For the past couple years, SEIU has led the fight for greater transparency and improved governance at private equity firms. Now the union is taking the fight directly to key funders of PE firms – large state pension funds on the west coast.
Earlier this year, SEIU backed a bill in California that would have challenged investments by CalPERS, CalSTRS and other state funds in private-equity firms funded by so-called “sovereign wealth funds” (these are the same funds that are now the largest shareholders of Wall Street firms like Merrill Lynch, Citigroup and Morgan Stanley). The bill never made it through the state assembly house over concerns that it would violate the fiduciary duty of these funds to “maximize value” for its members.
Since then, SEIU has taken the fight up north to Washington by attempting to get language passed that would force the state’s largest pension fund – the Washington State Investment Board (WSIB) – to screen investments by private-equity firms for problematic labor and environmental practices.
At this point in the initiative, it is still unclear as to whether the union will seek a legislative sponsor like it did in California or opt to run a ballot measure that will be put up for public vote. WSIB officials have indicated that they will fight the proposed requirement.
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