Wednesday, January 9, 2008

Divesting State Funds From Terrorist Supporters

An estimated $10 billion of Pennsylvania pension funds are invested in companies that do business in states sponsoring terrorists. While three bills in the state legislature aim to require divestment, the state treasurer says it's not an easy task.
The money comes from the State Employees and Public Schools Retirement Systems (SERS and PSRS), which are controlled by their individual boards and the state treasury. Treasurer Robin Weissmann says it's their job to make the funds as profitable as possible, and divestment could jeopardize their success.
Pressure is coming at the national level as well. President Bush signed the Sudan Accountability and Divestment Act on Dec. 31, 2007, encouraging public pension funds to sell stocks in companies working in Sudan. North Korea, Iran, Syria, and Cuba are other nations named as terrorist supporters. State legislation would mandate the withdrawal of funds from companies in all of those countries.
Weissmann says it's understandable that citizens don't want their state investing money that could end up aiding groups like Al-Qaeda, but it's very difficult to determine just what companies are actually helping terrorists with their business. She says it could depend on what kind of business they conduct. Dealings in firearms, construction, or other military equipment would be more likely to aid terrorist groups, while other companies deal with food supplies and medical relief.
The treasury is reviewing it's policies, including its financial asset management, and Weissmann says she expects to have addendum within the next few months that will take more factors into account than bare profit for the funds.
22 other states, 54 universities, and 11 major cities, including Pittsburgh, have all divested from the Sudan.

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