From: Eugene Feingold <feingold@SPH.UMICH.EDU>

Subject: A message from Educators for Tobacco-Free Investments by TIAA-CREF

YOU CAN VOTE IN OCTOBER TO HAVE TIAA-CREF DISPOSE OF ITS TOBACCO INVESTMENTS

CREF (College Retirement Equities Fund) owns almost $2 BILLION of tobacco stock, most of it in Philip Morris, a director of which sits on the CREF Board.

If you're a CREF participant, you have good reason to be uncomfortable with these investments, on both ethical and financial grounds. And you'll have the chance to do something about it in October when you receive your annual proxy mailing from TIAA-CREF.

On that proxy ballot is a proposal, sponsored by Dr. C. Everett Koop, former Surgeon General of the United States, and Eugene Feingold, past president of fthe American Public Health Association, which asks that CREF divest itself, in an orderly fashion, of its tobacco-related investments. I urge you to vote for the divestiture resolution. This position has been endorsed by former Harvard University president Derek Bok, the American Medical Association, the American Public Health Association, and the Michigan Conference of the AAUP, among others.

Tobacco is a risky investment; the financial risks for the industry are evident from the efforts it has been making to settle the suits against it. Congress is considering what to do about these settlement efforts. It's particularly important for the intellectual leadership of our country to point up the illegitimacy of the industry so as to discourage the kind of kowtowing to industry desires that we've seen in the past.

TIAA-CREF management says that current prices of tobacco stocks already reflect these risks. But not all financial analysts agree. Moreover, it is not necessary to invest in tobacco to gain adequate returns. The Pioneer Fund, which has been tobacco-free for 68 years, has had an average annual return over that period that exceeds the Standard and Poor 500 index by almost 3% a year. Harvard University earned a return of 33.9% on its U.S. stock portfolio for the 12 months ending June 30, 1996, wholly free of tobacco's ethical and financial hazards.

TIAA-CREF management has also argued that those who don't wish to invest in tobacco can choose its Social Choice Account. But this account does not serve investors who want only a stock fund, and those who want a fund that excludes only tobacco investments. The Social Choice Account invests in both stocks and bonds, and excludes many other kinds of stocks in addition to tobacco. (Parenthetically, the stock portion of the Social Choice Account has out-performed the CREF Stock Account over the last five years, giving the lie to management's suggestion that a total restriction on tobacco investments would necessarily result in weakened performance.)

And the Social Choice option does not respond to the health and moral arguments against CREF'S investment in tobacco.

A recent World Health Organization-sponsored study reported that smoking caused 3 million deaths world-wide in 1990. In the United States, nearly 450,000 die every year from tobacco-related illnesses. If tobacco companies are to maintain their profits, they must replace the smokers who die -- and they do this by targeting their advertising in this country to young people, ethnic minorities, and women. Studies have shown that the industry's aggressive marketing has a major impact on children.

A vote for the Koop-Feingold proposal, asking CREF to divest itself of its tobacco investments in an orderly fashion, is a financially prudent and ethical choice.

Please forward this message via e-mail to faculty and staff on your campus and to your friends on other campuses. Make others aware of it by posting copies in your department, writing letters to your campus and local newspapers, or in any other way you can think of.