Question of the day
Monday, Mar 7, 2022 - Posted by Rich Miller
* Press release…
Standing with the people of Ukraine against the brutal assault on their nation and their democracy, the state’s largest union of public service workers is calling on public pension funds to take appropriate steps to divest all assets linked to Russia.
The American Federation of State, County and Municipal Employees (AFSCME) Council 31 has sent letters today to the Illinois State Board of Investment, which governs investment policy for the State Employees’ Retirement System, as well as to other public pension funds in Illinois in which AFSCME members participate.
“AFSCME strongly condemns Putin’s shameful assault on the nation of Ukraine. Each of us must do our part to support the valiant resistance of the Ukrainian people in their struggle to protect their democracy,” Council 31 Executive Director Roberta Lynch said, calling for the prudent divestment of pension fund assets with ties to Russia.
“This is truly a global emergency,” Lynch said, “that compels all freedom-loving people of conscience to take urgent action to support the people of Ukraine.”
Gov. Pritzker has called on state pension funds to explore divestiture.
* Press release from late last month…
While Russian troops move into Ukraine, an act of war the likes of which has not been seen in Europe since 1939, House Republican Leader Jim Durkin will introduce legislation to send a message to the Ukrainian people that Illinois supports them and will not do business with these vicious warmongers.
“This morning, we woke up to shocking images crossing our TV screens. People in cities throughout Ukraine huddled in subways and shelters while explosions shake their cities as Russian soldiers begin an invasion of their homeland,” said Durkin. “Today, we must send a strong signal to these people that we stand with them and support their sovereignty – that the State of Illinois is prepared to do what we can to help.”
Durkin’s legislation would require Illinois to divest of any pension funds in Russian companies and prohibit the state’s treasury from holding any Russian assets.
“Too often partisanship dominates our efforts in the General Assembly, but this is an opportunity for us to stand up as a bipartisan body and do what is right to support the Ukrainian people in the face of unimaginable hardship. I look forward to working with my colleagues on both sides of the aisle to get this done.”
The bill is HB4872, as amended. The bill is currently sitting in the Rules Committee.
* The Question: Should Illinois add “companies domiciled in Russia” to transactions already prohibited by state retirement systems (companies that boycott Israel, for-profit companies that contract to shelter migrant children, Iran-restricted companies, Sudan-restricted companies, and expatriated entities)? Explain.
- Candy Dogood - Monday, Mar 7, 22 @ 2:26 pm:
===Should Illinois add “companies domiciled in Russia”===
Yes. Legislation can always be revised at a later date. At this time Russia is a country whose economy is controlled and managed by kleptocratic public officials and their friends. They have extracted billions in wealth from the Russian people for their own uses and stole private companies from the individuals that founded them in the first place. Investment in Russia is not a safe, sound, or piratical investment in addition to not being ethical or moral at this time.
Any assets or funds that are already a part of the Russian economy have likely already collapsed in value.
- Captain Obvious - Monday, Mar 7, 22 @ 2:35 pm:
Yes, even though the effect of this bill will be more long term and punitive after the fact as opposed to an immediate preventive effect. Unfortunately, the policies that could have an immediate effect on Russia’s war machine are not being considered, but punishing Russia in the aftermath is at least something, small comfort to Ukrainians though it will be.
- Cool Papa Bell - Monday, Mar 7, 22 @ 2:38 pm:
No - Although I’m pretty sure this will pass and I understand why.
But No - we need to maximize pension returns and the world of finance and making money is so murky and miserable that this is window dressing and virtue signaling. The Uighur’s in China count too and Illinois isn’t rushing to divest of Chinese companies or those that profit off the backs of enslaved people.
Terrible people run business in Russia and terrible people run businesses elsewhere too.
- City Zen - Monday, Mar 7, 22 @ 2:44 pm:
Have the pension systems sold off their Russian rubles yet? If not, wait it out.
- walker - Monday, Mar 7, 22 @ 2:49 pm:
Buy high, sell low, but make a statement that won’t help Ukraine.
- Arsenal - Monday, Mar 7, 22 @ 2:54 pm:
I say yes, bc looking at the Russian economy right now, I don’t think they’re very safe investments.
- Lurker - Monday, Mar 7, 22 @ 2:54 pm:
Yes.
I’m not sure how to explain other than Russia is engaging in criminal acts and we are not doing enough. Withdraw all monies and full boycott on all their energy resources.
- Anon221 - Monday, Mar 7, 22 @ 3:00 pm:
Some digging and connecting dots might be needed to truly get the big picture of companies that might be doing business with Russia. Several of the largest industrial wind and solar LLC companies in the US and in Illinois are owned by foreign “parents”. One, Enel, has some very close ties to Russia based on a Bloomberg report.
“Italy, which had been cautious on the toughest measures in response to the attacks, already has significant Russian commercial ties, with trade between the countries worth more than 21 billion euros last year, according to Italy’s trade agency. The country also imports about 45% of its gas consumption from Russia, one of the highest shares in the European Union.
The talks in the week beginning Feb. 14 came after a group of Italian business leaders attended a meeting with Russian President Vladimir Putin at the end of January, despite a request from Draghi’s office that it be canceled due to the geopolitical situation. Among attendees was Enel Chief Executive Officer Francesco Starace, who is also the brother of Italy’s ambassador to Moscow.”
https://www.bnnbloomberg.ca/italy-sought-russian-deals-shortly-before-putin-invaded-ukraine-1.1729168
- Three Dimensional Checkers - Monday, Mar 7, 22 @ 3:08 pm:
===At this time Russia is a country whose economy is controlled and managed by kleptocratic public officials and their friends. They have extracted billions in wealth from the Russian people for their own uses and stole private companies from the individuals that founded them in the first place. Investment in Russia is not a safe, sound, or piratical investment in addition to not being ethical or moral at this time.===
This has been true since the fall of the USSR. Wall street banks, white shoe international law firms, and a host of white collar hypocrites all made tons of money off of Russia’s kleptocracy. Their ethics have not suddenly changed overnight.
I would support the bill, but I am increasingly skeptical that sanctions do much more than sooth the US public and hurt common folk in Russia. I really do not know if Putin even view them as a negative consequence of his actions.
- The Dude - Monday, Mar 7, 22 @ 3:32 pm:
No, a free market should be allowed to operate freely.
If the market is free then nobody with any brains would want to do business with these companies anyway.
- Mason born - Monday, Mar 7, 22 @ 3:59 pm:
Yes, though in truth I don’t think it should be needed. As long as Putin holds power I’m not sure you could view Russia as any kind of safe investment. If Putin fell back tomorrow I fail to see how you could trust we wouldn’t repeat this the next hard freeze that lets his armored div move cross country. As long as Putin is there it’s a very risky bet.
- Sue - Monday, Mar 7, 22 @ 4:09 pm:
Assuming any of the State’s pension managers still own Russian securities- there is no way to exit those positions. Hopefully they are minor investments as you likely are looking at total losses. Better question would be why they weren’t sold before the invasion as the valuations had already been dropping as Putin was threatening an invasion massing forces on the boarder. Russia’s securities markets have been closed for 10 days and may not reopen for god knows how long
- Proud Papa Bear - Monday, Mar 7, 22 @ 4:14 pm:
“If the market is free”
It is not a free market.
Capitalize the profits, socialize the losses.
- Nearly Normal - Monday, Mar 7, 22 @ 4:20 pm:
FYI on TRS –
At the Teachers’ Retirement System of Illinois, allocations to Russian securities occupy less than 1 percent of the fund’s total portfolio — approximately $246 million of the fund’s $65 billion in assets.
“Any commitments we make to Russian firms are part of our international equity portfolio,” Dave Urbanek, TRS Illinois’ public information officer, told II. “And it just so happens that — and I’m sure that other pension funds find the same thing — the best opportunities are elsewhere.”
https://www.institutionalinvestor.com/article/b1wz4ylj4lt7cn/Asset-Owners-Move-to-Divest-From-Russia-After-Ukraine-Invasion#:~:text=Russia%20public%20equity%20comprises%200.3,fund’s%20%2465%20billion%20in%20assets.
- Dspuds - Tuesday, Mar 8, 22 @ 7:55 am:
I’m not willing to play politics with our pension funds. Do what’s best for our funds. Whatever that might be.