Editorial: It took a while, but CalPERS finally saw the light of divestment

It’s never too late to do the right thing.

With the announcement this week that CalPERS (the California Public Employees Retirement System) will finally divest its holdings in companies that do business with Iran, the state took a big leap in putting pressure on the tyrannical regime in Tehran, which poses a dire threat to Israel and the world.

It did take the pension fund giant an awfully long time to get here.

The State Assembly passed its bill in 2007, requiring CalPERS and its sister pension, CalSTRS (the fund for teachers) to divest from Iran. CalPERS, in particular, resisted the move, claiming any such divestment would adversely impact the fund’s value and, thus, its pensioners.

They seemed to have no such problem when the law demanded they divest from South Africa during the height of the apartheid period.

CalPERS did not relent out of any sudden realization as to the error of its ways. As the nation’s largest public pension program (its assets total $236 billion), CalPERS is akin to the 800-pound gorilla. Its brain trust clearly does not like being dictated to, especially regarding where it chooses to invest.

But public pressure on the fund had grown too strong.

Jewish organizations such as the Jewish Public Affairs Committee and the Jewish Community Relations Council led the way.

JPAC in fact frequently met behind the scenes with CalPERS board members, urging them to follow both the spirit and then letter of the law.

Together with them and state legislators keeping up the political pressure, CalPERS finally saw the writing on the wall.

Will this divestment step result in the ayatollahs of Iran dismantling the country’s nuclear program or toning down its eliminationist rhetoric about Israel? Of course not. No one action will do so.

But steady sanctions and divestment will eventually cause a financial stranglehold so great within Iranian society, forces within that country will spark change. Iranian President  Mahmoud Ahmadinejad and his theocratic overlords may be borderline crazy, but not everyone in Iran is willing to risk bankruptcy and pariah status.

With enough pressure, change will surely come to Iran.

The fight isn’t fully over. CalSTRS has yet to fully divest, and with an even tougher follow-up bill working its way through the State Senate now, we may see further resistance from both pension giants.

Still, we applaud CalPERS for taking this step. This is a battle worth fighting — every step of the way.