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Last Updated: March 15, 2008 - 3:24 PM
Blood Pensions
By Dave Maass
Published: October 17, 2007
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Government retirement fund linked to Darfur.
The New Mexico Public Employees Retirement Association’s asset report is a 641-page tome, detailing investments from AETNA corporate bonds to Weight Watchers stock.
Source: PERA Asset Report, Aug 31, 2007 |
Not all the investments made with the 72,000 government employees’ pension pay-ins are quite so healthy. PERA invests in 16 companies with potential ties to the Darfur conflict in Sudan, seven of which are listed as “highest offenders” by the Sudan Divestment Task Force, a project of the Genocide Intervention Network. The rest have responded to divestment threats and engaged in dialogue with human rights organizations.
Last week, SFR reported that Santa Fe-based Thornburg Investment Management has nearly $800 million invested in Sinopec Corp., a subsidiary of Sinopec Group, which provides oil services to the Sudanese government [Outtakes, Oct. 10: “Thorny Funds”]. While it is an oil-rich nation, Sudan does not have the resources or expertise to drill for oil and refine it. Instead, it relies on foreign companies, such as China’s Sinopec, and shares the profits. The Task Force alleges that these profits fund military operations that have left as many as 400,000 people dead and 2 million displaced.
In addition to Sinopec Corp, PERA also invests in Petrochina, which, according to the Task Force, is the largest player in the Sudan oil industry and directly complicit in human rights abuses. According to PERA’s Aug. 31 report, the seven “highest offender” investments are worth a total of $28.3 million, representing approximately 2 percent of the $13 billion fund. It produced a profit of more than $10.7 million.
When informed of the investments by SFR, union leaders were appalled. Leading up to the Sept. 27 PERA board election, AFSCME opponents had speculated that, if elected, union-backed candidates would pursue a “social agenda” by steering investments toward unionized companies. New Mexico AFSCME Council 18 Executive Director Lawrence Rodriguez disputed that claim, but says Sudan divestment is a social agenda the union may pursue.
“I have 22 years of PERA investment in there myself,” Rodriguez says. “I believe it would probably concern just about any other PERA contributor.”
Robin Gould, president of New Mexico’s second largest government-employee union, Communications Workers of America, says she may initiate a letter-writing campaign.
“The state should not do business with those companies,” Gould says. “It’s not like it’s a huge part of the portfolio, but it’s very important to those folks who have been following what’s going on in Darfur.”
According to PERA Executive Director Terry Slattery, divestment will require legislative action. PERA’s investment policy is dictated by the profit-first guidelines in the Uniform Prudent Investor Act, he says.
“If someone determined that we took a loss because of it, the membership could sue us,” Slattery says. “We need to make investments that are best for our fund and have an acceptable level of risk. That’s our criteria and we need to stick to that and not deviate at this point in time.”
This puts the ball in Gov. Bill Richardson’s court, since he will determine the 2008 legislative agenda. To date, 20 states, including Texas, California, Florida and New York, have implemented divestment schemes.
In April, Richardson stated that the US should engage Sudan’s economic partners, including China. However, SFR has repeatedly called both Richardson’s gubernatorial and presidential campaign offices to clarify his position on state divestment.
The only response comes via e-mail from the governor’s deputy communications director, Allan Oliver: “It’s simply too early to say what will be on the agenda for the next legislative session.”
© Copyright 2000-2008 by the Santa Fe Reporter
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