Money makes the world go around, keeping governments big and small in operation, crossing international borders to tell nations and companies what public policies to follow.
Late last year, the public employee pension funds of California and New York pressured the private equity firm that owns Freedom Arms, Cerberus Capital, into putting the firearms manufacturing group up for sale. It appears now that was only the beginning of a program of threatened disinvestment that has now taken on an international dimension.
Firearms and ammunition manufacturers, distributors and retailers are being told what policies to follow in operating their businesses at the risk of losing both investors and access to credit.
TheGunMag has evidence that the program is now in operation in Europe, but so far we have not been able to prove its application in the US, although it originated here. Perhaps the European push is related to development and implementation of the UN Arms Trade Treaty.
Guided by the “Sandy Hook Principles,” a disinvestment concept first announced on Jan. 14 by Philadelphia Mayor Michael Nutter, a member of Mayors Against Illegal Guns, over $100 billion in pension funds can be used to drive public policy on guns. Little media notice was taken when the Sandy Hook Principles were adopted in January by the Philadelphia Board of Pensions & Retirement on a motion by the city’s solicitor, Shelley Smith, who was also a member of the board. Later in January, the Sandy Hook Principles were endorsed by the US Conference of Mayors, and still gained little media.
The Philadelphia pension board later retained MSCI to administer the campaign and in a letter dated June 20, 2013, MSCI began reaching out to gun-related firms in Europe. That’s where TGM got copies of the documents related to application of the Sandy Hook Principles campaign.
MSCI describes itself as a leading provider of investment decision support tools to around 7,500 clients worldwide, ranging from large pension plans to boutique hedge funds. Located in 22 countries around the world, and with over 2,700 employees, MSCI says it is dedicated to supporting the increasingly complex needs of the investment community with groundbreaking new products, high quality data, superior distribution and dedicated client support.
The language of the MSCI letter clearly indicates an attempt to shape US gun control policy and legislation.
The preamble to the Sandy Hook Principles says it is intended “to encourage positive corporate behavior by gun and ammunition manufacturers, distributors and retailers by establishing a baseline standard for responsible conduct and business practices to help ensure maximum safety for our citizens. Accordingly, the Principles promote progressive actions by these companies towards eliminating the substantial and unjustified risk to human health and life associated with inadequately regulated firearm use.”
The letter obtained by TGM tells companies that they will be given a chance to sign a letter pledging to follow a specified policy course before being listed as a Non-Compliant Company. Once listed as such, pension funds and other investors will be advised to withdraw any investment in the company and deny access to future sources of credit.
The letter says “The Principles address five specific categories of reform in terms of procedures, coordination, management, safety and technology. These Principles are created in an effort to work proactively with the gun industry to seek commonsense solutions in response to the proliferation of gun violence in America that has caused immeasurable harm to our citizens. In these Principles, the gun industry is being called upon to be part of the solution to the public safety and public health challenges we face in cities and towns across the nation and presents an opportunity for significant progress towards the imperative objectives of keeping firearms out of the wrong hands, and making guns and ammunition safer for authorized users.”
The Principles apply to gun and ammunition manufacturers, distributors and retailers, with an exception for the production and sale of guns or ammunition to local, state and federal law enforcement agencies and all US military forces for use in conducting their official duties.
“Local and state governments, colleges and universities, hedge funds, pension funds, venture capital funds and all other organizations that have a financial relationship with private corporations may request that companies affiliated with the gun industry review and adopt the Sandy Hook Principles. In the event an affiliated company does not adopt the Principles, organizations may choose to reexamine that financial relationship.
In the sample letter, gun-related companies are asked to affirm that they will:
“• Support and promote restrictions on firearm and ammunition sales, transfers and possession to keep guns out of the hands of children (unless authorized), persons with mental illness or mental health challenges (unless authorized), criminals, domestic or international terrorists and anyone else prohibited from possessing them under federal law.
“• Conduct background checks on all gun and ammunition sales or transfers and support the establishment of a federal universal background check system for every such transaction.
“_ Reevaluate policies regarding the sale, production, design or conversion of military style assault weapons for use by civilians, including the distribution of any materials/information that may be used to assist in such conversion.
“• Ensure that all business clients, including gun show operators or gun dealers, conduct background checks for every sale or transfer of guns or ammunition.
“• Make a commitment to develop, share and implement technology-enhanced safety measures for guns and ammunition.
“• Support and promote the creation of a federal gun trafficking statute to ensure strict punishment for individuals engaging in the trade of selling firearms to anyone prohibited from possessing them under federal law.
“• Support and promote sharing of background check and gun sale data for law enforcement purposes.
“• Support and promote gun safety education at the point of sale and in the communities in which we conduct business operations. We will be transparent in our implementation of these principles and provide information which demonstrates publicly our commitment to them.”
The MSCI letter spells out the consequences of a gun-or ammunition related company that fails to adopt the principles.
“If your company is a Covered Company and declines to sign and abide by the Principles, then your company will be placed on a Non-Compliant Companies List. The Board will be prohibited from investing in your company and will commence a process of divesting itself of all current investments in your company. Your company will remain ineligible for investment by the Board unless and until your company signs the Principles.”
The Sandy Hook Principles were modeled after the Sullivan Principles, originally developed in 1977 by the Reverend Dr. Leon H. Sullivan of Philadelphia’s Opportunities Industrialization Centers (OIC) of America, in order to promote desegregation and equal rights during the apartheid regime in South Africa. Sullivan was a member of the General Motors board of directors at the time and focused on GM, which then was the largest single employer of blacks in South Africa. After the disinvestment campaign helped to end apartheid in South Africa, Sullivan and then-UN Secretary General Kofi Annan launched a similar program called the Global Sullivan Principles as a human rights and equal opportunity code of conduct for companies all around the world. They have been applied in similar disinvestment campaigns in India, Greece and elsewhere to shape specific public policy initiatives by withdrawing or withholding investments.
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