RE: Access to Worker-Friendly Capital

[jdoggett <jdoggett@kent.edu>]

At 05:59 PM 2/14/01 -0800, you wrote:
Self dealing prohibitions (and a
sensible aversion to creating the proverbial "moral hazard") may prevent the
electricians, for instance, from loaning pension money to their employers, but 
it
does not necessarily prohibit them from investing in a local company with 
which
their employers traditionally do a lot of business.



I think that this is a really good point to consider.  If a pension fund can 
not loan in the company which is employee owned but can loan to other 
companies that are not employee owned, then does that negate the effort?  I 
would have to say that it seriously undermines a collective effort.  If the 
overall goal is to enfranchise, then the mechanisms that thwart such efforts 
need to be viewed.

Is anyone familiar with why such a prohibiting factor exists in the first 
place?  Could there be conflicts of interests and the possibility that the 
pension fund may be too reliant on the company funding it?  In other words, if 
the pension fund loans too much money to the company that also provides it 
with the retirement benefits for the same company's workers, then does the 
pension fund/retirement fund face liquidity/bankruptcy/or pyramid-scheme 
issues?

Joseph

Also, the fund that I referenced earlier is called the Crocus Fund, 
established and maintained in Manitoba, Canada.  The article can be found at 
the following address.
http://dept.kent.edu/oeoc/Sum1998/InvestSum1998.html

The specific edition and title are
Summer 1998 Owners At Work
New Investment Fund Targets Unionized Firms and Employee Ownership

For more information on the oeoc and their publication, owners at work, please 
see the website
www.kent.edu/oeoc