American Federation of Teachers president Randi Weingarten has been targeting hedge funds with ties to right-leaning groups. Her main tactic has been to mount PR campaigns against these funds in the hopes of getting them to cut off funding to the groups.
Weingarten collected three scalps this week when she managed to get New York money managers Cliff Asness, Henry Kravis and Thomas McWilliams to stop funding the free-market Manhattan Institute. (UPDATE: See correction below) Among the institute’s issues is public sector pension reform and its solutions include reducing benefits and increasing worker contributions — stances AFT adamantly opposes.
The New York Post reports:
AQR founder Asness has agreed not to renew his term on the Manhattan Institute board of trustees when it expires in less than a year and to work with the group to “moderate” its position on defined benefits in the meantime, according to e-mails sent to the AFT that The Post reviewed.
Meanwhile, Court Square Managing Partner McWilliams has resigned from the Manhattan Institute board.
KKR, whose founder Henry Kravis contributed to the Manhattan Institute through a foundation he runs, has agreed to what the AFT called “a greater alignment between [KKR’s] commitments and the future health and viability of public sector defined benefit plans,” according to a letter from AFT President Randi Weingarten to KKR.
“We’re glad a growing number of managers recognize it doesn’t make sense to solicit the hard-earned retirement savings of teachers and public employees while at the same time serving on the boards of organizations trying to wipe out those pensions,” said Weingarten.
The institute has denounced AFT’s campaign as: “[A]n attempt to intimidate our supporters and silence our fellows. An organization representing teachers should understand the imperative need for an open dialogue that produces the most constructive solutions benefiting all Americans.”
The Post story reports that an earlier target of AFT, hedge-fund mogul Dan Loeb, has resisted their efforts and even denounced the AFT as “bullies.”
CORRECTION: Asness has issued a categorical denial of the Post’s report. His office emailed the following statement to the Examiner:
The New York Post and Bloomberg News have reported that I intend to resign in the near future as a trustee of the Manhattan Institute. That is not true, and it should be corrected. I will continue to serve on the board because I share the Institute’s respect for the power of liberty to better people’s lives (which, of course, as for anyone in a similar position, does not translate to my sharing their every opinion). I will also continue to work in support of defined-benefit plans in order to ensure they play an important role in providing for the secure retirement of their beneficiaries, a vital national interest, and will carry on my long-standing advocacy for pension plan participants, individual savers and public trusts, even when this is contrary to entrenched Wall Street interests.
His company, AQR, also issued a statement:
Contrary to some reports, Cliff Asness is and will continue to be a board member of the Manhattan Institute because he shares the Institute’s respect for the power of liberty to better people’s lives. Cliff’s daily mission at AQR is to work to ensure that all pension plans, very much including defined-benefit plans, continue to provide for the secure retirement of their beneficiaries, a vital national interest.
A spokeswoman for KKR denied to comment on the record regarding the Post’s report.
McWilliams could not be reached. His office said he would out for several days.
A spokesman for the Manhattan Institute could not be reached.
A spokeswoman for the AFT had no immediate comment.
UPDATE: AFT provided the Examiner with copies of email correspondence between it and AQR. In a May 24 message, AQR co-founder David Kabiller said: “Cliffs (sic) board term is about another 10 months. Will see how he can help (not sure) moderate their position on this issue. The research their academics do there still has independence to it. Thanks.”
AFT spokeswoman Janet Bass said: “Basically – Cliff Asness says he’ll resign from the board when his term is up, in about 10 months, and ‘moderate’ Manhattan Institute’s position in the meantime.”
Kabiller’s statement does imply that Asness is distancing himself from the Manhattan Institute but it does not seem as categorical as Bass asserts. An AQR spokesman could not be reached for comment.