|Another Kind of Bottom Line|
Now a shocked news media is rushing to unveil the long hidden shadow behind the long string of massacres by homegrown gunmen armed with military assault weapons aimed at fellow citizens.
“Pension giant California State Teachers' Retirement System, or Calstrs, is reviewing a $500 million investment commitment to Cerberus Capital Management LP because of the private-equity firm's ownership of the maker of a weapon used in Friday's school shooting in Newtown, Conn,” the Wall Street Journal reported Tuesday morning.
The New York Times reported more details in a business column: “It is often overlooked, but some of the biggest gun makers in the nation are owned by private equity funds run by Wall Street titans. The .223 Bushmaster semiautomatic rifle that was used on Friday by Adam Lanza to massacre 20 schoolchildren was manufactured by the Freedom Group, a gun behemoth controlled by Cerberus Capital Management, named after the three-headed dog of Greek myth that guarded the gates of Hades. Its founder, Stephen A. Feinberg, hunts regularly on the weekends with a Remington Model 700.”
Within hours of these news reports, Cerberus Capital Management, based in New York City, announced that it is selling its stake in the company that makes Bushmaster rifles. But news reporters across the nation were now on the trail like baying hounds hot on the heels of the usually wily foxes of Wall Street. Bloomberg News tracked down Feinberg’s father at his retirement home in, of all places, Newtown, Connecticut and asked for a comment on the shooting rampage that tore up the heart of a community school, an outrage committed by a local boy with the loaded Bushmaster belonging to his mother, who was also killed reportedly by one of her collection of semi-automatic guns.
Then the business news company owned by New York City Mayor Michael Bloomberg dropped the boom on the cozy relationship between assault weapons-makers and public pension funds.
“The New York State Common Retirement Fund, which manages $150 billion, is also reviewing its investments in gunmakers, according to Eric Sumberg, a spokesman for State Comptroller Thomas DiNapoli,” Bloomberg News reported. “As investors, we support Cerberus Capital Management for taking action today to sell its stake in the Freedom Group,” Sumberg said today in an e-mail.
“New York City pension funds are reconsidering about $18 million in the stocks of Smith & Wesson, Sturm Ruger and two other companies whose businesses include gun manufacturing. ‘We are currently conducting a review of our holdings and aggressively exploring all options, including divestment,’ Matthew Sweeney, a spokesman for Comptroller John C. Liu, said in an e-mailed statement.”
Until Friday, the gun manufacturing parent company had a good year, Reuters reported: “Cerberus bought firearms maker Bushmaster in 2006 and later merged it with other gun companies to create Freedom Group, which reported net sales of $677 million for the nine months ended September, up from $565 million the same time a year ago.”
Other reporters tracked down the financial link between the gun manufacturer and the California teachers pension fund, which quickly announced it was reviewing its massive investment in the Cerberus hedge fund.
“The California teachers' retirement fund is also ‘reviewing’ its multimillion-dollar investments in two publicly traded firearms manufacturers, Smith & Wesson, and Sturm, Ruger, another fund spokesman, Ricardo Duran, told The Huffington Post.
“Smith & Wesson manufactured the assault weapon used by James Holmes during the Aurora, Colo., rampage that killed 12 and injured 58. Sturm, Ruger made the assault weapon used by Anders Breivik during the killing spree that left 77 people, mostly teenagers, dead in Norway in July 2011.
“California's teacher retirement system owns hundreds of thousands of shares in the two publicly traded gun corporations according to the system's equities documents, for a total worth of approximately $6 million…
“As sales of traditional hunting rifles and shotguns have declined in recent decades, sales of military-style assault weapons to civilians have become a major profit-driver for gun companies,” The Huffington Post noted, “making any new gun control regulations a major financial threat for the entire industry, analysts said.”