The Flathead Valley’s Leading Independent Journal of Observation, Analysis, & Opinion

3 April 2009

Sudan divestment legislation — on to the 62nd legislature

HB-619, Mike Jopek’s Sudan Divestment Act, died in the appropriations committee last week. There is no possibility of resurrecting it this session.

What defeated HB-619? Fundamentally, not enough support. Until Sudan divestment is supported by a wider variety of people — churches, civic clubs, elected and appointed officials at all levels of government, experts in finance, retired military officers — the initiative will not get out of committee.

Nevertheless, HB-619 was a good start, building on similar legislation introduced by Dan Weinberg in 2007, and providing the foundation for a more broadly based effort in two years. I’m going to help Josh Schott, Rep. Jopek, and all of the others who worked so hard and well on the bill this session, keep the issue alive for 2011.

 

13 March 2009

HB-619, the Sudan divestment act, tabled in committee — UPDATED

HB-619 was tabled in the house appropriations committee on 11 March, the day of the hearing. All of the committee’s Republicans (William Glaser, Ray Hawk, Roy Hollandsworth, Llew Jones, Dave Kasten, Walter McNutt, Penny Morgan, Bill Nooney, Don Roberts, Duane Ankney) voted to table the bill. They were joined by Democrats Dennis Getz, Bill McChesney, and Robert Mehlhoff.

The State of Montana remains free to invest its money in blood soaked bonds. This is not a surprise, but it is shameful. And I want to emphasize that although this is the result of tabling the bill, I doubt it was the objective of those voting to table. Some of the opposition to HB-619’s fetters was philosophical. But much of it surely was the product of fear. Our economy is contracting, people are frightened — and in that situation, primal survival instincts begin to govern conduct.

 

10 March 2009

Can Montana fight genocide with its checkbook? Should it?

Can the State of Montana, through the exercise of its power to invest its funds, make a material difference in the international effort to thwart genocide in the Darfur region of Sudan? Would divesture in entities related to the genocide be a proper and prudent exercise of Montana’s power? What impact, if any, would divesture have on the State of Montana’s finances?

Those are the primary questions raised by HB-619, Rep. Mike Jopek’s bill that empowers and orders the Montana Board of Investments to “Divest from certain investments in certain companies that conduct certain business activities in sudan or with the government of Sudan.” The House Appropriations Committee’s hearing on HB-619 starts at 0800 on 11 March 2009.

HB-619 is long and complex, but the policy objective is stated clearly in the eighteenth of the whereases at the beginning of the bill:

Whereas: it is the prerogative and desire of the State of Montana, with respect to investment resources in its control and to the extent reasonable, with due consideration for, among other things, return on investment, on behalf of itself and its investment beneficiaries, not to participate in an ownership or capital-providing capacity with entities that provide significant practical support for genocide, including certain non-United States companies presently doing business in Sudan;

Whether genocide is occurring in Darfur is not at issue — the evidence of genocide is so overwhelming that the International Criminal Court issued a warrant for the arrest of Sudanese President Omar Hassan Ahmad Al Bashir. (Readers desiring detailed information about the on-the-ground facts should start with the U.S. State Department’s bone-chilling report on human rights violations in Darfur.) The situation most certainly appalls all members of the committee.

Can Montana make a difference?

Yes — if it has investments in entities whose business activities provide significant practical support for genocide. If the supporting evidence required by HB-619 can be obtained, Montana can liquidate its unclean investments and invest the money in social responsible companies. According to the Sudan Divestment Task Force, Sudan is susceptible to economic pressure, and divesture is an effective way to apply that pressure. SDTF’s well documented and reasoned Sudan Divestment Resource Guide addresses efficacy and legal concerns in considerable detail. And Whitefish resident Josh Schott’s testimony provides a fine overview of the issue.

Would divesture be a proper exercise of the State of Montana’s powers?

Yes. The rationale resides in the preamble to the state’s constitution:

We the people of Montana grateful to God for the quiet beauty of our state, the grandeur of our mountains, the vastness of our rolling plains, and desiring to improve the quality of life, equality of opportunity and to secure the blessings of liberty for this and future generations do ordain and establish this constitution. (Italics added.)

The preamble does not say “…future generations of Montanans.” Perhaps some of the constitution’s drafters thought that limitation was implicit in the document because of context, but I certainly do not read that limitation into it. It simply says “future generations.” Unless our state is an island, unconnected to the rest of the world, with no responsibilities beyond our borders, we have a human obligation to extend a helping hand to those in need when we can do so.

Would divesture hurt Montana’s finances, and thus its citizens?

A fair question, indeed a question responsible legislators must not ignore. Fortunately, the answer is “no,” and not just “no,” but “no” focoso fortissimo. The official fiscal note for HB-619 provides the answer: the bill would have no significant impact on the state’s financial situation. The fiscal note’s sole concern was that:

It may be difficult to obtain the types of information required by this legislation from accurate, reliable, and independent sources. Any company subject to the requirements of the legislation would likely trade on foreign exchanges where detailed information of its “on the ground” activities may not be available.

That’s a fair observation, but certainly not a reason for killing the bill. In some cases sufficient evidence to support divestiture undoubtedly exists. HB-619 requires a good faith effort, not perfection.

I note parenthetically that even if HB-619 were to produce a small adverse effect on Montana’s financial situation, I would nonetheless favor the bill. We are not relieved of our moral obligation to rescue a drowning man just because we might get wet doing so.

PERB’s inexplicable and troubling opposition

The board of directors of the Montana Public Employee Retirement Administration (PERB), opposes HB-619 because “…the PERB wants [Montana’s board of investments] BOI to get the best possible investment return, opposing any impediments (Status of Retirement Legislation, March 05, 2009; PDF).” Yet the fiscal note for the bill, written on 19 February 2009, reported that HB-619 would not have any impact on the state’s financial situation.

Does PERB really believe that its highest obligation is to obtain the highest possible return on its investments — even if some of those investments are soaked in blood? I find that hard to believe, yet when PERB uncategorically opposes HB-619 instead of requesting changes, I find that is what I must believe. PERB needs to do some soul searching.