Board Fires Advisor for Remarks on Armenians, Greeks

Under heavy political pressure, officials of California’s mammoth public employee pension fund voted Monday to rescind approval to hire an investment consultant whose comments about the slaughter of Armenians and Greeks under Ottoman Turkish rule were seen as insensitive and inaccurate.

Board members of the California Public Employees’ Retirement System also voted unanimously that consultants hired to assess its foreign investments will be required to “put a premium on historical truth.”

Both moves, made at the board’s meeting, came in response to anger expressed by two dozen state legislators and leaders of the state’s Armenian and Greek communities.

The controversy arose after the board moved in June to hire an advisor who, in a paper analyzing investment opportunities in Turkey, wrote that before World War I “the very large Greek minority fled to Greece. The Armenian minority was dealt with in a different way.”

The reference, by consultant Marvin Zonis, a professor at the University of Chicago business school, offended state Treasurer Phil Angelides, a Greek American and member of the pension fund board.

Angelides, who sponsored the motion demanding “historical truth,” felt the comment trivialized the horror of Turkey’s ethnic purges from 1915 to 1922. His family fled Turkey when the Turkish army began burning villages populated by Greeks.

Historians agree that hundreds of thousands of Greeks were killed and up to 1.5 million Armenians were slaughtered as the Turks attempted what in modern times has been called “ethnic cleansing.”

The controversy increased in October when Charles Valdes, board vice president and chairman of its investment committee, dismissed Angelides’ concerns, saying, “What we have here is a Greek treasurer who doesn’t like Turkey, who doesn’t like Turks.”

On Monday, Valdes, an attorney for Caltrans elected to the pension fund board by its members, restated an earlier apology to Angelides. “My comments were intemperate. I can only tell you that my apology is sincere and heartfelt,” he said.

Assemblyman Louis Papan (D-Millbrae), a Greek American, scolded Valdes’ fellow board members for not having rebuked him. Papan said he plans to have the Legislature explore ways to exercise some control over the retirement system board, which manages a $155-billion pension fund.

Zonis submitted a letter saying that his comments in his six-page analysis of Turkey as an investment opportunity do not reflect his views on the Turks’ treatment of Greeks and Armenians.

Zonis said he has long criticized the Turks’ refusal to acknowledge the Armenian genocide and the mass murder of Greeks. And Zonis said he was told by the Turkish government not to attend an economic conference there after he wrote a book review blasting the Turks for their oppression of Kurds.

“I have been a savage critic of Turkey for a long time,” Zonis said in a telephone interview. “I am totally amazed at how anyone could think I’m somehow tilting toward Turkey.”

The retirement system has $90 million invested in Turkey, out of $36 billion invested abroad.

Greek and Armenian leaders said Zonis’ comments were insulting because they seemed to display a dismissive attitude that has contributed to the slaughter being a forgotten chapter in history.

The Zonis report “is a cancer, and you have to cut it out,” said Walter Karabian, a Los Angeles lawyer and former state legislator. “Casting aside the consultant and starting over in the only course open to you.”