Could supporters of Treasurer Tim Cahill help me figure this one out. Last month Cahill appears at a press conference with former Israeli prime minister Benjamin Netanyahu to talk about having the state pension fund divest from companies that are doing business with Iran (see TIME 2/7/07). In the TIME article he is quoted as saying “I’m generally opposed to bringing politics into investing, but former prime minister Netanyahu gave an impassioned plea as to how divestiture could be successful and why it is important, not only to the Middle East but to the entire world”. While I don’t disagree that we should talk about Iran, what about Darfur Tim? Last year a bill that called for the state pension fund to divestment from Darfur died in the Legislature and it’s widely believed that Cahill helped kill the bill by sitting on the sidelines. Has Cahill not been reading the newspapers about the crisis in Darfur? Does he not know that 400,000 people have been killed and more than two million displaced since 2003 because of the Sundanesse Governments genocide? And if this doesn’t move him, does he at least know that this Sudan is a country that harbored Bin Laden and has been a base for terrorist training camps? Does he really think that public employees want their retirement money being used to invest in companies that are helping to support a rogue government that supports terrorists and is committing genocide? If he is ready to start talking about divestment, why is he not talking about Sudan?
Don’t get me wrong, I really like the guy! I think that Cahill is a smart, savy leader who has done a good job as Treasurer and would be a great candidate for Senator someday. But he is clearly getting some bad advice if he is mugging for the cameras with Netanyaho and talking about divesting from Iran while ignoring the horrible crisis in Darfur. Can someone explain this to me?
Anti-Israel groups (like the MA Green Party) have also called for Cahill to divest from Israel itself. I’m sure there are also anti-China investment people (Fulan Gong?), those who oppose investment in “communist” Vietnam, anti-tobacco company people, anti-oil company people, and on and on.
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Personally, I would like to see the state stop investing in lots of things (pharmaceutical companies, alcohol companies, fast food companies, car companies, etc, etc).
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However, I hope this just goes to show that political meddling in the pension system (which must make a profit above all else or we taxpayers will be doomed) should be very, very limited. Most importantly, I believe any divestiture decision should be made carefully and in a limited way by the Legislature (and the Governor) but not by the State Treasurer.
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That being said, I do agree that Cahill is making a mistake in taking on this Iran issue so publicly (after much pressure from Romney and others). I just don’t think it means he should be getting involved with the Darfur campaign though.
Byron Rushing filed a bill to prohibit investment in Myanamar. It was found to be illegal. Rushing argued it himself in front of the Supreme court of the United States, and the court said that STATES cannot make foreign policy, only the US government can.
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This decision would seem to preclude legislative action on this issue (btw – I think it was Rushing who turned right around and filed the Sudan bill you mention dying, and it died because of that Corut ruling. $8,000 down the drain as far as I’m concerned).
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BUT – the TREASURER can control where he makes investments. He has a responsibility to maximize return, however. Is it possible that Iran has lousy RoR, while China has a good one? (I agree that getting investments mixed up in politics is dumb for this reason).
The Rushing bill was a limit on state contractors doing business with or in Myanmar. It was struck down in a “narrow” decision under the pre-emption doctrine which states that federal law always takes precedence over directly conflicting state laws. The Supreme Court found that the law effectively undermined the detailed federal Burma policy.
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However, I do not believe that this decision (which focuses a lot on the prohibitions on private conduct) would or should limit divestment of pension plan funds from certain countries.
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An indication is the many other states with laws limiting pension investment and those many new laws (California, Illinois, etc) already enacted against pension investment in Sudan/Darfur.
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Massachusetts, for its part, still has several laws on the books limiting pension investment (Chapter 32, Section 23), including limits on investment in companies doing business in South Africa and Northern Ireland. They even slipped in the law banning new investment in tobacco companies in that section.
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These laws exist and stand as models for future state legislation on pension divestment. Indeed, Rushing has filed a divestiture bill (House 2929) which would do just that for companies doing business in or with Myanmar.
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In any event, I think you are wrong about the Legislature’s powers in this area.
…but the Court case gets cited as at least an excuse for inaction on these bills, if not a reason. Bet this other one dies, too.
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Cahill, on the other hand, DOES have the power of unilateral action.