The state teachers' retirement system is attempting to divest itself from a company that finances the manufacture of assault weapons like the one used at Sandy Hook Elementary School. But even if it does, it still won't be out of the gun business.
After Adam Lanza slaughtered twenty first graders and six adults last month in Newtown, Connecticut, teachers' unions across the nation emerged as some of the most vocal advocates for stricter gun control laws. But not long after the mass shooting, it also was revealed that the California teachers' retirement system likely helped finance the production of the assault weapon that Lanza used at Sandy Hook Elementary School. The California State Teachers Retirement System (CalSTRS) is a major investor in Cerberus Capital Management, a private equity firm that controls Freedom Group, the manufacturer of the Bushmaster XM15 assault rifle — the weapon that made Lanza's rampage at Sandy Hook so swift and deadly.
CalSTRS is now demanding that Cerberus sell Freedom Group, but even if it's successful, the pension fund likely will still be in the gun business. In fact, extracting itself completely promises to be a Herculean task.
Cerberus is the world's fourteenth-largest private equity firm; it manages $25 billion in investments. In Greek mythology, Cerberus is the three-headed wolfhound that guards the gateway to the underworld of Hades. Hercules' final and most dangerous task is to capture the Cerberus alive. And befitting its mythological namesake, Cerberus Capital Management invests in companies intimately involved in war and death.
Freedom Group's "family of companies," as the gun maker calls its holdings, was assembled by Cerberus in the late 2000s as a result of fifteen strategic mergers and acquisitions. In just a few years, Cerberus became one of the largest gun profiteers in the world. In addition to Bushmaster, Freedom Group brands include well-known gun makers like Remington and Marlin, along with several ammunition producers. Freedom Group also owns TAPCO, a "tactical weapons gear" company that sells thirty-round, high-capacity magazines for assault rifles like the Bushmaster XM15. Freedom Group sells its weapons in the massive US civilian market through licensed dealers, but its guns trade by the millions on the less-regulated secondary markets of gun shows, personal sales, and black markets.
CalSTRS is one of Cerberus's biggest limited partners. As such, the ultimate owners of the arms manufacturing company that made the rifle used in Sandy Hook are California's K-12 and community college teachers.
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This article was originally published by the East Bay Express on January 23, 2013.