Challenging the Retirement
                     Board to Divest

As a part of the San Francisco Tobacco Free Coalition's divestment strategy, a few members of the Coalition: Karen Licavoli, Kirk Kleindschmidt, Lisa Manning, Elizabeth Tan, and two youth from SLUG, met with Supervisor Michael Yaki, a member of the San Francisco Retirement Board on Thursday, November 6th. The Coalition members outlined their six points of concern:

1)  the Retirement Board should not invest in a company that sells products which cause serious health problems that can lead to death;

2)  there appears to be a conflict of interest because the Retirement Board is investing in tobacco stocks while the city of San Francisco is receiving a settlement in a lawsuit against a tobacco company;

3)  the states of Florida and Massachusetts have set precedence in the matter, recently divesting from tobacco stocks;

4)  San Francisco is firmly anti-tobacco in its policies (note the ban on self-service displays of cigarettes and the restrictions on tobacco advertising);

5)  using the system of voting by proxy to influence the tobacco companies is not working; and

6) there are other profitable options.

After listening to the list, Yaki said that, "as an asthma sufferer," he very much wanted to see our cause through, but the Retirement Board is part of a State and Federal Trust Fund which deliberately insulates it from public opinion. None of the Retirement Board's brokers directly trade in tobacco stocks. Instead, their monies are held in indexes which happen to have tobacco stocks in them. In terms of the U.S. Equity Index Fund, according to Yaki, it's hard to find an index without tobacco stocks. Yaki explained that Retirement Board members hold fiduciary duty which is the highest legal duty that can be imposed upon anyone. In comparison, he said, fiduciary duty is like parental duty: above anything else your duty as a parent is to protect, and Retirement Board members are strictly bound to make decisions in the best interest of the pension fund. He said that often retirees attended the meetings and sat quietly unless they felt that Retirement Board members were making decisions that would compromise the pension fund's earnings. According to Yaki, a retiree once stood up at a Retirement Board meeting and said, "Your job is not to help the city. Your job is to help me!"

Karen Licavoli was undaunted by the information. She reminded other Coalition members that in order to change the Retirement Board's policy, a minimum of 4 out of 6 votes are needed. She recommended that we go forward and put a greater emphasis on #6 which presents the Board with other profitable options. Recommending Karen's suggestion, Yaki said that he would put in a word to the Retirement Board that tobacco stocks will become a poor investment due to the tide changing against tobacco.

Supervisor Yaki also mentioned that the Coalition should consider the different products tobacco companies produce and look into procurement as a way to affect the Tobacco Industry. "Because," he said, "cookies that don't get sold go stale, but stocks don't." Karen answered that the Coalition had already taken that approach with the San Francisco Unified School District.

Because Supervisor Yaki is unable to attend the next Retirement Board meeting, the Coalition has postponed its plan to appear on the agenda until January. But until then, Yaki promised to discuss the Coalition's points with the mayor and the city attorney.

Following the meeting with Supervisor Yaki, Karen contacted Ross Hammond, a member of the Coalition, who researched Yaki's points. Ross shared his research at the Coalition Divestment Committee meeting on November 18th. The Coalition members were relieved to learn that Yaki's word was not the last on Retirement Board divestment. Ross learned that the brokers who purchase for the Retirement Board attempt to replicate the S&P 500 returns by trading stocks in the same proportion as the S&P. Therefore they are not held to any particular stocks and could replicate the S&P minus tobacco stocks. As far as fiduciary duty is concerned, diverting from the S&P 500 would not necessarily jeopardize the fund's returns considering that tobacco stocks are a small percentage of the whole. With further research, brokers could identify other stocks that have returns similar to those of tobacco.

This is the last newsletter of an exciting year for Tobacco Control. The year began with new San Francisco laws (PC308B) allowing police to cite youth for possessing tobacco, and the ban on self service displays of cigarettes. '98 will begin with a ban on smoking in bars (AB 13), and hopefully by March we will see a ban on all publicly visible tobacco advertising.

Keep reading us (and working with us) in the new year for a close-up view of Tobacco Control.

We pay $15.00 for any photographs, articles, or letters that we publish, so please send 'em in!

Sincerely,
Lisa Manning,
Project Coordinator

Front Groups

Front groups are created to supposedly protect the rights of smokers. They give the appearance that there are many grass-roots members who oppose tobacco control policy, but one Front Group was started with money from a Philip Morris public relations firm. (Peter Stone, "It's All Done with Smoke and Some PR," National Journal, May 28, 1994, p.1244.)

Green Leaf Fever or Green Tobacco Sickness

Green Leaf Fever is a form of nicotine poisoning which has been known to strike farm workers while they are harvesting tobacco. Remember that children work in the tobacco fields. ("Tobacco Field Workers Experience Nicotine Poisoning," Corporate Crime Reporter, 2/14/94.)

If You've Got Some Tobacco Lingo You Want to Share Send It In.

   We Act Locally, But We Think
                             Globally

by Lisa Manning

A couple of weeks ago Carol found a very tragic story on the GlobaLlink Tobacco Network. She asked me to share it with you. Here at SFAATFP, we have noticed that while month after month we see triumphs in San Francisco in the area of tobacco control, we are constantly watching setbacks around the world.

Poland has been identified by the Tobacco Industry as fertile ground for promotions and marketing. The Tobacco Industry snatches up young people, with promises of company cars and paid hotel rooms, to do its dirty sales and promotions work. The Industry's latest idea was to give away special matches (the kind from old Hollywood movies) that light when you strike them on the side of your jeans. Because the matches are highly flammable, no one in the U.S. would produce them, but Philip Morris simply found a Polish company to produce the matches.

One night in June, three young Polish representatives of Philip Morris (ages 19, 24, and 25) were driving a spiffy new car with the word Marlboro painted on its sides. They were headed to a dance club or some other spot PM had identified as great for marketing to young folks, when their car was forced off the side of the road. The car hit a tree, and the trick matches caused the car to burst into flames. 24 year old Beata old and 25 year old Adam were killed in the accident. 19 year old Katarzyna spent two months recovering in the hospital.

Aside from the gross disregard for its employees and the young people of Poland targeted by the promotion, it turns out that Philip Morris was breaking transport laws by shipping the matches without adequate safety packaging. The company which courted the young folks so fervently when they were needed to push its products, didn't say a word to the families of the young employees after the accident. Finally the families went to them. What recourse do these families have? Most sovereign nations don't have a chance in a suit against Big Tobacco, so we don't expect these Polish families to have much luck.

   'Smoking Out' the Smoke Shops

The SFAATFP is soon to join the Columbia Park Boys & Girls Club in its work with San Francisco Smoke Shops. The project began when James Littlejohn of Columbia Park noticed that smoke shops which often sold drug paraphernalia, were popping up frequently in the Mission. Although the city of San Francisco has fewer children than others, the Mission is the part of the city that is most heavily populated with children.

Their first step in assessing the situation was to catalog and map the smoke shops in San Francisco. Unfortunately, the list grows longer everyday. As the Smoke Free Cougars of Columbia Park and their coordinator, Michael Jones, identify smoke shops, they also note if the shop is near a school or other youth oriented space, the amount of exterior advertising, and the type of items sold in the store. They are finding that smoke shops in the Mission tend to sell drug paraphernalia and knives, whereas the shops in certain other areas of the city such as the Marina, tend to strictly sell tobacco products and tobacco paraphernalia.

The San Francisco African American Tobacco Free Project will pick up the baton on smoke shops in January. By then, Columbia Park will have enough information to help SFAATFP write a survey that addresses pertinent points for youth purchase attempts. The SF Tobacco Free Project has obtained immunity for youth to both enter smoke shops (which is illegal for anyone under 18) and to purchase cigarettes. The groups are hoping to gather more data on the shops in the purchase phase of the project so that they can better assess the different types of smoke shops and how they correspond to city demographics.

SF African American Tobacco Free Project
Carol McGruder, Project Director
185 Berry Street, Suite #4300
San Francisco, CA 94107
Phone: (415) 777-3229
FAX: (415) 512-9625
e-mail: tobacco@polarisinc.com