Fossil Fuel divest

Chicago Teachers Union Delegates Vote to Divest from Fossil Fuels

By Jim Vail

Phil Weiss Members First CTPF Trustee &
Investment Chair

The Chicago Teachers Union delegates voted overwhelmingly in support of encouraging the Chicago Teachers Pension Fund to divest from fossil fuels.

The delegates voted 86% in favor and 14% against the resolution that will "implore" the trustees of the Chicago Teachers Pension Fund to ask an independent consultant to review the fund's investments in the fossil fuels industry which includes oil, gas and coal that scientists say are destroying the planet.

The resolution further stated that once the review is complete they would like the Fund to disinvest from fossil fuel funds and support investments that enable governments to convert to renewable energy.

The Teachers Pension Fund invests about $242 million in the fossil fuel industry, or about 1.6 percent of its total portfolio in a $12 billion fund. But union officials said this resolution will send a strong message to the country to act likewise.

A pension researcher told participants at a recent CTU Chicago Teachers Pension Fund forum that public pensions are heavy investors in the fossil fuels industry.

One delegate who spoke against the resolution said this could be a slippery slope if the CTU tells the pension board how to invest its money in a fund that is on shaky ground due to its low funding ratio. "I have a problem telling investors how to invest our money."

Jackson Potter, a CTU delegate, trustee and founder of Core who teaches at Back of the Yards High School, said the union has a vital interest in the environment, citing the environmental problems on the South Side where children have chronic illnesses such as asthma due to fossil fuel industries polluting their environment. "How can we justify investing in an industry that is killing us?"

The resolution was worded in a way that will not force the pension fund to divest from the fossil fuel industry, but rather encourage "possible divestiture from these companies."

The November election for new trustees - two teacher trustees and three retired teacher trustees - is important when it comes to following up on this resolution.

Almost all the trustees on the fund ran on the Core ticket and they have taken an active role in wedding social justice issues to investments. They led the campaign to defund the CTPF from the private prison and gun manufacturer industries. They also became the first pension fund in the country to eliminate investing with hedge funds who are notorious for charging high fees.

However, another teacher caucus may challenge this strategy in the next election. Members First Phil Weiss was elected to the Chicago Teachers Pension Fund last fall. Some believe Weiss was elected due to his strong financial background that mirrored Core winner Tina Padilla who holds an MBA in finance.

"I know CORE hates the Private Equity Firm KKR," Weiss wrote on facebook. "FYI-162% gain shared $500 million with their hourly workers! As far as I am concerned we are going to continue to Responsibly Grow our Retirement Wealth!"

Weiss was upset he was not invited to speak to the CTU forum on the CTPF which asked why public pension funds invest in the fossil fuel industry. He then stated that he disagreed with statements at the forum that were critical of KKR, a private equity firm known for buyouts of large companies that result in massive layoffs. 

The speakers at the union pension fund forum included an AFT pension fund researcher, Pension Trustee Jaqueline Price-Ward and former CTPF President Jay Rehak, both with CORE. None of the five Members First candidates who are running in the November election were present. One MF candidate told Second City Teachers they were not invited to the event. 

The CTPF lobbyist told trustees at the last pension board meeting that there has been no discussion about divesting in the fossil fuel industry in the Illinois House of Representatives. She said there are still a number of coal mines open in southern Illinois. However, the coal companies have been replacing their union labor with contractors who are working in more unsafe conditions with less regulatory oversight due to the lack of union protection.

"Thank you for giving me the opportunity to serve as a CTPF trustee and Chair of Investments," Phil Weiss stated on facebook over an article entitled, "Teachers Pension Funds Sees Record Return." The CTPF earned a whopping 28 percent return on investments last year.

While it appeared Weiss was taking credit for the record returns, the fact is the return was generated last year under both Phil Weiss and Tina Padilla, who served as the Investments Chair until they both won in last year's October teacher trustee election. Pension Board President Jeffery Blackwell, who censured Padilla and two other trustees for alleged unprofessional behavior, then removed Padilla as the chair of investments and replaced her with Weiss. Weiss in turn made the motion to censure Padilla and the others.

In another measure at the House of Delegates meeting on Wednesday, the delegates voted almost unanimously to change the wording from pension holiday to pension default. The pension holiday was first proposed by Mayor Richard Daley when he took the teachers pension money that was 100 percent funded to borrow for operating costs including funding charter schools that would replace the public school teachers jobs. He promised to return the money when it would fall to 90 percent, but of course never kept his promise. The CTU lobbied to reenact the pension levy so that property taxes would go directly to the fund and could not be diverted by politicians. 

The wording change was meant so that people would not see this as some kind of a vacation, but a serious assault on public pensions by the business class via politicians that they pay to get elected.

The two resolutions on pensions was after almost a year of no reports on the pension fund at the House of Delegates meetings amidst the scandal President Jeffery Blackwell generated when he attacked and censured three female minority trustees and reprimanded a fourth female trustee and voted himself in as an interim director of the fund before they hired a permanent replacement recently.