County Again Urges End to Local Tobacco Stock Investments

Hoping to raise the stakes in the contentious tobacco stocks controversy, the Board of Supervisors agreed Tuesday to send a letter to the county’s retirement board urging it again to consider pulling out of such investments.

“There’s no question in anyone’s mind that [tobacco] kills people,” Supervisor Kathy Long said. “To go into a nationwide lawsuit [against tobacco] and then turn around and invest [in it] is disingenuous.”

Last month the retirement board on a 6-2 vote defeated a motion by Supervisor Frank Schillo to divest from tobacco stocks. The majority reasoned that such a decision could lead to a slippery slope of divestiture from all kinds of politically sensitive industries.

After a debate marked by noticeably strong support from Schillo, who proposed the letter, Long and Susan Lacey, county supervisors voted 4 to 1 to put additional pressure on the retirement board to reverse its decision.

Supervisor John Flynn dissented, arguing that, although he found it difficult to disagree, to make a recommendation to the board would be bad policy.

“It’s hard for me to oppose what you’re doing,” Flynn said. “We can’t draw the bottom line. We have to let the [fiscal] managers do the managing.”

Lacey responded.

“The bottom line is . . . I don’t want my money supporting tobacco companies,” she said.

Although Supervisor Judy Mikels voted to write the letter, she did so with reservations on the potential precedent of withdrawing investment from a particular type of stock. But she said the decision could make good economic sense, since tobacco companies are suffering from a series of high-profile legal losses and, she said, could be primed for bankruptcy.

Mikels called on the retirement board to consider polling the organization’s membership to gauge its concerns on the issue.

The board has so far received only one complaint concerning its tobacco investment and two phone calls supporting its decision last month, said Tim Thonis, assistant retirement board manager.

He said it would be extremely difficult for the board to poll the membership, which numbers more than 11,000 throughout the 50 states and abroad.

“I don’t know that we could get a large enough sample to make any inferences,” he said. “But if it’s in their letter, we’ll consider it.”

Thonis said his sense is that the board would be very unlikely to reverse its vote. In August, retirement trustees said it wasn’t their place to pick and choose stocks and worried that doing so might start a precedent they were not prepared to establish.

Thonis further cited San Diego County, where supervisors also called on their retirement board to divest, and were rebuffed.

“There are certain times the government needs to step in,” he said. “But, personally I like to let the market, the invisible hand, drive.”

The retirement board has historically been reluctant to put restrictions on how any of its money is invested. In the early 1990s, the board came under fire for keeping South African stocks even as the state boycotted those investments.

Four of the nine voting members are appointed by supervisors, one is the county treasurer, and the others are elected by the organization’s membership.