At a time when banks have frozen investment and municipalities have frozen borrowing, the fight for freedom within labor has taken on a new sense of urgency due to the disparity in pension fund investment policies.
The retirement set-asides for unionized public employees and construction workers go into funds that their unions and their employers jointly control. In June 2011, AFL-CIO President Richard Trumka announced that his organization’s funds would invest $10 billion over the next five years in infrastructure projects, creating jobs in the very trades African Americans have been locked out of. By October 2011 the federation’s construction-worker division had put $200 million of pension money into retrofitting buildings.
It has been reported that over the past 18 months, the building trades pensions have invested over $150 million in St. Louis projects such as Park Place and the Laurel downtown. I wonder what minority participation looked like on those projects?
The AFL-CIO Housing Investment Trust Fund over the past 25 years has generated approximately 50,500 union jobs with $6.6 billion in pension fund investments. A real estate fund backed by AFL-CIO pension funds has just acquired three northern Virginia data centers. I wonder how many African American-owned companies have benefited from the NEBF, a multi-billion dollar pension plan that provides retirement benefits to employees in the electrical industry, which invested $100 million in the data center venture?
Big public-employee pensions had about $220 billion invested in private equity in September of last year, roughly 11 percent of their assets, according to Wilshire Trust Universe Comparison Service, which tracks the holdings of pensions, foundations and endowments. Large public pension plans are pouring more money into private-equity funds, an industry that is less diverse than any I know of and responsible for significant job losses.
The Service Employees International Union and the National Education Association both decided to commit a share of their retirement funds to projects that shored up the nation’s infrastructure. The Clinton Global Initiative (CGI) assisted them setting up meetings between the union leaders and supportive state treasurers…I wonder if any African Americans were in the meeting?
The public sector unions who claim Wall Street are to blame for our economic challenges are actually collection agents for Wall Street, at the same time as they are a corrupting influence on Wall Street. Evidence of a raid on the pension funds has been growing since President Clinton promised during his 1992 campaign to create a $20 billion “Rebuild America Fund” for federal investment in infrastructure leveraged with private and public pension funds.
In May officials from state and local pension funds from around the country gather in New York to hear about alternative investments, including infrastructure and small companies in developing countries. The National Conference on Public Employee Retirement Systems hosted a panel on investing in infrastructure, and no one in the room asked the critical questions for African Americans: will the investments require diversity in expenditures on the various projects? Will the investments overseas include Sub-Saharan Africa?
Unions are among America’s major investors and some even invest in other countries; it would be interesting to know how much and where. Federal authorities in Kansas City have launched an investigation into the International Brotherhood of Boilermakers’ pension and benefit plans. The complaints included allegations that family members of some trustees received bonuses from companies that managed investments for the three funds, which total more than $9 billion.
The three employee benefit plans are the Boilermakers National Health and Welfare Fund; the Boilermaker-Blacksmith National Pension Trust; and the Boilermakers National Annuity Trust. All operate out of the same office and are administered by trustees, some appointed by the Boilermakers and some by employers who do business with the union.
It would be interesting to know how diverse the boards that control these pension funds are, and what is the diversity policies associated with investment decisions. When it comes to public employee pension funds, it’s important to note that in 2011 nearly 20 percent of employed blacks worked for state, local or federal government, compared to 14.2 percent of whites and 10.4 percent of Hispanics.
At the end of the day, it does not matter if it’s the AFL-CIO, Teamsters or SEIU the question remains the same; what happened to the fight for freedom in labor?
Adolphus Pruitt is president of the St. Louis cit NAACP.Â