Kulongoski opposes
pension investments
By DAN MAIZE
Ot th» Enwrahl
Public employee pension
funds should be invested in the
proposed purchase of Fred
Meyer. Inc., says State Treas
urer Clay Meyers and the
Oregon Investment Council
No they shouldn't, says Sen
Ted Kulongoski, D-Junction Ci
ty
Myers and other members of
the council want to invest $178
million of Oregon Public
Employee Retirement System
funds into a New York invest
ment firm's planned takeover of
the Portland-based retail chain
Kulongoski has several rea
sons for opposing the invest
ment He says the $178 million
investment is too large for one
company and "violates the need
tor diversity "
If the purchase goes through
it will be the largest amount of
PERS money ever invested in
one company, he says The lar
gest amount so far was a $12.5
million investment in a Califor
nia office building
The proposed expenditure
represents "a major change of
investment policy.” Kulongoski
says Only $186 5 million out of
$2 3 billion PERS money now is
invested in private properties
Previous investment councils
and state treasurers have made
few private investments, Kulon
goski says Private investments
usually are considered riskier
investments because they are
not easily converted into cash
and are more dependent on the
economy, he adds
But the investments "are not
riskier than public offerings,”
Myers says
More than 150 private invest
ments have been made by the
state treasury in the last 15
years, says Myers, so the Fred
Meyer investment would be
''consistent” with past prac
tices
Kulongoski says that for
PERS to be a major investor in
Fred Meyer would be a conflict
of interest because the state
regulates and enforces liquor
sales and other retail areas
Kulongoski cites the 1980 ballot
Emerald Photo
Ted Kukmgoski
initiative to take the Oregon
Liquor Control Commission out
of the retail sales business (of
which Fred Meyer was a sup
porter) and asks how the state
would react if PERS was a major
stockholder
Government pension funds
should not be used to subsidize
one retailer over another,
Kulongoski says
“What happens when Fred
Meyer's competitors — Sears,
Penney's, K-Mart, Meier &
Frank, or the corner mom-and
pop grocery — come requesting
public employee retirement dol
lars to expand, merge or just
stay afloat?”
Myers says the conflict of in
terest question is "baseless "
PERS funds are not owned by
the government, but belong to
the members of the retirement
system, Myers says “A Fred
Meyer interest would not favor
or subsidize' one retailer over
another The investment coun
cil does not use trust funds to
help corporations stay afloat "
PERS is a state commission
that controls the distribution of
pension funds for state em
ployees The decisions involv
ing investments are made by the
Oregon Investment Council, a
committee independent of the
state but whose members in
clude Clay Myers and Jim
George, chief investment officer
for the state treasurer
U.S. official escapes
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