Massachusetts lawmakers made an international statement last week when they suggested banning the state pension board from investing in companies conducting business in conflict-ridden Sudan.
An estimated 400,000 civilians in Sudan have been killed since February 2003, when a government-sponsored militia, the Janjaweed, began massacring civilians in the Darfur region, which the government deemed disloyal to Sudan, according to the Save Darfur Coalition.
Massachusetts is following the lead of New Jersey and Illinois, two other states that have already passed legislation to divest money in Sudan after President George W. Bush labeled the atrocities in Sudan as genocide. Harvard University, Stanford University and Dartmouth College have all taken steps to divest in companies doing business in Sudan.
The bill, written by Sen. Andrea Nuciforo, Jr. (D-North Adams), is designed to draw attention to the crisis and sever business ties that might assist the Sudanese government in funding the genocide.
“The ongoing genocide in Sudan is a humanitarian crisis that has affected millions of people,” Nuciforo said in a press release. “One way in which the Commonwealth can have an impact is to ensure that state pension funds are not contributing, in any way, to this tragedy.”
The bill calls for the state pension board to sell any stocks or securities of companies that are engaged in business with the Sudanese government. The Pension Reserves Investment Management Board, or PRIM, which is a pooled investment fund of the assets of retired teachers and retired state employees, is responsible for trying to maximize the return on their investments to provide the highest possible pension.
According to Andrew Schuyler, Nucifro’s chief of staff, the senator wants to ensure that the pensions of state employees will be protected but feels that Massachusetts has a moral obligation to shun the genocide.
“The senator wants to ensure that state employees would like to see their investments working financially and also in a way that represents our values,” Schuyler said.
Of the $39 billion in total assets held by the state pension board, an estimated $1.4 billion is invested in 83 companies that do business with Sudan, according to Sen. Edward Augustus, Jr. (D-Worcester).
Augustus said he believed the divestment plans would not hinder the board’s responsibilities and might even create greater economic opportunities.
“We would just invest the money in other companies that could have even greater a return or better that wouldn’t be associated with the brutal atrocities in Sudan,” Augustus said.
Augustus added that there is a limited precedent for states to take action in a matter of international concern, but the severity of the situation in Sudan calls for special action.
“I think President Bush has been very slow to act, and quite frankly, we’ve all been slow to act,” he said. “We need to have more of a sense of urgency given the information available about Sudan.”
Michael Travaglini, executive director of the PRIM Board, spoke against the bill at a public hearing, saying the legislation would strongly inhibit the board’s effectiveness.
“We weren’t making a political comment on the situation in Sudan, but whenever these bills are supposed to cut business, we’re consistently against it because that limits us in what we can do,” Travaglini told The Daily Free Press.
According to the legislation, the state treasurer is responsible for determining whether a company engages in business in Sudan. But Travaglini said there is no clear way to make that distinction.
“That’s really the 64,000-dollar question,” Travaglini said. “These aren’t companies that exist just to help Sudan. These are countries that sell goods and services to everybody, and Sudan just happens to be a buyer of it.”
The bill calls for a gradual divestment of the retirement system’s assets in marked companies but requires that all of the assets be removed within one year. If the state treasurer determines that a company has ended business operations with Sudan, the board is allowed to reinvest with that company.
Instead of withdrawing money from the companies, Travaglini suggested the state should maintain its investments and appeal directly to the companies to change.
“As an owner of a stock, we should use our power to go to the company and tell them to stop dealing in Sudan,” Travaglini said.
Schuyler credited Travaglini with identifying possible solutions, but he said Massachusetts does not hold enough shares in these companies to wield the necessary power to convince companies to change their policies.
David Rubenstein, coordinator of the Save Darfur Coalition — an alliance of 140 humanitarian and human rights groups — hailed the bill, saying Americans have a heightened awareness of the genocide.
Reached by email, Rubenstein said that “Americans are unwilling to accept genocide and unwilling to fund those who make it possible by investing in the infrastructure and commerce of the dictators and tyrants running Sudan.”