Two of the country’s largest pension funds are breathing a sigh of relief, now that a proposal that would have put a crimp in their private equity investing has been terminated, for now. It appears that the word is mightier than the legislative muscle, as California Gov. Arnold Schwarzenegger penned a piece in the Los Angeles Times criticizing AB 1967, the bill introduced by state Assemblyman Alberto Torrico, a Democrat from Newark, Calif. The proposal would have barred the California Public Employees' Retirement System and the California State Teachers' Retirement System from putting money in firms that have investors from countries with human-rights issues. One of the firms at which the bill was aimed reportedly was The Carlyle Group, which is part owned by the United Arab Emirates. The pension plans said barring them from investing in Carlyle would cost their members millions in lost opportunity, and the governator agreed. He wrote that AB 1967 is “an ineffective way to demonstrate California’s concern. It would lead to the kind of change its proponents hope for – and it would cause a deep wound to our retirement funds and government programs when we can least afford it.” It wasn’t long after that Torrico announced he was withdrawing the bill for now. “This delay will give us time to properly address some of the concerns that have been raised,” the assemblyman stated in a release.