On February 21 the California Public Employees Retirement System stunned financial markets in Asia when it said it would withdraw its $450 million investments in publicly traded companies in Indonesia, Thailand, the Philippines and Malaysia to comply with new investment guidelines on human rights, labor standards and other political factors.
But the new guidelines don't apply to the fund's substantial investments in private equity markets, including its $475 million stake in the Carlyle Group--nor does CalPERS, the nation's largest public pension fund, see any reason why it should. "I don't have any moral reservations at all" about Carlyle, said Michael Flaherman, chairman of the investment committee of CalPERS.
The $151 billion CalPERS retirement fund, the largest such fund in the world, is invested on behalf of California's 1.2 million state workers and includes $35 billion invested overseas. The fund's relationship with Carlyle began in 1996; over the next four years it invested $330 million in two Carlyle funds, including $75 million in Carlyle Asia Partners. The relationship deepened last spring when CalPERS invested $175 million to buy a 5.5 percent stake in Carlyle. The relationship--so close that CalPERS owns the elegant office building in Washington, DC, where Carlyle's headquarters are located--is far more important to Carlyle than it is to CalPERS, industry analysts said. "CalPERS is called an anchor investor," explained David Snow, editor of PrivateEquityCentral.net, an industry newsletter. "When Carlyle goes to other investors, they can say CalPERS is in."
Carlyle's experience with CalPERS has apparently whetted its appetite for labor pension money. According to an official close to Carlyle, the bank is raising money for a $750 million fund to invest in "worker-friendly companies." Of that total, Carlyle hopes to attract at least $250 million in labor pension money, the official said. Questions about pension fund investments in private equity have become more relevant since the collapse of Enron, with which CalPERS had extensive private business partnerships. Several unions, including the Service Employees International Union (SEIU), strongly opposed the partnerships as well as CalPERS investments in Enron stocks and bonds. Those concerns included Enron's support for energy privatization, its employment of former government officials to lobby for privatization and its sordid human rights record in India. (CalPERS made $133 million from one Enron partnership and may see a gain on another; it lost $105 million on its stock and bond holdings.)
Within the labor movement, CalPERS is highly respected for its cooperation in challenging managers and corporations suspected of violating human rights or abusing workers. In 1999 CalPERS supported two union-backed candidates for the board of Maxxam during a bitter strike by the United Steelworkers of America (USWA). Two years ago CalPERS joined the AFL-CIO in an investors' boycott when the Chinese government and Goldman Sachs took Petrochina, a state-owned oil company, public. The fund's new standards for public investments in emerging markets are the culmination of more than two years of sometimes fierce internal debate. CalPERS investment managers must now consider a wide range of non-economic factors, including a country's political stability, financial transparency and record on labor standards, workers' rights and building democracy. Based on a review by Wilshire Associates, the CalPERS pension consultant, thirteen emerging markets, including Turkey, South Korea and South Africa, passed the test, compared with four that failed. The fund had already banned its managers from investing in publicly traded companies in China and India. "CalPERS is taking more steps in this direction than any pension fund we know about," said Damon Silvers, the AFL-CIO's associate general counsel who focuses on investment strategy.
In December Carlyle sent its three founding partners to Sacramento to brief the CalPERS investment board. One, David Rubenstein, made passing reference to the budding media interest in Carlyle, noting that Carlyle's activities are "visible and under increasing scrutiny." To protect the Carlyle and CalPERS names, he assured the board that Carlyle is "following the highest ethical standards" by "avoiding investments in industries including tobacco, gambling and firearms."
But Carlyle's deep involvement with the military-industrial complex and its ties to the Bush Administration continue to raise questions. Both the SEIU and the Communications Workers of America are collecting information on Carlyle to provide to their pension trustees.
Down the road, Carlyle's investments in Asian companies facing downsizing, manufacturers in China and military conglomerates in Turkey could present serious dilemmas. It's not hard to find contradictions: Carlyle already has investments in China, which is on the CalPERS blacklist for public stock markets, and it is gearing up for more. Liu Hong-Ru, a former official with China's central bank who sits on Carlyle's Asian Advisory Board, is a senior adviser to Petrochina, the company whose public offering CalPERS boycotted in 2000. Until last year, Carlyle was the official adviser to Saudi Arabia's offset program, which allows buyers of US military hardware to use their purchasing power to pressure companies to transfer technology and jobs to their economies. "In effect, Carlyle was telling another country how to leverage their purchases of military equipment in ways that create the most jobs in that country, not this country," said Randy Barber, an expert on offsets at the Center for Economic Organizing in Washington.
Some trade unionists also know from experience that private equity funds aren't the best judge of what constitutes a worker-friendly environment. In 1998 several unions involved with CalPERS were shocked to learn that CalPERS was a partner with a private restructuring fund for Asia run by New York financier Wilbur Ross that played a key role in the suppression of a strike in South Korea. The strike led to the imprisonment of forty Korean trade unionists.
Investors in Carlyle's equity funds include state pension plans in Delaware, Florida, Louisiana, Michigan, New York and Texas, as well as in Los Angeles County. Others are the Ohio Workers Compensation Bureau and Union Labor Life Insurance, a union-run insurance company. According to industry newsletters, union pension funds with significant holdings in private equity markets include SEIU, the USWA, the Hotel and Restaurant Employees, the United Food and Commercial Workers, and the Union of Needletrades, Industrial and Textile Employees.
He says that what he said about the Jews
(They own and thus manipulate the news)
Is not, of course, reflective of his views.
So what part of the news did those Jews lose?
Langston Hughes on the real Harlem renaissance.
"I went down to Tommy Thompson's house," the crowd sang.
If you want to read everything The Nation has ever published on the women's rights movement and feminism, click here for information on how to acquire individual access to the Archive--an electronic database of every Nation article since 1865.
Nation pay rates, you may have heard from brother Trillin, are not those of Condé Nast. Every once in a while I don't mind this, because the job just kind of does itself. Take this week: I couldn't decide which of the many McCarthyite wing-nuts currently accusing ex-lovers and comrades of being liars, gay-bashers, anti-Semites and spouse-abusers merited an entire column. None of them did. But hey, I got a column out of just trying to figure it out.
(1) Weekly Standard writer David Frum took a job as a supposedly anonymous White House speechwriter. But his wife, novelist Danielle Crittenden (yes, she's the one who tells women to use their husband's name professionally but doesn't bother with that silliness herself), could not bear to see hubby's genius go unrecognized and sent out a mass e-mail claiming his authorship for Bush's nonsensical "axis of evil" formulation. Tim Noah, Slate's Cindy Adams, owns this baby. He published the offending e-mail. ("It's not often a phrase one writes gains national notice...so I hope you'll indulge my wifely pride in seeing this one repeated in headlines everywhere!!") He quoted her stepdaddy's Canadian newspaper telling the same tale. And he cited other possible authors. Later Frum, thinking twice, decided Bush had thunk it up all by his lonesome. (When you think about it, it's just foolish enough...) Anyway, speechwriters are not supposed to take credit for anything, even dumb ideas, and now Davy's unemployed. Bob Novak blames wifey's e-mail. Davy says Bobby's a liar and he was quitting anyway. Now, "Nofacts" is a well-known McCarthyite fabulist, but Mr. Crittenden does not improve his own credibility much by claiming that W. has "proven himself to be one of the great presidents of American history." So who's really writing fiction here? You be the judge.
(2) Wall Street Journal editorial writer John Fund has landed on Page Six in a bizarre tale that is almost too weird to write down. It seems that a woman with whom Fund had an affair twenty years ago named Melinda Pillsbury Foster sent her daughter, Morgan, to look up Fund when she came to town. One thing led to another and the results appear to have been a live-in relationship and an abortion. This is strange enough for a Wall Street Journal editorial writer who, although very much a gentleman in person, penned some of the most vicious and irresponsible material about Clinton and the Democrats outside the columns of this magazine. (Fund is also a ghostwriter for Rush Limbaugh and, irony of ironies, is widely believed to be the source of Matt Drudge's libelous claim that Sidney Blumenthal is a wife-beater.) Anyway, things did not exactly work out. Mother and daughter decided to take their revenge by uploading onto the web a taped telephone call in which John attempts to reconcile his support for Morgan's abortion with his "family values" politics. They then informed the media that John and Morgan had decided to wed after all. This turned out to be false, but the next thing you know, Fund is gone from the Journal's editorial page, arrested in Manhattan for battery of Melinda and under a restraining order. (Join me for a moment in imagining what the Wall Street Journal/Washington Times/New York Post/Fox News/Rush Limbaugh/American Spectator scandal machine would do with this crazy story if it were about, say, Frank Rich.) In the meantime, I am inclined to accept Fund's denials absent contrary evidence. Politically the man may be a menace, but his accusers have already proven themselves to be--to coin a phrase--"a little bit nutty." You pays your money and you picks your liar.
(3) Ever wonder what it must have felt like to be a right-winger and lay your hands on Whittaker Chambers's Witness for the first time? Run, don't walk to your corner bookstore. David Brock's Blinded by the Right: The Conscience of an Ex-Conservative is a liberal's Stairway to Heaven. Absolutely everything we thought about these bozos in the vast right-wing conspiracy turns out to be true and then some. Meet Anti-Semite Ann Coulter, Homophobe Johnny Podhoretz, Lovesick Matt Drudge, etc. Like Chambers, Brock is a confessed liar, an ex-ideologue and a formerly closeted homosexual who conspired with people and publications specializing in McCarthyite slander of innocent liberals, minorities and gays. For Chambers fans, anyway, that should do it.
(4) Washington Post writer Michael Kelly says of his column: "It's not that important to me.... It's a busman's holiday." Here I am pretty confident Kelly is telling the truth. Complaining of a negative reference to the State of the Union in a New York Times Op-Ed by Mark Lilla, Kelly, who edits both National Journal and The Atlantic Monthly, recently joked that the author was "a professor of something called social thought (presumably, there are professors of antisocial thought too, but no one knows who they are since they won't answer the phone)." LOL. Apparently nobody at the Post takes Kelly's column seriously either. Had Kelly spent a few minutes on research, he might have discovered that the University of Chicago's Committee on Social Thought has been the home of such nobodies as Friedrich Hayek, Hannah Arendt, Harold Rosenberg, Saul Bellow and Allan Bloom. Today the novelist J.M. Coetzee, the poet Mark Strand and George Bush's favorite bioethicist, Leon Kass, all hang their homburgs there alongside that of Lilla, who is also the ex-editor of the neoconservative Public Interest. Since none of the above are pacifists--or as Kelly would put it, "evil...objectively pro-terrorist.... Liars. Frauds. Hypocrites"--perhaps one might even rate a contribution to the once-great Atlantic.
(5) Speaking of verbal diarrhea, Scaife-funded David Horowitz has just published another of his entertainingly insane pamphlets; this one joining fellow McCarthyite Andrew Sullivan in blaming the "Fifth Column" left for September 11. Last time I mentioned Horowitz, he responded, "Eric Alterman apparently thinks lying is a form of mooning." I don't know what that means, but it does confirm my long-held belief that one Panther-loving Commie-turned-reactionary-racebaiter sure does spend a lot of time with his head up his ass.
The targeting of "terrorist" groups harks back to earlier repression of dissent.
Sen. Ted Kennedy has passed away at the age of 77. This 2002 Nation profile by the late Jack Newfield captures the essence of what this legend meant to the progressive movement.
From Afghan farms into the Tajik mountains, the drug trade cuts a wide swath.
Boston's Bernard Cardinal Law deserves the Watergate Award for Obfuscatory Declamation: He has characterized his nearly two decades of cover-up of felonies--namely, the rape and molestation of hundreds of Boston-area children by scores of priests--as "tragically incorrect." Records uncovered by the Boston Globe's Spotlight Team disclose the shocking extent to which Law's cold-shouldering of young victims made him an enabler of known recidivist pedophiles, including former priest John Geoghan, whose thirty-six-year spree of child sexual exploitation ended in a prison sentence on February 21.
Over and over, Law sought to pay hush money to victims of known molesters and then moved the predators to new parishes, where they once again had access to children. For years Law counted on the cooperation of several judges who, sharing his belief that the faith of rank-and-file church members might not survive a reckoning with the truth about the priestly criminals in their midst, moved to seal archdiocese files. Even as the child-rape stories were breaking, Law permitted his lawyers to pursue a defense based on "comparative negligence"--the theory that the abuse was partially due to victims' negligence.
Ever since Superior Court Judge Constance Sweeney's November ruling forced public release of documents detailing the crimes, the Cardinal's voice has had a from-the-bunker timbre. At his official residence, Law has been hunkered down with wealthy male advisers from Boston's Catholic elite--bankers, executives, university presidents and politicians who together calibrate the spin of each statement that issues from the Chancery. But sometimes a furious Law bursts through the kitchen-cabinet insulation: His Nixonian response to the news that nearly half of polled Boston Catholics want him to resign--including those faithful who keep a Law-Must-Go vigil in front of his residence--was to declare them enemies of the Church. His persistent disparagement of the Globe reporters who sued to unseal those documents is not a response to stress; it's his longstanding M.O. In 1992, after the Globe exposed Father James Porter as a serial rapist, the cosmopolitan Harvard-man Cardinal inveighed, "By all means, we call down God's power upon the media, particularly the Globe."
While the US Catholic Church has so far paid out $1 billion in settlements for clerical molestation cases, the predator priests are less emblems of fatal flaws in doctrine--including the doctrine of celibacy--than they are evidence of the mortal danger posed by any institutional leadership that perpetuates the myth that it is answerable to no laws but its own. (This presumption of immunity has taken an ominous new turn, as bishops across the country fling priests alleged to have molested from their jobs: As one Massachusetts picket sign reads: There Is No Due Process in Cardinal's Law.) Protestants have sustained public-relations catastrophes and paid huge sums for years of cover-ups: In December the Anglican Church of Canada announced that ten of its thirty dioceses are facing bankruptcy as a result of child sexual-abuse claims. Australian Governor General Peter Hollingworth faces mounting cries for his resignation since evidence surfaced that while he was an archbishop, he grossly mishandled cases of pedophilia. The children sexually exploited by Deacon Robert Tardy of Washington's Peace Baptist Church have never heard one word of apology from church authorities. Predators and their protectors are also ensconced within synagogue walls. This past summer Boca Raton's Jerrold Levy, rabbi of the largest Reform congregation in the South, was prosecuted for procuring underage boys in four states via the Internet. After he was convicted on one count, federal prosecutors abruptly reversed their sentencing recommendation from sixty years to six and a half, reportedly because of pressure from influential synagogue members. Several weeks ago Cantor Howard Nevison of Manhattan's famed Temple Emanu-El was arrested for an alleged two-generation-long rampage of child rape; some suspect his low bail is connected to Manhattan DA Robert Morgenthau's position as a trustee of Nevison's temple.
As Law's regime wrapped a blanket around criminals in the priesthood, it swung a terrible swift sword in the direction of women aspiring to fuller participation in Catholic liturgy. Two years ago, an organization called Massachusetts Women-Church, made up primarily of lifelong-Catholic mothers and grandmothers advocating the ordination of women, was banned by Law from church-affiliated buildings. When members picketed outside a church, Law shouted at them, "You are in violation of your faith!"
Treating women as contaminants and children as invisible while coddling criminals in Roman collars allowed Boston's imperial bishopric to shore up support for Law's real goal: making a permanent move to Rome as the first American Pope. If Law had been, say, director of a daycare center or a summer camp, he would probably be on his way to jail. But with powerful people at his elbows, Law is as unlikely to serve prison time as he was to let the violated bodies of children get in the way of his career building. When Boston Catholics finally force him out, he'll probably be humming "My Way" as he packs his bags.