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Mass., Conn. review pension fund gun holdings

Stephen Singer, AP Business Writer

HARTFORD, Conn. (AP) -- The treasurers of Connecticut and Massachusetts are among officials nationwide who are reviewing public pension investments in response to the fatal shootings of 20 children and six adults in a Connecticut elementary school last week.

Massachusetts Treasurer Steve Grossman has directed the state pension fund to review any investments in gun, ammunition and other companies.

Grossman stopped short of calling for divestment in gun companies. He said it's the duty of the $51 billion fund to maximize investment returns for retirees, but he said the violence in Newtown, where the gunman also killed his mother and himself, should force policymakers at all levels to make changes.

He said Wednesday he was motivated by "the physical, emotional and moral outrage, the collective shudder, the outpouring of emotion and anger and frustration" that immediately followed the killings at Sandy Hook Elementary School.

Connecticut Treasurer Denise Nappier said she's reviewing investments in gun-related businesses including manufacturers and distributors, including indirect investment through the supply chain. She said she joins the nation "in mourning the tragic deaths" and has considered what can be done to avoid another "such senseless tragedy."

"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," she said in a statement. "Ultimately, our interests are best protected when companies are good actors and can sustain our shareholder value over the long haul."

Elected officials and others elsewhere are speaking about a tipping point in fundamental change coming to federal and state gun laws following the Newtown school killings, and treasurers who control hundreds of billions of dollars of pension funds are weighing in.

The California State Teachers' Retirement system, the nation's largest teachers' pension fund, is reviewing whether its investments comply with the fund's social and ethical standards. CalSTRS was found this week to have invested $600 million in private equity group Cerberus Capital Management, which said it will sell its controlling stake in Freedom Group International. Freedom Group makes the weapons believed to have been used in Friday's massacre.

Grossman said: "I reached out to my colleagues that it is essential we review all our holdings of what we own relative to guns, weapons, ammunition, manufacturing and distribution because they will be a strong issue for months to come."

The first step in Massachusetts will be to assemble an inventory of the pension fund's 9,000 companies, he said. Beyond that, his office will look at what gun manufactures make such as automatic weapons or guns used for legitimate purposes such as hunting.

Grossman said he will not tell the legislature what policy to pursue but will use the information to educate the public.

His objective is to force changes such as tighter gun laws, waiting lists that make it harder to buy guns, assault weapon bans and registries that prevent those with mental illness or instability from owning guns.

Ultimately, his goal is to force certain gun manufacturers "to get out of the business, to be a pariah," Grossman said. That "the investment community has made a decision not to do business with you is a pretty powerful statement."

Freedom Group says it's the "premier U.S. provider of firearms, ammunition and related products to a diverse set of global customers and markets." It says it develops, manufactures and markets guns and ammunition of "the highest quality."