Harrigan Says He Does Not Expect Re-Election To CalPERS Board
CalPERS President Sean Harrigan on Tuesday said he does not expect to be elected to another term in an election Wednesday because of CalPERS' recent positions on issues including health care costs, the New York Times reports. The Los Angeles Times on Tuesday reported that the five-member State Personnel Board is expected to vote Wednesday against renewing Harrigan as its trustee to CalPERS.
According to the New York Times, CalPERS, which has $178 billion in assets, "has long sought ways to use its large shareholdings to influence corporate behavior." Harrigan, who was elected as CalPERS president in February 2003, is a career labor union official and vice president of the United Food and Commercial Workers International Union, which earlier this year went on strike at supermarkets in Southern California. After the strike, CalPERS voted its shares against the re-election of several Safeway directors, including Chair Steven Burd.
A group of union presidents and consumer and retiree advocates this week sent a letter to the State Personnel Board urging it to re-elect Harrigan and expressing the belief that he was being opposed by Gov. Arnold Schwarzenegger's (R) administration and various business groups.
"It would be unconscionable if the Schwarzenegger administration and a few narrow corporate interests -- such as the Chamber of Commerce -- who have opposed corporate reform efforts, were to use the [State Personnel Board] as a pawn in their fight against shareholders and fundamental fairness in our nation's financial markets," the letter stated (Williams Walsh, New York Times, 12/1).
Harrigan told the Los Angeles Times that corporate and political interests are "trying to take out one of the most outspoken advocates on behalf of corporate governance in the country." He also noted that Safeway executives were among those leading the effort against him (Dow Jones/AP/San Diego Union-Tribune, 12/1).
According to unnamed labor representatives, State Personnel Board member Maeley Tom (D) is expected to break with the other two Democrats on the board and vote against Harrigan. She is expected to instead support Sacramento real estate executive Ronald Alvarado (R) (Chan, Sacramento Bee, 12/1).
Alvarado, vice president of the personnel board, is expected to succeed Harrigan, according to Rob Feckner, chair of the investment committee of CalPERS (Selway/Marois, Bloomberg/Orange County Register, 12/1).
Harrigan, who was the first new CalPERS president in more than a decade, would remain on the State Personnel Board for five years if he is not re-elected to the CalPERS board (Sacramento Bee, 12/1).
Schwarzenegger spokesperson Vince Sollitto said that the governor has not acted in the CalPERS vote and that the union leaders' letter contains "paranoid musings and conspiracy theories." Sollitto added, "The State Personnel Board representative to the CalPERS board is elected by the five board members. And to date, the governor has made one appointment to the board. You do the math."
The California Chamber of Commerce said in a statement that it is not involved in any movement to remove Harrigan. The statement also said that shareholder activism by CalPERS is "the result of an effort by organized labor to intervene in the corporate boardroom, rather than settle their issues at the bargaining table."
A spokesperson for the California Business Roundtable said the group did not attempt to defeat Harrigan (New York Times, 12/1).
Karen Hanretty, a spokesperson for the California Republican Party, said, "CalPERS, under the direction of Sean Harrigan, ... has been preoccupied with an activist agenda that favors union interests rather than focusing on the bottom line that ultimately benefits the millions of retirees who rely on CalPERS."
Feckner, who would take over as CalPERS interim president if Harrigan is voted off the board, said, "A majority of the board still have right-thinking minds, and we have a dedicated and talented staff that will continue to do their jobs." Feckner, who said he would run for CalPERS president in February if Harrigan is voted out, added that Harrigan is "a great asset to CalPERS' board, a great spokesperson and a great stalwart of corporate governance."
Treasurer Phil Angelides (D), who is also a member of the CalPERS board, said, "This is an attempt by Schwarzenegger and the chamber to slow down the corporate reform movement, by taking out one of its key national leaders" (Dow Jones/San Diego Union-Tribune, 12/1). Angelides added that he hopes "other pension funds see this for what it is, which is a Republican governor standing up for his state chamber of commerce buddies, not for shareholders" (Bloomberg/Orange County Register, 12/1).
Sherry Hicks of the State Personnel Board said the five members would not discuss the issue outside of Wednesday's public meeting (New York Times, 12/1).