* I stopped tracking this bill at the end of session because I figured it would pass. Here’s the BGA…
Despite strong rhetoric from Gov. J.B. Pritzker and other top state officials demanding public pension funds divest more than $100 million in Russia-based assets, state lawmakers now say they won’t act until the Fall veto session.
A key legislative proposal to force the pullout in the wake of the Russian invasion of Ukraine died in a Senate committee awaiting a vote.
Senate President Don Harmon, D-Oak Park, declined to be interviewed for this report, but his staff suggested the Senate had too little time before the session closed on April 9. The House bill — which passed by a vote of 114-0 on April 5 — was never taken up in the Senate chamber.
Liz Mitchell, Harmon’s spokeswoman, said the plan is to review the measure and take it up when they return in the Fall veto session.
Critics say that’s too little, too late.
“When you have a supermajority in both chambers and a Democratic governor, it’s a massive failure,” said Rep. Jim Durkin, R-Western Springs, the House Minority Leader. “It’s the right thing to do at the right time, and they have failed to do anything. It’s embarrassing. We could have been a leader on this.”
Durkin’s GOP divestment bill never made it out of committee.
In a written statement to the Better Government Association, Harmon promised action in retaliation for the Russian invasion that began on Feb. 24. He did not address the delay. […]
According to a review of pension audit reports for nine of the major public pension funds — including five in the City of Chicago and three state pension funds — a combined total of nearly $112 million was invested in Russian equities, bonds and other assets at the start of the invasion. […]
The Teachers’ Retirement System, the biggest fund in Illinois that represents teachers outside Chicago Public Schools, identified close to $59 million in assets in its portfolio.
TRS spokesman Dave Urbanek put the battle between fiscal responsibility and morality surrounding the issue into perspective.
“Letting go of an investment that’s making money, there’s a risk to that,” Urbanek said. “But you don’t want to be profiting off a war.”
Urbanek described the fund as waiting for direction from the state to act, similar to others.
- SomeGuy - Thursday, May 5, 22 @ 9:42 am:
They definitely dropped the ball on this, but can’t the fund managers voluntarily divest these funds? Do they need the state to tell them they are required to do so?
- well... - Thursday, May 5, 22 @ 9:44 am:
==Senate President Don Harmon, D-Oak Park, declined to be interviewed for this report, but his staff suggested the Senate had too little time before the session closed on April 9.==
Durkin dropped his bill in February. How is that not enough time?
- Google Is Your Friend - Thursday, May 5, 22 @ 9:45 am:
==But you don’t want to be profiting off a war.”==
Do the pension funds have any investments in weapons manufacturers or ‘defense’ companies?
- Annonin' - Thursday, May 5, 22 @ 9:52 am:
Maybe Durkie could call Urbanek and/or TRS and tell them to start sellin’ Seems fairly simple. Don’t think they need a bill to dump stuff.
- H-W - Thursday, May 5, 22 @ 9:55 am:
Should these specific investment funds lose money over the coming months due to international retaliation against the Russian economy, the Fall Veto Session may become ugly (and should in any case).
- well... - Thursday, May 5, 22 @ 9:56 am:
==Maybe Durkie could call Urbanek and/or TRS and tell them to start sellin’ Seems fairly simple. Don’t think they need a bill to dump stuff.==
Or maybe the Governor, who appoints the majority of their trustees, could do so?
- Rich Miller - Thursday, May 5, 22 @ 9:59 am:
===Or maybe the Governor===
He did.
Didn’t do much good. The state needed a law to force the issue.
- Retired SURS Employee - Thursday, May 5, 22 @ 10:04 am:
The problem with voluntary disinvestment is the fund’s fiduciary obligation to it’s members. Legislation solves that problem.
- Inverted Pyramid - Thursday, May 5, 22 @ 10:06 am:
Also a failure in that this was a bill which the House sponsor genuinely listened to GOP concerns, as was stated during debate, and changed the bill through multiple amendments. The vote wasn’t just bipartisan, the work on it was actually bipartisan, they way it should be on an important issue such as this.
- DuPage - Thursday, May 5, 22 @ 10:43 am:
I am surprised any investments they have in Russia have not lost most of their value. What exact stocks do the pension systems own?
- Annonin' - Thursday, May 5, 22 @ 10:43 am:
Hiding behind “fiduciary obligation” is really jive. But it does appear the TRS has learned little from the days of letting Stu Levine run wild…Hmm
- MisterJayEm - Thursday, May 5, 22 @ 11:21 am:
“I am surprised any investments they have in Russia have not lost most of their value. What exact stocks do the pension systems own?”
I suspect that bonds may be a bigger issue than stocks.
The US Treasury’s Office of Foreign Assets Control may soon force Russia to default on its bonds because a Treasury exemption that has been allowing payments to get through is due to end on May 25.
Moscow’s next payment is due May 27.
If Russia fails to make payments to bondholders, Moscow could be locked out of international markets for years. (Emphasis on “could” btw)
Plus and the US could also block American banks from processing payments altogether.
https://markets.businessinsider.com/news/bonds/russia-debt-default-still-possible-us-treasury-ofac-bonds-sanctions-2022-5
If I were a US investor in Russian assets, I think I’d dump them for pennies-on-the-dollar today rather than holding ashes and dust in a few months.
But I’m a simple, conservative index fund investor, so whatta I know.
– MrJM
- H-W - Thursday, May 5, 22 @ 11:57 am:
= If I were a US investor in Russian assets, I think I’d dump them for pennies-on-the-dollar today rather than holding ashes and dust in a few months. =
This is my thinking too. I cannot imagine any current investments in the Russian economy, under any circumstance, generating profits over the next several years. I can however (and do) anticipate substantial losses.
- Retired SURS Emloyee - Thursday, May 5, 22 @ 1:32 pm:
–Hiding behind “fiduciary obligation” is really jive.–
Nope. There are plenty examples of fiduciary violation lawsuits these days.
- NonAFSCMEStateEmployeeFromChatham - Thursday, May 5, 22 @ 1:36 pm:
Looked like Harmon fumbled this one on the 1 yard line.
- Shytown - Thursday, May 5, 22 @ 3:14 pm:
Should we be profiting off an unprovoked war? No. There’s your perspective. Get it together in the legislature.