PERSI offers anti-Sudan investments

BOISE – Idaho’s state retirement fund is taking a small step toward offering its members investments that don’t support genocide in Sudan’s Darfur region, but a coalition of church, human rights and community groups say the state’s large public retirement fund also should drop such investments – a step 20 other states have taken.

Alan Winkle, executive director of the Public Employee Retirement System of Idaho, said PERSI had “very definitely” heard from its members that they wanted a Sudan-free investment option. So PERSI is setting up a new 401(k) plan option for those state and local government workers who have 401(k) accounts in addition to their state retirement pension funds. The new option will be available to members Oct. 12.

“We commend PERSI for taking the first step to acknowledging the problem,” said Lauren McLean of Trillium Asset Management, a member of the Idaho Sudan Divestment Task Force. “We believe all beneficiaries should be protected from these offending companies, but PERSI feels it cannot do any more until the Legislature directs them to divest.”

Last year, backers of divestment from companies doing business with the Sudanese government pressed the Idaho Legislature to require PERSI to withdraw from those investments, but a Senate committee declined to introduce the bill, referring the matter instead to the PERSI board.

After a six-month study, Winkle said the PERSI board concluded it couldn’t make any such changes in its investments without legislative direction. “The board concluded that divestment … simply was not in the best interest of the beneficiaries of the fund – that’s our fiduciary responsibility; that’s what we have to go by,” Winkle said.

Since January, 13 states have passed model legislation to divest their state retirement funds of the controversial investments. Seven more states pulled out of the investments without passing new legislation, bringing the total number of states withdrawing such investments to 20. Those states include Oregon, California and Colorado.

An Idaho task force that includes the Catholic Diocese of Idaho, the Interfaith Alliance, the Idaho Human Rights Education Center and more are proposing that same model legislation for adoption by Idaho’s Legislature in its 2008 session.

The model legislation’s high-profile backers nationwide include California Gov. Arnold Schwarzenegger and U.S. Sen. Sam Brownback, R-Kansas.

McLean said several major international companies, including Siemens and Rolls Royce, have stopped doing business with the Sudanese government in response to the moves by state retirement funds.

Winkle said as of July, Idaho’s $11.5 billion state retirement fund had about $25.7 million invested in companies that are on the task force’s list of those providing economic or military support to the government of Sudan, which has been fostering extensive genocide in its Darfur region. Those investments are part of PERSI’s $861 million “emerging market portfolio,” Winkle said, which last year showed a 45 percent return on investment. That portfolio makes up 7.4 percent of PERSI’s investments.

“We know there would be an impact” if those investments were dropped, Winkle said.

But John Sullivan, chairman of the Idaho Sudan Divestment Task Force, said PERSI could shift out of its Sudan investments without costing its members any money. “It is simply a matter of reinvesting over a period of time into other companies,” he said.

PERSI has 118,000 members.