TIAA-CREF, the nation's largest pension system and self-proclaimed leader in corporate social responsibility, has come under fire from a coalition of academics and activists who are questioning TIAA-CREF's commitment on a range of social responsibility issues.

"TIAA-CREF's tagline is 'financial services for the greater good,' but it seems like the only good they are concerned about is the bottom line," said James Keady, Director of Educating for Justice and long-time active member of the coalition that is attempting to hold TIAA-CREF publicly accountable on these issues.

Coalition reps will be at the upcoming CREF annual meeting on Tuesday, July 20, 9:30 AM, at TIAA-CREF's NYC headquarters and they plan to publicly pressure the group to stop outsourcing jobs overseas; to stop firing whistle-blowers; to stop investing in sweatshops; and to stop paying its CEO 10 million dollars a year.

"After years of member lobbying, TIAA-CREF finally agreed to talk to some of the companies we have focused on," said Keady. "Unfortunately, TIAA-CREF’s method of 'quiet diplomacy' over the past five years has not led to any substantive changes."

The coalition believes that TIAA-CREF can and should do more. Its Policy Statement on Corporate Governance reads, "While quiet diplomacy remains our core strategy"¦the TIAA-CREF engagement program involves many different activities and initiatives, including engaging in public dialogue and commentary... engaging in collective action with other investors... seeking regulatory or legislative relief"¦ commencing or supporting litigation. ... It is time for TIAA-CREF to get aggressive with these companies."

Background Facts

Outsourcing

TIAA-CREF has recently outsourced many job functions that were previously performed by TIAA-CREF employees in Denver, Charlotte, and New York. Quality Assurance is now performed by Cognizant Technology Solution Employees in Mumbai, India and this has resulted in the elimination of several hundred jobs of staffers from the United States.

Previously, this outsourcing was under the radar. But recently, TIAA-CREF announced publically that it is outsourcing seventy or so jobs in its large Denver office. It says the reason is fiduciary responsibility (though by that logic, TIAA-CREF should start hiring people at minimum wage and increase investment in high-profit sweatshops). Particularly appalling is that TIAA-CREF's CEO Roger Ferguson is on Obama's Economic Recovery Advisory Board. Is sending jobs overseas a way to promote economic recovery--while the U.S. unemployment rate hovers near 10 percent.

Whistle-Blowing

TIAA-CREF employee and whistle-blower Chris O'Keefe turned in a subordinate who had stolen customer information. It turned out that the thief was a known felon and TIAA-CREF had failed to run a sufficient background check. O'Keefe was fired.

CEO Compensation

TIAA-CREF CEO Roger Ferguson makes in the range of 10 million dollars in annual compensation. This is far too high for the head of a non-profit organization whose base of investors are academics and non-profit employees earning far less. It is especially out of line given TIAA-CREF's long-standing shareholder activism regarding CEO salaries.

Sweatshops and Labor Rights

TIAA-CREF invests in some of the worst corporate actors: Coca-Cola, Nike, Walmart, and Costco in Mexico. The 1.4 million-strong American Federation of Teachers passed two resolutions critical of TIAA-CREF's investment in the first three of these companies and demanded that it hold these companies accountable on human rights and labor issues.

Recently, under pressure from Investors Against Genocide and a looming resolution on the 2010 CREF annual meeting ballot, TIAA-CREF changed a long-standing policy and divested from certain companies in Sudan because they did not take meaningful steps to respect human rights. TIAA-CREF should extend that get-tough policy to other important labor and human rights abusers like Coca-Cola, Nike, Walmart, and Costco in Mexico. It is time to reform these four companies for the reasons below-which go beyond human rights--or divest from them:

Coca-Cola

"Coca-Cola and its bottlers operate like a criminal syndicate with impunity and by repeatedly lying, Coke's executives are hiding from large investors, like TIAA-CREF, potential liabilities that could cost the company billions of dollars," said Ray Rogers, Campaign to Stop Killer Coke Director. Charges of human rights abuses and lawsuits against Coca-Cola continue to proliferate in China, Colombia, El Salvador, Guatemala, Mexico and Pakistan. These abuses include the systematic intimidation, torture and murder of union leaders and family members in efforts to crush unions in Colombia and Guatemala. In Mexico, Coca-Cola faces allegations of cheating Mexican workers and the Mexican government out of hundreds of millions of dollars. Coke workers in Pakistan attempting to form a union have met with death threats, abduction, firings, and extortion. In India and Paw Paw, Michigan, Coke faces multi-million dollar fines for contaminating and depleting water resources.

Nike

Over the course of the past 5 months, two major institutions, the University of Wisconsin-Madison and Cornell University, have cut ties with Nike over their refusal to deal with a corporate responsibility matter. At issue is the $2.6 million dollars of back wages and severance owed to 1,700 Honduran factory workers who produced Nike products for the college bookstore market. UW's University Chancellor, Biddy Martin commented, "Nike has not developed, and does not intend to develop, meaningful ways of addressing the plight of displaced workers and their families in Honduras. It has not presented clear long-range plans to prevent or respond to similar problems in the future. For this combination of reasons, we have decided to end our relationship for now."

Nike has also just been hit with another round of allegations about worker rights violations and environmental abuse. Jim Keady of TEAM SWEAT (www.teamsweat.org), an international coalition of workers, consumers, athletes and investors, who are pressuring Nike to improve factory conditions, recently returned from an 11-day research trip to Indonesia. "I found piles of Nike scrap shoe rubber being burned in a village, workers sharing that they were coached to lie to monitors about factory conditions, and the ongoing problem of Nike paying poverty wages to the women and men that produce the real wealth for Nike," said Keady.

Walmart

Walmart continues to exploit its workforce, build its profits on sweatshop labor, and damage local communities by constructing huge stores, and then abandoning hundreds of them. "To the extent that TIAA-CREF is one of the largest institutional investors in Walmart stock, they are complicit in the socially irresponsible behavior of the world's largest retailer," said Al Norman, founder of Sprawl-Busters. "TIAA-CREF has lost touch with its higher education investors by continuing to invest heavily in Walmart."

Costco

The High Commission on Human Rights of the United Nations, Amnesty International, and other organizations have agreed that in 2002, Costco, working with governor Sergio Estrada Cajigal (who is associated with drug lords), was responsible for the violation of collective human rights by violently repressing activists and destroying important natural areas and a 3,000-year-old archeological site in Cuernavaca, Mexico. Costco should place its warehouses elsewhere and make a serious effort to restore the world cultural site that was severely damaged. TIAA-CREF is an accomplice to this damaging and corrupt behavior by neither engaging Costco nor divesting its Costco holdings.

"Make TIAA-CREF Ethical" coalition includes: *Sprawl-Busters; Press for Change; Campaign to Stop Killer Coke/Corporate Campaign, Inc.; Campaign for a Commercial-Free Childhood; Social Choice for Social Change; Citizens Coalition (Frente Civico); Team Sweat/Educating for Justice; National Community Reinvestment Coalition; United Students Against Sweatshops; Canadian Committee To Combat Crimes Against Humanity (CCCCH); Corporate Accountability International; World Bank Bonds Boycott

Background on the "Make TIAA-CREF Ethical" campaign can be found at www.makeTIAA-CREFethical.com.

Make TIAA-CREF Ethical Coalition

Make TIAA-CREF Ethical Coalition

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