For Immediate Release
Tuesday, November 11, 2003
Statement of AFSCME President Gerald W. McEntee on the Acquisition of Edison Schools by Florida's State Pension Fund
Buying a failing corporation like Edison does not make sense to either the seniors who depend on the Florida retirement fund or the hardworking public servants whom Edison wishes to replace.
Florida's retirees and public employees are still recovering from their pension plan's loss of more than $420 million from investments in Enron and WorldCom. The Florida State Board of Administration's (FSBA) investment in Enron stock alone caused a loss of more than $300 million — nearly three times more than that of any other state retirement fund. And our members invested in the Florida retirement system are not happy to see that the $92 billion pension fund is now planning to gamble away an additional $182 million on another failing company.
This investment deals yet another blow to the retirement fund that has lost hundreds of millions of dollars due to the poor judgment of its investment managers and the lack of oversight from the FSBA, chaired by Governor Jeb Bush. We need employee representatives on the FSBA to provide the proper oversight of our members' retirement funds.
In its 10 years, Edison Schools has had only one profitable quarter while accumulating deficits and losses of more than $353 million dollars and its stock price fell from $36 to under $2. In 2000, Edison CEO Chris Whittle exercised more than $10 million in options. The only winner in this transaction is Chris Whittle, who stands to make millions of dollars at the expense of shareholders and Florida's hardworking public employees.
