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1 Aug 07 Update:

JULY 17 IS TIAA-CREF'S ANNUAL MEETING. PLEASE ACT BEFORE THEN TO PROMOTE SOCIAL RESPONSIBILITY. CONTACT TIAA-CREF IF YOU ARE A PARTICIPANT. PARTICIPANTS AND NON-PARTICIPANTS CAN HELP BY DISTRIBUTING THIS MESSAGE TO COLLEGE PERSONNEL AS WIDELY AS POSSIBLE. THANKS

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MAKE TIAA-CREF ETHICAL COALITION

IS YOUR INVESTMENT REALLY GOING TOWARD THE “GREATER GOOD”?

Dear Professor/Staff Member:

It’s morning in America---do you know where your pension fund assets were last night?

Would it upset you to know that TIAA-CREF---the nation’s largest retirement fund---is a major investor in companies like Wal-Mart, Nike, Costco, Coca-Cola, Chevron, and Philip Morris/Altria? Millions of TIAA-CREF participants are contributing their money to support abusive human and labor rights practices, destruction of the environment, and harming of human health.

The fact is, some of our country’s worst corporate violators are right at home in the portfolio of TIAA-CREF—which says it provides financial services “for the greater good.”

Recently the 600,000-member New York State United Teachers (NYSUT) passed a resolution critical of CREF’s continued investment in several of these these corporations. (See attached resolution.) Then soon after, the 1.3 million member strong American Federation of Teachers passed a similar resolution. As educators and those working along-side them,, we have spent our careers trying to help students learn the truth about the world around them. The truth is that TIAA-CREF continues to invest our funds in these corporate bad actors.

We don’t want our investment—

exploiting Third World workers at Nike vendor sweatshops
aggressively union-busting American workers at Wal-Mart
destroying historic Mexican culture to build Costcos-- and abusing the human rights of those who protest.
Polluting drinking waters in India; allowing the intimidation or even killing of union workers under the not-so-watchful eye of Coca-Cola bosses in Colombia
Financing the dictatorship in Burma (Myanmar) that savagely abuses human rights
Supporting the killing practices of Philip Morris/Altria, including its marketing to youth

It’s time for faculty, staff, and students on campuses across America to tell TIAA-CREF it must use its considerable shareholder power to influence these corporations for the better--or stop investing in them.

What can you do? Let’s turn up the heat on CREF to truly invest for the “greater good.” Help us educate the faculty, staff, and students on your campus and nationwide. Email this message to others at your school and elsewhere. All of us need to:

Call TIAA-CREF at 800-842-2733 (212-490-9000) and ask for CEO Herb Allison. Leave the message: “I want TIAA-CREF to put Wal-Mart, Nike, Coca Cola, Costco, Chevron, and Philip Morris/Altria on notice that if they don’t clean up their human rights, environmental, and health practices, that CREF will find other companies to invest in.” Tell them if you are in the TIAA-CREF system.
Email Mr. Allison and TIAA-CREF Trustees with the same message: Hallison@tiaa-cref.org; trustees@tiaa-cref.org

For the Coalition, www.makeTIAA-CREFethical.org mail njwollman@manchester.edu for campaign updates (say “TC updates” in subject line).

Neil Wollman; Ph. D.; Senior Fellow; Professor of Psychology; Manchester College, North Manchester, IN 46962;

Sprawl-Busters, Press for Change,Campaign to Stop Killer Coke/Corporate Campaign, Inc.,Campaign for a Commercial-Free Childhood, Social Choice for Social Change, Citizens Coalition (Frente Civico), Educating for Justice, National Community Reinvestment Coalition, United Students Against Sweatshops, Canadian Committee To Combat Crimes Against Humanity (CCCCH), Corporate Accountability International (formerly Infact), World Bank Bonds Boycott.

Make TIAA-CREF Ethical is a project of the Peace Studies Institute, Manchester College.

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6 Mar 07 Update:

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5 Jun 06 Update:

Neil Wollman; Ph. D.; Senior Fellow, Peace Studies Institute; Professor of Psychology; Manchester College, North Manchester, IN 46962; njwollman@manchester.edu; 260-982-5346; fax 260-982-5043

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22 Sep 06 Update:

Through the years--and due to the contributions of many--we have moved pension giant TIAA-CREF to institute various socially responsible investments and policies. For example, hundreds of millions of dollars have been put toward low-income area community investment. Due to our lobbying, TIAA-CREF decided last year to engage in shareholder advocacy to influence companies engaging in socially and environmentally irresponsible behavior.

TIAA-CREF has now begun decision-making on which issues and companies to influence. The Make TIAA-CREF Ethical coalition (see members below) has targeted six companies because of specific egregious behaviors. They are: (go to www.MakeTIAA-CREFethical.org for details)

Altria/Philip Morris, responsible for Marlboro-the #1 cigarette brand among youth

Nike and Wal-Mart, widely condemned for their use of sweatshop labor (and Wal-Mart for and other bad practices for its impact on domestic labor, sprawl, and local economies)

Costco, for its warehouse in Cuernavaca, Mexico, which severely damages an archeological site and abuses human rights

Coke, for human rights and environmental abuses overseas—and advertising to children in the

U.S.

Communicate that message to CEO Herbert Allison; 800-842-2733; 212-490-9000; HAllison@tiaa-cref.org (Calls are far preferable—you can simply leave a message with an assistant.) Strengthen your influence with an additional brief message to trustees@tiaa-cref.org.

The Make TIAA CREF Ethical coalition consists of: The US Campaign for Burma • Corporate Accountability International (formerly Infact) • World Bank Bonds Boycott • Press for Change • Social Choice for Social Change • Canadian Committee To Combat Crimes Against Humanity (CCCCH) • Citizens Coalition (Frente Civico) • Educating for Justice • National Community Reinvestment Coalition • Campaign to Stop Killer Coke/Corporate Campaign, Inc. • Campaign for a Commercial-Free Childhood • Sprawl-Busters

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29 Jul 06 Update:

As a generalization, things went excellent at the TC annual meeting. Ray Rogers (Killer Coke campaign) said we hit a double grand slam!

TC CEO Herbert Allison announced that they were exploring possibilities for Community Investing in the Social Choice Account (SCA)! That, of course, is one of the primary goals of our SCSC effort. Now, we did hear that two years ago, before they backtracked and essentially said no go. So we are optimistic again, but not too much so till we see what evolves. Mr. Allison also announced a new initiative for "micro-lending," which is not too far removed in principle from our desire for social venture capital in the SCA. We have professionals approaching them on such investment and hope that that, too, will come to pass some day.

We totally dominated discussion (see the attached press advisory to see some of the arguments of our larger TC Coalition). We did some praising of TC, for they have started some new initiatives along socially responsible lines (directly or indirectly attributable to our work over the years). But we hit them hard on areas where they need to do more. We had over a dozen folks speaking up about our target companies, as well as our community investment and social venture capital concerns. TC officials dully took their notes and expressed their interest, but experience has taught us that we can't go totally on appearances at an annual meeting where they need to be nice one day a year. SO... we need to keep up the fight. And we had a better crowd outside this year, but still not what we were hoping for-- guessing we were in the 25-30 range all told.

(Spend five minutes to support our proposed changes in TIAA-CREF’s socially responsible fund.)

In the 1980s, participants lobbied the pension giant TIAA-CREF (TC) for five years to set up a socially responsible fund, the Social Choice Account. Since then we have successfully lobbied for other changes. Now we are pushing for an improved fund with practices that are becoming standard in socially responsible investing (see below). Our effort has been endorsed by many academic and activist groups, and individuals like Noam Chomsky and Howard Zinn. (See below for a history of the campaign, including discussion of why we restarted the effort after TC reneged on certain commitments. Our web site is www.makeTIAA-CREFethical.org/SocialChoiceForSocialChange.html

We are also part of a national coalition of activist groups that is pushing for TC to use its shareholder advocacy to influence six target companies display egregious behavior, like Wal-Mart and Coke. After years of lobbying, they agreed to do shareholder advocacy on issues of social responsibility. See http://www.makeTIAA-CREFethical.org for more information.

Social Choice for Social Change is a project of the Peace Studies Institute, Manchester College. For further information, contact Neil Wollman, Ph.D.; Senior Fellow, Peace Studies Institute and Professor of Psychology; Manchester College, North Manchester, IN 46962; njwollman@manchester.edu .

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Social Choice for Social Change: TIAA-CREF Broke Its Promises, We Restarted the Campaign

Since 1984, we have lobbied educational pension giant ($ 400 billion) TIAA-CREF (TC) to be more socially responsible in its investing. They resisted our efforts for years, but as a result of our pressure and dialogue, TC created a socially responsible fund [the Social Choice Account (SCA), now with over $ 8 billion in investments --and with a strong financial return record].

For many years we have pressured TC to further improve the SCA by adding (a) low-income area community investment; (b) social venture capital (in new companies promoting socially and environmentally responsible products/services); (c) shareholder advocacy (voting on shareholder resolutions and lobbying portfolio companies to advance social and environmental responsibility); and (d) screening investments by using positive (not just negative/exclusionary) criteria, thus seeking companies that make a positive contribution to society. All of these are quite feasible and have been done successfully in other socially responsible mutual funds. They are also consistent with TC’s own Policy Statement on Corporate Governance and its advertising tagline of "Financial Services for the Greater Good." The campaign has been endorsed by dozens of academic and activist groups.

Using a variety of tactics—getting publicity to the public, generating hundreds of calls and emails to TC’s offices, leafleting at conferences where TC representatives spoke, doing demonstrations—we finally succeeded in getting TC to listen.. In 2002 they made one important change (positive screening) and in April 2004, TC officers finally agreed to seriously address our proposal and subsequently made various commitments to move forward. However, though we stuck with our promise to put our public campaign on hold, TC only fulfilled one of our requests, to use its shareholder advocacy to influence the corporate and social responsibility of its portfolio companies.

And so the campaign is back in full gear. We need your help if we are to succeed again. Even if you are not in the TC retirement system, you can promote the campaign.

a.      contact or ‘adopt’ a TC trustee in your area
b.      visit a local TC office
c.      participate in demonstrations or leafleting in your area (or at annual TC meetings)
d.      further promote the issue to colleagues beyond forwarding this message
e.      ask your organization/institution to endorse our effort; then tell TC
f.       express your concerns to TC representatives visiting your campus
g.      liaison with other groups with similar interests
h.      distribute our TC money at conferences, demonstrations, and otherwise
i.       help on media
j.       flier outside the TC national off (Manhattan) once a week or once a month by yourself or with others
k.      get your college president to write a letter to TC.
l.       get creative: cook up some new tactics, or suggest them to us

Thanks so much,
Neil Wollman, Ph.D.
Chair, Social Choice for Social Change: Campaign for a New TIAA-CREF
Senior Fellow, Peace Studies Institute, and Professor of Psychology, Manchester College
NJWollman@manchester.edu 260-982-5346

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11 Jul 06 Update:

For TIAA-CREF participants: Raise your voice inside the annual meeting in New York City, July 18.

For participants and sympathetic others: Demonstrate outside the corporate office in New York.

► use its shareholder power to influence the corporate behavior of Wal-Mart, Coke, Costco, Nike, Chevron, and Philip Morris/Altria (see below);

► pledge not to buy World Bank bonds because of their effects on Third-World citizens;

► invest in social change ventures for the Social Choice Account (such as in low-income are housing and start-up companies promoting environmental protection);

► clean up its own corporate failings (e.g., removing two trustees, as recommended by the SEC, because of conflicts of interest) (see below).

MAKE YOUR PLANS NOW: Meeting begins 9:00 a.m., Tuesday, July 18 (participants call 1-877-535-3910, ext. 2440 for a pass to attend). Demonstration runs 8-9:30 AM; 730 Third Ave. (between 45th and 46^th Streets).

MARK YOUR CALENDAR NOW: Calls and emails: Anyone can raise a voice from their hometown during the week before the meeting (July 10-18). Call CEO Herbert Allison at 800-842-2733 or 212-490-9000. Ask for Mr. Allison and speak to his assistant. Calls are best, but you can also email HAllison@tiaa-cref.org. For background, see below or www.makeTIAA-CREFethical.org (and sign-up at web site for campaign updates). For further details, contact NJWollman@manchester.edu.

The US Campaign for Burma • Corporate Accountability International (formerly Infact) • World Bank Bonds Boycott • Press for Change • Social Choice for Social Change • Canadian Committee To Combat Crimes Against Humanity (CCCCH) • Citizens Coalition (Frente Civico) • Educating for Justice • National Community Reinvestment Coalition • National Congress for Community Economic Development • Campaign to Stop Killer Coke/Corporate Campaign, Inc. • Campaign for a Commercial-Free Childhood • Sprawl-Busters

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The nation’s largest pension system, TIAA-CREF, a retirement fund mainly for educators, prides itself on responsiveness to shareholders and being a “concerned investor” regarding social responsibility. Its "Policy Statement on Corporate Governance" states that “TIAA-CREF believes that building long-term shareholder value is consistent with directors giving careful consideration to issues of social responsibility…Efforts to promote good corporate citizenship may serve to enhance a company’s reputation and long-term economic performance…” It specifically notes environmental impact, labor practices, human rights, and the common good of a corporation’s communities. In one ad it notes "…our approach to investing goes beyond sound portfolio management. We are mindful of our social responsibilities…" And their tagline reads, "Financial Services for the Greater Good."

And yet, despite these statements:
· TIAA-CREF holds shares in corporations such as
Costco – promotes police abuse and the destruction of cultural heritage and the environment
Nike and Wal-Mart – condemned for selling products produced by overseas sweatshop labor
Wal-Mart – maintains bad domestic labor practices, hurts local business, and promotes urban sprawl
Chevron – runs business ventures with Burma’s government that help support that brutal regime
Philip Morris/Altria – promotes Marlboro, the #1 deadly cigarette brand among youth
Coke – markets nutritionally deficient products to kids at home and is tied to human rights abuses and water shortages abroad
TIAA-CREF divested its harmful World Bank bonds and should state it will buy no more.
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A New York Times article published after a previous TIAA-CREF annual meeting in New York

At the annual meeting yesterday of the largest investment organization catering to university and college faculties and staff, investors raised questions about the chief executive's pay and urged greater emphasis on selecting stocks according to the social and moral character of corporations.

Some of those attending the meeting in New York of the College Retirement Equities Fund, part of TIAA-CREF, the pension fund giant, complained about the poor performance of their pension and retirement plans during the last three years of depressed markets. But a message echoed repeatedly was that here was a group of investors who would accept a little less profit in exchange for making the world a little better.

"It's not only important how much income you get, but how you get it," said Donald W. Shriver, a former president of Union Theological Seminary in Manhattan.

Herbert M. Allison Jr., who joined TIAA-CREF as chief executive last fall after stepping down as president of Merrill Lynch, said, "We are mindful of the social issues." He added that the company tried to balance social concerns with its legal obligation to do its best to provide financial security and earnings for its more than 3.2 million investors.

But both Mr. Allison and Martin L. Leibowitz, the chief investment officer, indicated that the company's long-held, relatively conservative policy of investing in stock indexes, or baskets of stocks, meant that it would inevitably put money into companies that sell harmful products like cigarettes or that have been accused of abusive labor practices. Investors in an index, by definition, give up the freedom to pick and choose.

CREF already offers one of the largest funds that invests only in corporations that meet certain social criteria. But of the roughly $300 billion of TIAA-CREF's assets invested on behalf of clients, only about $5 billion is in its "social choice" fund.

The investors, many of them identifying themselves as Ph.D.'s as they rose to speak, seemed pleased at several changes that Mr. Allison announced in the company's corporate governance. For the first time, an independent trustee, not employed by the company, is to become chairman of the board of trustees, he said, and terms of the eight trustees will be reduced to one year from four years, which means that all will stand for election annually. As of today, the chairman will be Martin J. Gruber, a finance professor at the Stern School of Business at New York University.

Mr. Allison's $8 million in salary and bonuses, which the company disclosed early last month, is nearly 50 percent more than his predecessor was paid. For some investors, the pay increase contrasted painfully with Mr. Allison's earlier announcement that he was laying off 500 employees.

James W. Keady, the founding director of Educating for Justice, a nonprofit organization that advocates social awareness for high school and college students, calculated that even without the roughly $4 million Mr. Allison was expected to receive in bonuses for long-term performance, he was being paid more than $10,000 a day. "If you have more money than you need," Mr. Keady said, quoting Gandhi, "you're stealing from somebody."

The roughly 150 investors at the meeting, more than double last year's turnout, broke into applause. Mr. Allison then turned the floor over to Ronald L. Thompson, the chief executive of a Midwest manufacturing company and chairman of the committee that conducted the chief executive search. Mr. Thompson said that the company had been in competition with "many large, aggressive organizations" to hire Mr. Allison, and that the compensation had to be competitive.

Throughout the meeting, Mr. Allison stood at a lectern at the front of the auditorium, listening more than talking. He remained calm, and so did most of the investors.

"We were very pleased with the meeting," said Steven Goldstein, a spokesman for TIAA-CREF.

The investors left in good spirits, too. "This is the most welcoming situation I've ever walked into," Mr. Keady told Mr. Allison and the others as the meeting ended.

He was speaking from experience at many conferences on corporate responsibility. "The atmosphere was much more open than I've found at other meetings," Mr. Keady said later.

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27 Jun 06 Update:

The nation's largest pension fund, TIAA-CREF, a retirement fund mainly for educators, prides itself on being a "concerned investor." Yet it invests in corporations like Altria/Philip Morris (tobacco deaths); Nike and Wal-Mart (sweatshops for both and many problems with latter); Costco (Cuernavaca, Mexico human rights, cultural, and environmental abuses); Chevron, (human rights issues in Burma); Coke (human rights and environmental abuses overseas—and advertising to children here); and World Bank bonds (harm to Third World citizens; TC divested these bonds-- but needs to pledge no new purchases). Contrast this with their advertising tagline of "financial services for the greater good."

This campaign is part of a continuing effort begun in the 80s that has successfully lobbied TC on various SR issues. Now a coalition of national advocacy groups urges TC to influence these companies to change their practices -- or to divest-- and instead invest in socially responsible (SR) ventures in their SR Fund and elsewhere [low-income area community development and social venture capital promoting new socially responsible SR products]. After lobbying, they agreed to use shareholder advocacy on SR issues and now they should apply that to our companies of concern. They've reneged on promises about putting Community Investment in their SR Social Choice Account.

Go to http://www.maketiaa-crefethical.org and http://www.maketiaa-crefethical.org/SocialChoiceForSocialChange.html
Receive campaign updates bi-monthly (NJWollman@manchester.edu); say “TC updates” in the subject line).
** The US Campaign for Burma • Corporate Accountability International (formerly Infact) • World Bank Bonds Boycott • Press for Change • Social Choice for Social Change • Canadian Committee To Combat Crimes Against Humanity (CCCCH) • Citizens Coalition (Frente Civico) • Educating for Justice • National Community Reinvestment Coalition • National Congress for Community Economic Development • Campaign to Stop Killer Coke/Corporate Campaign, Inc. • Campaign for a Commercial-Free Childhood • Sprawl-Busters**

We need your help to succeed. Even if you are not in the TC retirement system, you can help.

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31 May 06 Update:

New development from TIAA-CREF on social responsibility – My comment to the media – Article on TIAA-CREF Firing of Whistleblower

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First below is a press release yesterday from TIAA-CREF. It is certainly a positive development overall. Those involved with our long time efforts with TC can feel good that it has been our work over the years that moved them to focus more attention on such concerns and certainly helped lead to this result. They now go beyond our particular requests regarding social responsibility and that is a good development for us, the SRI field, and most importantly those in the world who benefit down the line.

Of course we don't yet know how it will play out; and as you can see below in comments I made to a reporter who called me, we still have complaints with the responsiveness of TC to our particular concerns.

Finally, see a second article below which came out the same day. Though it has not yet been established that TC did anything wrong, it is a (potential) other face to TC and corporate responsibility. (And it is certainly consistent with my knowledge of TC's dealings with its employees in the past, as told to me by some other whistle-blowers. But I have no insights on this particular case beyond hearing previously that this employee was disgruntled.)

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NEW YORK (MAY 30, 2006) -- TIAA-CREF, the financial services organization and leading provider of retirement plans in the academic, medical and cultural fields, has formed a new Social and Community Investing Department within its Asset Management area.

The department will focus on a series of investment programs and oversee the screening methodology used by the CREF Social Choice and the TIAA-CREF Social Choice Equity Funds. In addition, the new department will work on socially responsible investment product development and the formulation of policies around key social issues. The department's investment programs will seek out investment opportunities that are competitively priced and offer broad social appeal.

"The new Social & Community Investing department gives us another way to fulfill our financial commitment to our participants while continuing our leadership in the area of socially responsible investing," said Scott C. Evans, head of TIAA-CREF's Asset Management Division. "Our participants tell us that, after financial returns, social factors are very important in how they make their investment decisions. This department furthers our mission to meet the financial needs of the institutions and individuals we serve, and enables us to expand our offerings in this area."

Effective July 1, 2006, the department - which will report directly to the Chief Investment Officer -- will be headed by TIAA-CREF Managing Director Scott J. Budde and include Amy Muska O'Brien, TIAA-CREF's Director of Social Investing hired in 2005.

Scott Budde brings 12 years of investment experience at TIAA-CREF and 10 additional years experience in banking and financial services consulting to the new department. Budde currently serves on the Capital Markets Advisory Committee of the Grameen Foundation USA - a leading promoter of microfinance investing. He is a graduate of Bowdoin College and the School of International and Public Affairs at Columbia University.

Amy O'Brien brings over 10 years of social investment research experience with a strong focus on environmental issues. Before joining TIAA-CREF, she was the Director of Corporate Social Responsibility at the United Church of Christ Pension Fund. She is a graduate of Boston College and Rensselaer Polytechnic Institute. O'Brien recently joined the board of the Social Investment Forum - a national organization promoting the concept, practice and growth of socially responsible investing.

About TIAA-CREF
TIAA-CREF is a national financial services organization with more than $380 billion in combined assets under management (3/31/06) and the leading provider of retirement services in the academic, research, medical and cultural fields. Further information can be found at www.tiaa-cref.org.

About TIAA-CREF Social Choice
Initially developed in the 1980s, CREF Social Choice Account has grown into the world's largest social screened investment fund for individual investors with just over $8 billion in assets (03/31/06).

TIAA-CREF Individual & Institutional Services, LLC, and Teachers Personal Investors Services, Inc., distribute securities products

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This is another step forward for TIAA-CREF after years of lobbying, followed by resistance from TIAA-CREF for usually invalid reasons, and then their finally adopting our proposals. We applaud this move, but at this point, our long time push for community investment in their socially responsible fund continues to be rejected. Such investment belongs there, if anywhere, and for several reasons our "Make TIAA-CREF Ethical" coalition has elaborated.

After years of lobbying, TIAA-CREF also agreed a year ago to do shareholder advocacy on issues of social responsibility. We have argued for them to apply such influence to six target companies--including Wal-Mart, Coke, and Nike---which engage in egregious corporate behavior. We continue to wait for a decision on that after years of previous attempts for divestment.

Neil Wollman; Ph. D.; Senior Fellow, Peace Studies Institute; Professor of Psychology; Manchester College, North Manchester, IN 46962; njwollman@manchester.edu; 260-982-5346; fax 260-982-5043

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Chris O'Keefe was, in a former life, an IT manager in charge of customer relationship management implementations at TIAA-CREF, a prestigious financial institution that handles some of the nation's largest academic retirement funds.

OKeefe's story is a cautionary tale for anyone in IT—particularly anyone that handles sensitive customer data.

Well into his 13th year on the job at TIAA-CREF, one of O'Keefe's subordinates, a contractor named Sonia Radencovich, was recognized by a colleague as a felon who had helped her lover swindle more than $200 million from insurance firms.

She was scheduled for sentencing to federal prison several months into her job at TIAA-CREF.

But before Radencovich's true identity had been discovered—she had applied for the job at TIAA-CREF using the alias Sonia Howe—she'd had unfettered access to customer data for a couple of months.

And she brought her own laptop and a couple USB devices to work, which she used to download customer information (it's not clear how much information she downloaded).

"Sonia Howe had access that she needed to perform her job function—projects that had to do with the call center, systems our agents used when they answered the phone to identify customers when they call in," said O'Keefe, who was Radencovich's supervisor.

"By their nature she needed to test those things. It wasn't her access [in question]; it was that this data was unscrambled—all if it."

As the technical lead on two key ongoing initiatives at TIAA-CREF, Open Plan Solutions and Advice that Radencovich also worked on, O'Keefe was asked to help investigators determine how much information Radencovich had access to.

He did, and was fired in February 2005 for, he said, telling the truth: TIAA-CREF's IT test environment was unencrypted and Radencovich had access to a whole lot of data.

"I told [TIAA-CREF] she had access to a lot more information than they wanted to let out," said O'Keefe.

"TIAA-CREF said [Radencovich] had access to very little information—only 100 participants. The fact is, she walked away with a lot more data than that."

O'Keefe estimates that Radencovich had access to a good portion of, or even all of TIAA-CREF's 3.2 million customer records.

Shortly after he was terminated—for violating policies in his supervision of Radencovich, sharing passwords and allowing Radencovich to use her laptop at work—O'Keefe filed a Sarbanes-Oxley Whistleblower complaint with the Department of Labor, stating that he should have been protected for information revealed during the Radencovich investigation.

Last June, O'Keefe's initial complaint was dismissed on a technicality; the DOL determined he worked for TIAA and not TIAA-CREF.

"The whistleblower provisions of Sarbanes-Oxley did not cover TIAA because it is neither a company with a class of securities registered under Section 12 of the Securities Exchange Act of 1934 nor one that is required to file reports under Section 15(d) of the Exchange Act," according to a statement from TIAA-CREF. "The former employee is appealing this finding."

O'Keefe's appeal will be heard Aug. 14-18 by an Administrative Law judge, who will determine if O'Keefe is in fact an employee of TIAA-CREF, and whether he is protected under the SarbOx Whistleblower regulations.

The Sarbanes-Oxley Act prohibits employers with publicly traded stock from retaliating against employees who engage in protected activities—like providing information in relation to alleged accounting improprieties or participating in a proceeding related to alleged securities law violations.

However, early statistics show that most employers prevail in whistleblower cases, according to a report published by Alston, Bird LLP attorneys Robert Roirdan and Lisa Durham Taylor.

Between July 2002, when the act passed, and December 2003 OSHA (a division of the Department of Labor that oversees Sarbanes-Oxley) recorded 169 charges alleging retaliation.

OSHA found for the employer 77 of 79 cases in which it completed an investigation.

Of those 45, were appealed to an Administrative Law judge, and OSHA's determinations have been reversed only three times.

O'Keefe's attorney, Darryll Bolduc, principal of the Bolduc Law Firm, is seeking to prove two points: that there is a co-mingling of management between TIAA-CREF by showing that there is one IT organization and one financial organization that spans both entities; and that O'Keefe was engaged in a protected activity when he reported the issues with TIAA-CREF's testing environment.

"I am claiming that my client was terminated because of a cover up," said Bolduc, in Charlotte, N.C.

"He was a great employee, he won the Chairman's Award. TIAA-CREF made a mistake by not getting a proper background check," on Radencovich.

At least a year before the data theft, O'Keefe said he and several colleagues tried to bring the test environment issues to light at TIAA-CREF, to no avail.

"Many people brought this up, and I was one of then," said O'Keefe, who pointed the finger to the top of the IT org chart—the CTO—as the person who should set policy regarding test environments, "not a guy in charge of writing code."

After Radencovich was fired in November 2004, a lot changed, according to O'Keefe.

"Every new policy and procedure known to man came out as a result of this security breach," said O'Keefe. "So today employee data is scrambled. But customer data is not."

And the data that Radencovich downloaded to her laptop and, ostensibly, the USB devices? It's still out there, according to Bolduc.

TIAA-CREF filed a lawsuit to get access to Radencovich's laptop, but was never able to actually get its hands on the hard drive. The USB devices are nowhere to be found.

He pointed out the fact that customers' Social Security numbers and birth dates—information that Radencovich had access to—doesn't change.

She could, in all likelihood, serve her time in prison and sell the customer data when she gets out.

At $5 to $10 per customer name, according to Bolduc, "that's not a bad get out of jail free card."

But the bigger issue for IT managers is who is responsible in the case of employee malfeasance and identity theft. And are employees actually covered under the Sarbanes-Oxley Whistle Blower Act?

O'Keefe said he doesn't believe he should be held responsible for the actions of a contractor.

He said he did his job in hiring a qualified candidate (and that most consultants bring their own laptops to work).

"The resume Sonia Howe gave me, [the felony counts against her] wasn't on there. It had all this great technical skills on there," said O'Keefe.

"You stereotype what a criminal should look like—that didn't look like Sonia Howe. She looked normal. She's a mother with small kids. And she has great technical skills. I was actually thinking about hiring her permanently."

Check out eWEEK.com's IT Management Center for the latest news, reviews and analysis on IT management from CIOInsight.com.

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7 Apr 06 Update:

It's been over two months since the last update, mainly because little has happened. As you may remember, we met with several TC reps on February 2 in New York. Though the meeting was friendly and they seemed open, we got no real answers or assurances, and follow-