The shooting at Sandy Hook Elementary
Last Friday's mass shooting at an elementary school in Newtown, CT, seems to have caused many Americans to give a second thought to our nation's lax approach on gun control. Perhaps a massacre, where 20 of the 26 victims were children between the ages of 5 and 10, will lead to change in our culture of weaponry.
It already has led to attention for those who financially support gun manufacturers. Some investors are scurrying to distance themselves from companies that design, build, and market guns like the ones Adam Lanza used to commit mass murder at Sandy Hook Elementary School.
One prominent investment company seems to be in no hurry to separate itself from America's gun industry. Perhaps that's because the company already supports at least one chief executive who has a documented history of abusing children.
With that sort of record, The Vanguard Group might be expected to react to the Newtown massacre with a collective shrug. And that is exactly what the company, based in the Philadelphia suburb of Malvern, Pennsylvania, seems to be doing.
It takes an investment firm that is callous, ill-informed, or both to support Campus Crest Communities, a Charlotte-based developer of student housing near universities around the country. After all, Campus Crest CEO Ted Rollins has a criminal record that includes an assault on his 16-year-old stepson. Rollins also was the subject of an investigation into allegations of child sexual abuse involving the same stepson.
Vanguard HQ in Malvern, PA
Those events took place in the 1990s in Franklin County, North Carolina. As happened in the case of former Penn State assistant football coach Jerry Sandusky, initial allegations of child sexual abuse involving Ted Rollins were more or less covered over. In the case of Sandusky, it took another 15 years or so for criminal charges to stick, and the one-time defensive coordinator under coaching icon Joe Paterno now is expected to spend the rest of life behind bars. In the case of Ted Rollins, he never has received serious scrutiny from the criminal justice system and, thanks largely to his membership in one of America's wealthiest families, Rollins has become head of a company that completed a $380-million Wall Street IPO in late 2010.Do investors care that a chief executive has a proven history of beating a child--with clear ties to an investigation for child sexual abuse? Do investors care that their funds support gun manufacturers whose products then are turned, in a deadly fashion, on children in an elementary school?
In the case of those who invest with The Vanguard Group, the answer to both questions appears to be no. Let's consider the firm's recent history:
According to an article yesterday in the Huffington Post, one of the largest shareholders in gun manufacturer Sturm Ruger is The Vanguard Group. Sturm Ruger made the assault weapon used by Anders Breivik during a July 2011 killing spree that left 77 people, mostly teenagers, dead in Norway. Sturm Ruger is based in Southport, CT, less than 30 miles from Newtown.
The HuffPo piece is titled "Gunmaker Investments Under Review By California Teachers' Fund After Newtown Massacre." John Rudolf and Chris Kirkham report that Wall Street is backing away from the gun industry, and the California State Teachers' Retirement System is re-examining multimillion-dollar investments in two publicly traded gun companies, Smith and Wesson and Sturm Ruger.
What about other major investors in gun companies? They include The Vanguard Group, and HuffPo reports:
Other major investors in Sturm Ruger include The London Company, Allianz Global Investors Capital, Renaissance Technologies and The Vanguard Group, one of the nation's largest 401(k) providers.
Combined, those five investors hold nearly a third of the company's stock. All but BlackRock and the Vanguard Group did not respond to requests for comment. A spokesman for the Vanguard Group said Monday that the vast majority of the company's holdings in Sturm Ruger were tied to investments in certain index funds that include Sturm, Ruger.
A spokesman for BlackRock also said the fund's investments in the gun companies were tied to stock indexes.
The presence of index funds appears to be the explanation for Vanguard's ties to the gun industry. So how does Vanguard explain its support of Campus Crest Communities and its CEO with a history of abusing children?
We will be posing that question shortly to executives at the investment firm. But for now, the connections to Campus Crest Communities are spelled out in public documents.
Ted Rollins
Reports at Yahoo! Finance show that Vanguard is the No. 1 institutional investor in Campus Crest Communities, with a stake worth almost $47.8 million. The Vanguard Specialized REIT Index Fund has almost 2.4 million shares in Campus Crest Communities, more than any other mutual-fund holder.What does all of this mean? The Vanguard Group is a top investor in one of the nation's leading gun manufacturers, a company whose products have helped bring countless young lives to premature ends. Vanguard also is the No. 1 investor in a company with a CEO who has documented ties to child abuse.
What kind of investment firm lends massive financial support to organizations that have proven ties to the murder and abuse of young people? Does Vanguard care only about making money, the bottom line? Does it have a social conscience of any sort?
We will be examining those questions, and more, in upcoming posts.
Meanwhile, you can check out below the Franklin County, North Carolina, court documents that prove Ted Rollins was convicted for assault on a 16-year-old boy. And by definition, such an assault amounts to child abuse under state law.
This is the kind of individual who draws financial support from The Vanguard Group:
Ted Rollins Arrested for Assault
Ted Rollins Convicted of Assault
