State to study investments

The state treasurer wants to ensure that the money doesn’t support terrorists.
Friday, July 22, 2005 | 12:00 a.m. CDT; updated 9:36 p.m. CDT, Monday, July 21, 2008

ST. LOUIS — After considerable debate, the board of trustees for the Missouri State Employees’ Retirement System unanimously voted on Thursday to adopt an amendment requiring investments to be screened for terrorist connections.

More than 94,000 members of the Missouri State Employees’ Retirement System depend on the board to invest nearly $6 billion used for retirement, life insurance and long-term disability.

“I would rather err and not invest in questionable companies because this is not about getting the highest return,” state Sen. Jason Crowell, R-Cape Girardeau, said during a presentation of the anti-terrorism policy report Thursday.

It is illegal in the U.S. to invest in Iran, Libya, North Korea, Sudan and Syria. Foreign companies, however, are sometimes involved with the governments of these countries.

The board’s decision creates a system to check biennially for investments in foreign companies that are currently doing business with the black-listed countries.

Questions about the security of MOSERS direct investments in foreign companies were raised in June when State Treasurer Sarah Steelman made a motion for the board to withdraw MOSERS’ investments from Arab Bank. The board failed to adopt the motion after a 5-5 vote.

“The U.S. Government has sanctioned Arab Bank,” Steelman said. “They are the bank that families of suicide bombers go to to get their payments.”

On Thursday, Steelman attempted to make another motion to divest $80,000 invested in Arab Bank. Board members reminded Steelman there was only one item for action on the agenda, and that was the decision on the subcommittee’s findings. Steelman handed down her own proposal to the board, which gave the option for an independent screening agency to be hired to look for their own red-flagged companies.

State Rep. Todd Smith, R-Sedalia, said he was suspicious of using these outside screening companies.

“For one, we don’t know how they develop their lists,” he said.

He was concerned that divesting from companies without direction from the federal government could actually prove counterproductive to U.S. foreign policy and the best interests of troubled states.

In the end, a combination of Steelman’s and Smith’s proposals was used as an effective compromise to change the policy.

The policy calls for more research to determine the most effective screening process the board could use.

After questionable investments have been identified, it would be up to the board whether or not to divest.

State Rep. Bill Deeken, R-Jefferson City, cautioned that the MOSERS board is not qualified to make decisions regarding foreign policy or profitable investment.

Despite his concerns, Deeken said he feels good about the amendment passed today.

The previous policy for screening called for employees to annually check a list of sanctioned companies provided by the government.

Steelman said the list does not exist, and that’s why she proposed the use of an external agency that specialized in screening for terrorist ties.

Other states such as Illinois, Louisiana, New Jersey and New York have taken steps in protecting their investments from contributing to terrorism.

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