Ohio pension funds question divesting from cos. with Iran, Sudan
August 17, 2007 (COLUMBUS, Ohio) — Some of Ohio’s public pension funds are considering reneging on a June deal cut with House Speaker Jon Husted that required them to partially divest from companies with business ties to Iran and Sudan.
Husted, a Kettering Republican, brokered the deal in exchange for killing a bill that would have mandated 100 percent divestment by the retirement funds for 1.3 million police, firefighters, schoolteachers and other public employees.
The five funds and hundreds of public employees had criticized the bill, sponsored by freshmen Republican Reps. Josh Mandel and Shannon Jones, as an attempt to drag their investments into politics. Mandel, from Lyndhurst, is a Marine veteran who served in Iraq and has volunteered for a second tour of duty.
Now some of the funds are questioning their obligation to meet the terms of the deal while others are saying it required them only to study the prospects of divestment.
The terms of the agreement were that the pension systems would divest 50 percent of the money they have in Iran- and Sudan-tied companies by Dec. 31, said Husted’s spokeswoman Karen Tabor — and the speaker expects them to meet that target.
“The fact of the matter is honorable people keep their word,” she said. “We expect the pension systems to keep their word. Rep. Mandel is keeping his word to the American people by going back to Iraq for a second time.”
The State Teachers Retirement System at its Thursday meeting said it has hired an investment analyst and consulted the attorney general regarding its obligations to the Legislature and its members.
The Ohio Police & Fire Fund, meanwhile, will leave the decision up to its board, said executive director William Estabrook.
“They’re independent boards. They may have a totally different idea of what to do,” he said. “I don’t anticipate that this will go the same way for everybody.”
The Ohio Public Employees Retirement System, meanwhile, has been working with Husted’s office to ensure it interprets the language of the deal properly. PERS was a vocal critic of the divestment legislation.
Judy Stalter, a member of the retiree advocacy group Public Employee Retirees Inc., said the funds should be given “wiggle room” within the agreement in order to best serve their members.
“It should be their right to look at the investments and make sure their fiduciary responsibilities are not breached,” she said.
Thirteen countries or regions have been penalized after being accused by the U.S. of supporting terrorism, making human rights violations or other misbehavior. States have increasingly followed suit with similar state-level investment bans affecting countries including Iran, Sudan, Cuba and Libya.
(AP)