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Holtzman: Investing with a Conscience

The track record of New York City Comptroller Elizabeth Holtzman who plans to run for the U.S. Senate this fall, clearly indicates that she does her investing with a social conscience, and with particular concern for the interests both of the Jewish community and of women.

In what she called a “rock solid investment,” Holtzman, a trustee and chief investment advisor for the New York City Employees Retirement System (NYCERS), announced in April 1991 the purchase of $12 million in Federally guaranteed bonds to finance the construction of new housing for Soviet Jewish immigrants in Israel. NYCERS provides pensions to all NYC employees, except for teachers, firefighters, and police officers.

She said, “With this purchase we are participating with the people of Israel in building housing for Soviet Jewish immigrants and making a sound investment on behalf of the participants in the pension fund.”

Holtzman travelled to Israel in July 1991 to build a working relationship with the Israeli government, in order to more effectively fight the Arab boycott. The Israeli government agreed to provide information on American companies suspected of actively participating in the boycott, and Holtzman promised to use that information to conduct further investigations of those companies and to promote direct action against them, if necessary.

Her visit occurred in the aftermath of the case against the Baxter International pharmaceutical company, whose 1988 sale of a plant in Israel suspiciously coincided with its undertaking of a joint venture with the Syrian Defense Ministry. The American Jewish Congress provided Holtzman with documentation proving that Baxter had illegally agreed to avoid opening future plants in Israel and to sell its investments in Israel, in order to be removed from the Arab blacklist.

By introducing a NYCERS share holders” resolution demanding full disclosure from Baxter, Holtzman put tremendous pressure on the company. While Baxter representatives continued to claim that they had broken no laws and refused to make the information public, the controversy finally forced Baxter to concede they would not build the Syrian plant.

In September 1990 Holtzman opposed the Dayton Hudson Corporation’s decision to withdraw funding from Planned Parenthood. NYCERS owns over 600,000 shares of the company’ stock, making it the 22nd-largest institutional investor. As a result of pressure from shareholders, among others, Dayton Hudson eventually restored funding to Planned Parenthood.

Yet sometimes even the best intentions fall short of action. In early 1990, when AT&T withdrew its funding from Planned Parenthood, Holtzman’s NYCERS backed a resolution calling on AT&T to restore funding for Planned Parenthood’s teen pregnancy prevention efforts. Holtzman threatened to withdraw New York City pension funds (one-tenth of one percent of the company’s shares) from AT&T if the money were not reinstated to Planned Parenthood. However, although AT&T did not yield to shareholder pressure, NYCERS nevertheless held onto its shares of AT&T. A spokeswoman for Ms. Holtzman explained that because the NYCERS fund is so immense, it is difficult to move investments. In fact, the fund has divested only once in recent memory—from South Africa.