Bill would end Wisconsin investment in companies in Sudan
(Published Thursday, February 22, 2007 11:03:39 AM CST)
A d v e r t i s e m e n t
By Todd Richmond Associated Press
MADISON, Wis. - Wisconsin would rid its pension fund of investments in foreign companies working with Sudan under a bill legislators introduced Wednesday to help end violence in Darfur.
The measure reflects a growing movement among states to divest from Sudan as ethnic violence in the east African nation continues. California, Connecticut, Illinois and Maine have passed similar legislation, according to the National Conference of State Legislatures.
But Wisconsin investment officials fear the measure could be illegal - money in the pension fund belongs to beneficiaries, not the state, they say - and might cost the state millions of dollars.
"This is a really laudable cause, but the wrong solution because it uses someone else's money to attempt to promote a political agenda," said David Mills, executive director of the state Investment Board, which manages the $90 billion retirement fund for state workers.
Ethnic violence has killed at least 200,000 people in Darfur, a heavily Muslim area in western Sudan, and left 2.5 million refugees since 2003.
Wisconsin's bill was crafted by the Darfur Action Coalition of Wisconsin, a group of organizations concerned about human rights in Africa, and the Sudan Divestment Task Force, a Washington, D.C.-based group that's been pushing Sudanese divestment legislation around the nation.
"Our obligation as a country is to do something," said Sachin Chheda, coordinator of the Darfur Action Coalition of Wisconsin.
State Sen. Sheila Harsdorf, R-River Falls, the bill's sponsor in the Senate, likened the fighting in Darfur to the Holocaust. Wisconsin has a moral responsibility to divest from companies that do business with Sudan, she said.
"Once again, the international community has failed to take action to stop genocide," she said at a news conference, flanked by students from the University of Wisconsin-Madison, UW-Milwaukee and Marquette University dressed in T-shirts that read "Stop Genocide in Sudan."
"We can set an example that we do not need to profit from foreign companies that fund genocide," she said.
American companies are already prohibited from doing business in Sudan. Under the bill, Wisconsin would sell its investments in a foreign business that supplies or provides services to the Sudanese government if:
- more than 10 percent of the company's revenues in Sudan are connected to oil, mining or power production.
- the company is complicit in genocide in Darfur.
- the company supplies military equipment to Sudan.
The measure would require the investment board to sell about $100 million in investments in about two dozen companies, Harsdorf said.
But Mills said state law forbids money in the pension fund to be used for political or social causes.
"These are not state dollars," he said. "These are dollars held in trust for public employees."
Sale of the investments also would generate hundreds of thousands of dollars in new transaction and management fees, Mills said.
The bill calls for the board to cease divestment when the transactions' cost reaches $440 million, which it estimates could happen in two to three years, he said. If investments don't cover that $440 million, taxpayers might have to make it up, he said.
Rep. Fred Kessler, D-Milwaukee, the bill's chief sponsor in the state Assembly, called Mills' predictions "pretty speculative."
"We're pulling out of company A and there's another company B over there," he said. "The money is still going to continue to be invested."
Spokespeople for Assembly Speaker Mike Huebsch, R-West Salem, and Senate Majority Leader Judy Robson, D-Beloit, declined immediate comment, saying they weren't familiar with the bill.
