The Norman Transcript
NORMAN — While Washington as well as state legislatures contemplate policy responses to the horrific tragedy that left dozens dead in Newtown, Conn., others weren’t waiting. Some major investment houses and pension funds began to speak with their pocketbooks.
Cerebus Capital Management, a private investment firm, announced plans to sell Bushmaster company, the maker of the rifle used in the Newtown shootings. The investment house called the Newtown massacre a “watershed event” that would presumably create new laws restricting those type of guns and change the value of the company.
While the Cerebus decision may indeed not have been an altruistic action but more a financial one, clearly, public sentiment influenced its decision. In announcing the sale, Cerebus said the shooting “raised the national debate on gun control to an unprecedented level.”
We’re thinking that unprecedented level of discussion will go on for some time.
Cerebus invests money for large pension funds and has as one of those investments a company called Freedom Group, the largest firearms maker in the U.S. One of its investors is the California State Teachers Retirement System. The pension fund was reviewing their $600 million investment in Cerebus in response to the shooting, according to a spokesman. The fund would own, through Cerebus, 2.4 percent of Freedom Group.
Cerebus also appeared to be motivated by significant movement in public sentiment for stricter gun laws, ones that would likely outlaw the guns made by the companies that have Cerebus backing. A Freedom Group spokesperson admitted as much saying reinstating the assault weapons ban allowed to expire in 2004 would “have a material adverse effect on our business.”
Even some sporting goods stores are voluntarily taking their assault weapons off the shelves for fear of public and consumer backlash.
Cerebus for its part tried to stay above the political questions, stating: “It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators.”
Whether Cerebus likes it or not, it is influencing the debate.
The power of this kind of corporate democracy may be something investors, teachers, public employees consumers and others might consider adopting, especially since it may likely work toward public policies the people want faster than Washington.
— The Free Press, Mankato, Minn.
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