own a 6.67% stake in the gun maker, which filed to go public in late 2009 before pulling the offering in early 2011. In fact, the figure could be even higher since CalSTRS also committed $100 million to a $1.4 billion predecessor fund, which likely made the original investment.
[Update: CalSTRS said Tuesday afternoon that it owns 2.4% of Freedom Group, and I have requested an explanation of how they arrive at that figure.]
What I honestly don’t understand, however, is why. Check out the following part of the pension system’s statement on investment responsibility:
Non-economic factors will supplement profit factors in making investment decisions. Non-economic factors are defined as those considerations not directly related to the maximization of income and the preservation of principal. The consideration of non-economic factors is for the purpose of ensuring that the Retirement System, either through its action or inaction, does not promote, condone or facilitate social injury.
Does Freedom Group not facilitate social injury? I’m not suggesting that social injury is its mission, but it certainly is a foreseeable consequence.”
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