Connecticut’s pension funds hold less than $1 million in direct holdings in firearms manufacturing firms, state Treasurer Denise L. Nappier said late Wednesday, but her office is reviewing indirect holdings and will “scrutinize” its policy on all gun-related investments.
The state’s pension funds, with more than $23 billion in total value, is limited to $57,233 in stock and $830,500 in bonds of Alliant Techsystems, a Virginia-based maker of solid rocket motors and military and commercial ammunition.
“As a shareholder of Alliant Techsystems, the Newtown tragedy makes it abundantly clear that we must scrutinize our direct exposure, as well as our indirect exposure to companies throughout the supply chain,” Nappier said in a written release.
“I join the nation in mourning the tragic deaths…and have, like countless others, considered what can be done to avoid another such senseless tragedy,” Nappier said. “I am reviewing our investment exposure to not only gun manufacturers, but also to those companies that distribute these weapons.
“My interest is ensuring that any company in which Connecticut pension funds are invested conducts its business consistent with our standards for responsible corporate citizenship — which includes considerations of public safety and the well-being of our children.”
That’s not an empty platitude coming from Nappier, as she has been at various times one of the nation’s most aggressive fund fiduciaries when it comes to corporate responsibility — especially on the issues of splitting the roles of chairman and CEO, and on executive pay.
The surprise is that the state funds’ holdings in the firearms industry are not larger. The two publicly traded U.S. gunmakers are both nearby, Smith & Wesson in Springfield and Sturm, Ruger & Co. in Fairfield, Both firms have had a dramatic share price run-up since President Obama was elected in 2008.
The industry was born in the Connecticut River Valley and there are still many local employees in firearms, chiefly at Colt Defense LLC and Colt’s Manufacturing Co., which are privately owned in West Hartford. The state pension funds invested $25 million in Colt’s in the early 1990s, before the company sought bankruptcy protection, and another $10 million after the bankruptcy but before the company split in two.
Connecticut is not the only state reviewing its holdings in the firearms industry. On Monday, the California state treasurer ordered a similar review and said it may be inconsistent for that state to hold investments in companies whose products are illegal there.
Connecticut, like California, has an assault weapons ban but manufacturers have ways of getting around it, and the semi-automatic rifle used by the shooter in Newtown was legal in this state.
Nappier’s announcement came on the same day when Obama vowed to enact stricter gun laws. Companies including Colt Defense and industry groups such as the National Shooting Sports Foundation, based in Newtown, and the National Rifle Association, have expressed outrage and condolences in the massacre but have not yet weighed in on the rising national calls for a renewal of an assault weapons ban.
On Tuesday, Cerberus Capital Management, which owns several gun manufacturers, including Bushmaster, maker of the rifle used in Newtown, shocked the industry by announcing it will sell the Freedom Group, exiting the business. The father of Stephen Feinberg, the Cerberus founder, lives in Newtown.
The NRA said Tuesday it will “offer meaningful contributions to help make sure this never happens again.”