Assemblyman Alberto Torrico, D-Newark, withdrew AB 1967 the same day that Governor Arnold Schwarzenegger announced his opposition in an L.A. Times editorial , according to the Sacramento Bee. Torrico, in a press release, said he remains committed to the issue but will put the bill on hold in order “to properly address some of the concerns that have been raised.”
Officials at the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) had said AB 1967 would have cost them billions of dollars (see CalSTRS Board Rejects Law Barring Sovereign Wealth Investments ). The bill would have prevented the two funds from investing in private-equity firms wholly or partly owned by foreign governments that don’t comply with major human-rights agreements.
According to the Bee, critics had said the bill was really an attempt to help the Service Employees International Union. The SEIU has been trying to organize workers at a nursing-home chain owned by private-equity firm the Carlyle Group – and one of Carlyle’s investors is Abu Dhabi, a member state of the United Arab Emirates, which has a poor human-rights record, according to the U.S. State Department.
While CalPERS and CalSTRS wouldn’t have been forced to sell their existing multibillion-dollar investments with Carlyle, they said they would have been prevented from making new investments with many private-equity firms.
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