Why CalPERS is being pushed to divest from Tesla

Elon Musk, the tech mogul who runs Tesla, said in December that diversity, equity and inclusion efforts “must die.” Now, two civil rights groups are calling for the nation’s largest public pension fund to divest from the electric vehicle maker.

On Wednesday, LatinoJustice and the National Institute for Workers’ Rights sent a letter to State Controller Malia Cohen pushing for the California Public Employees’ Retirement System to get rid of its Tesla holdings, arguing that the company’s values are “misaligned,” and that Musk’s claims that promoting diversity is as morally wrong as racism is “indefensible.” Cohen is a board member of CalPERS, which had $530 billion in assets as of Tuesday.

The letter: “In the face of continued occupational segregation and wage disparities by race, national origin, and gender, DEI efforts are an economic and social imperative. California’s public sector workforce is incredibly diverse, with 60% of civil service employees in the state being non-white.”

The letter also cited Tesla’s $3.2 million March settlement to a Black former employee who accused the company of racial discrimination as an example of its “troubling values.” The settlement came a month after Tesla dropped prior language from its regulatory filings that supported employee resource groups and fostering diversity. 

A spokesperson said CalPERS is reviewing the letter.

The emailed statement: “These are serious issues. … CalPERS believes that the employees of every company in which we invest have the right to a safe and healthy work environment, one in which their fundamental human rights are respected.”

In June CalPERS voted against a $46 billion compensation package that Tesla ultimately rewarded Musk, calling it “exorbitant,” while agreeing that Musk “is entitled to be well compensated for his work.”

But pushing for the pension fund to divest is a tall ask: CalPERS is one of Tesla’s top shareholders. It owned nearly 9.2 million Tesla shares as of June, which would be worth more than $2 billion, based on Wednesday’s stock price.

Other campaigns for divestment have also failed. After calls from climate activists, labor unions and other advocacy groups, the state Legislature considered a bill that would have directed CalPERS and the California State Teachers’ Retirement System (the second largest public pension fund in the U.S.) to divest from fossil fuel companies. 

CalPERS successfully opposed the measure, arguing that divesting would do little to reduce greenhouse emissions and that fossil fuel companies can simply replace CalPERS with new investors.

But CalPERS has divested from companies in Sudan for the country’s role in the Darfur genocide and in Iran for sponsoring terrorism. It also sold off some of its holdings in the coal and tobacco industries, as well as the gun industry after the Sandy Hook Elementary School mass shooting.

Election Day in California is more like election month — or two months. 

Here’s your reminder why: All 22 million registered voters should have received their mail ballots last week and early voting sites opened Oct. 7, about a month before Nov. 5. 

And it can take as long as a month after Nov. 5 for winners to be declared in some very close races. 

The long wait is a source of frustration for voters and candidates alike, and has fed conspiracy theories. But it’s the product of mail ballots and the extra time allowed for them to be counted and verified (they can arrive as late as Nov. 12, as long as they’re postmarked by Nov. 5). 

The deadline for county election officials to certify the election results is Dec. 5. But they’re already reporting how many early votes have arrived. 

As of Wednesday, about 600,000 ballots had been returned, significantly less than at the same point in 2020 or 2022, according to the Political Data tracker. Election expert Paul Mitchell cautions, however, not to read too much into the early numbers, including how many by party in districts. 

He says the early returns shouldn’t be used to predict winners and losers because of several factors: The mechanics of how each county processes ballots, changes in voter attitudes and differences in messaging by Democrats and Republicans about voting by mail.

Mitchell, on social media: “There’s plenty to learn from early vote, but it isn’t meant to predict outcomes … maybe someday all the processes will be standardized and we will have enough elections to compare … but that’s not true today.”

Speaking of the election, let’s get into some campaign news:

U.S. Senate cash race: CalMatters politics reporter Yue Stella Yu writes that for the second quarter in a row, Republican Steve Garvey has outraised Democratic Rep. Adam Schiff in California’s U.S. Senate race, but entered October with less money on hand, the latest federal filings show.

Garvey — who has largely run a low-key campaign with a focus on fundraising — raised $5.9 million between July and September, according to campaign finance reports filed Tuesday. His campaign spent a total $5.4 million during the same period, including at least $1.2 million in advertising and media production. He also paid his son, Ryan Garvey, $22,500 in wages, totaling almost $50,000 throughout the cycle, data shows.

Schiff, in comparison, raised $5.5 million and spent $2 million during the three-month period, but entered October with $10 million in the bank — almost three times the $3.8 million Garvey had by the end of September. He also raised $7 million for Vice President Kamala Harris’ presidential bid and Democrats in other battleground races, his campaign said Wednesday. 

Between April 1 and June 30, Garvey outraised Schiff by about $1 million.

Proposition 6 in trouble?: Despite no formal opposition campaign, the statewide ballot measure to limit forced prison labor still may fail, writes CalMatters California Local News Fellow Joe Garcia.

A September poll by the Public Policy Institute of California found that half of likely voters oppose Prop. 6. One reason could be Prop. 36, another ballot measure with broad public support that seeks to increase penalties for certain drug and theft crimes. Assemblymember Lori Wilson, the Suisun City Democrat who authored the bill behind Prop. 6, said Prop. 36 could be influencing people’s impressions of Prop. 6 and is “messing with the numbers out there.”

Learn more about Prop. 6’s struggles in Joe’s story.

California’s $25 minimum wage for health care workers kicked in Wednesday. According to a UC Berkeley Labor Center report, three-fourths of workers who will benefit are women or people of color. Read more about the issue from CalMatters health reporter Ana B. Ibarra.