Investment council to fight for the right to invest in terrorist countries?

Once again–Hats off to Dan Lederman for leading a fight that needs to be fought–and fought well.

Dan–thanks for being willing to serve.

As a rule, I’m against any social investing guidelines for trust or fiduciary funds like the SDRS. They need to be a vehicle for the benefit of the recipients only, and not a vehicle of public policy. Those people entrust their life savings to the fund and it must put their interests first. If SDRS creates a sub-fun with social investment as an option members may choose on their own, that’s a different story.

There is a huge problem with the statistics used to support our “investing” in these countries. Virtually all the firms targeted are oil companies, oilfield service firms etc. Can we as a nation that gets 50% of its oil from these states really blame the oil companies for supporting terrorist states? Who’s really doing the terrorism supporting here?

It’s all of us. Oil companies didn’t make Bin Laden’s family incredibly wealthy, we did.

Keeping SDRS from buying Exxon stock is a meaningless gesture. I gotta put this one in the “feel-good-nanny-state” legislation category that accomplishes absolutely nothing.

I really want Sen. Frank from Scotland deciding where and how my taxpayer dollars are invested or what happens to my granddaughter’s retirement funds. BAH. On the other hand, I’ve heard rumors about the investment board.

Here’s a partial list of companies whose stocks would be involved.

Should we close all the Conoco, Shell and BP stations in S.D.? Burn our Mastercards and Nokia phones? How about we outlaw all the Seimens wind turbines currently being erected here? Anybody wanna bet Citi or UBS don’t have any business in those countries? How many of us buy gas at CITGO stations which are owned by Hugo Chavez’s Venezuelan national oil company? Talk about supporting somebody who hates America, c’mon.

Silly legislation. Good for chest thumping, lousy policy

From MSN:

“A look through corporate filings shows the following U.S. companies regularly do business in Iran, Syria or Sudan, all countries the State Department calls “state sponsors of terrorism”: ConocoPhillips, MasterCard, Western Union, energy equipment and services companies Schlumberger and Natco Group, and Overseas Shipholding Group.

Foreign companies listed on U.S. exchanges doing business in these countries include: BP PLC, Royal Dutch Shell, Total, Eni, Petro-Canada, Siemens, Nokia and Deutsche Bank.”

Good for Lederman. My brother is leaving for his second tour – this time to Afghanistan. We should not be funding countries & people who want to kill us. Period.

As far as the oil companies, same deal. I’d rather buy oil from ND, the northern slope, the gulf & ethanol from farmers than give one cent to the Saudi’s.

Good, patriotic policy.

There is a website called Terror Free Oil Initiative. It is pretty informative. And I never go to a Citgo station.

I’m with The Truth. If we were allowed to develop energy sources in our own country, we wouldn’t be having this discussion.

this is why we need lil saracuda. There are places in Alaska where you can see oil fields – and no jews or muslims. I’ve stopped asking myself WWJD. I now ask what would Sibby do, and then generally do the opposite. Pat, are you and the missus ready to scratch half her SDRS beny?

What will happen when Repubs start peeling layers off the onion is how incestual and cozy corporate Ameerica ois with questionable regimes all over the world.

Let’s face it for all the PP and Dan Lederman chest-thumping going on… Their Presodent, George W. Bush flew over 100 Saudis, incliding members of Bin Laden’s family, out of the coiuntry on Sept 13, 2001!

This is a typical pretend-Patriot idea…. The kind of idea Limbaugh, Cheney and W could all get behind.

Get real.

I was told at coffee today that a lot of the South Dakota Agricultural products exported out of this country ends up feeding terrorists and their families in a lot of foreign countries! One of the coffee crew even said he remembered not that long ago that some liberal Democrat politicians in South Dakota were even trying to get the agricultural trade barriers with Cuba dropped! These liberal Democrats actually wanted to export South Dakota agricultural products to our arch enemy Cuba!

Our waitress said he uncle works for the State of South Dakota and his job is to help increase exports! She texted him and asked if any South Dakota agricultural products ever end up in Sudan or any other of these countries that might produce terrorists? His reply was of course they do! Sometimes the sale is through a company that just turns around and sells it to anyone. So sure, South Dakota does feed terrorists!

This simply can’t be true! If so, I would like to see any of our candidates running for Governor make a pledge that if elected they will do everything in their power to stop any type of South Dakota trade delegation from doing business with any country that produces terrorists! And for goodness sakes, keep them out of Cuba! I mean, Cuba is only 90 miles off of our coast and look at all the terrible things they have done to us over the last 40 some years.!

Is there anyway we can get our South Dakota Legislature involved to force our ranchers and farmers to quit feeding these terrorists!

It’s a belated, necessary start. If we won’t invest in ourselves – who will?
Every time we fill our gas tanks we are funding the Wahhab’s, and by extension funding their madrasahs. Every time.
Every time we put an oil man in the White House, or one sympathetic to oil men (both parties) – we take a giant step backward, furthering our dependence on those who spite us.

A generation ago we were within a couple of years of a breakthrough for self-reliance on liquid fuels – but our political oil men put it on the shelf.
http://www.wired.com/wiredscience/tag/algae/

Letting Kloucek, Hunstad, Howie et al make investment decisions for the state and state employees is a really slippery slope. If this were allowed, we’d most likely be invested in a lot of local politically motivated, doomed-to-fail ventures. Poet, Big Stone II, Hyperion, etc. At tyhe same time, nobody wants to support terrorism.I’m not sure what the answer is, but putting legislators in charge is not the answer.

Having the legislature tell the Investment Council what they can or can’t do makes no sense at all. Next you’ll tell us that we can save lots of taxpayer money by firing Matt Clark and all the other investment people we hire, cause we’re going to let Klocek make the decisions.

Social engineering… Like our SD investment amounts to a hill of beans anyhow!

Having trade with other countries is a good thing. It creates prosperty where ever it happens. As for investing hard assets in another coutry that is another story.

One thing to remember about exporting ag products to cuba it would be a good idea. We should use food as a incentive to encourage the Cuba to change. When trade was opened with china every GM car or truck sold in China is a little symbol of American and it’s values. Wars are not just fought with weapons but selling an the idea in why our country is so great.

Last year Lederman was busy attempting to develop policies for school districts, now he’s going to have the legislature set policies for the SDRS system.

Stupid, stupid idea. You’re all missing the bigger issue, esp. “the truth”. This bill seeks to involve our SD investments in middle eastern politics pitting Israel vs. Islam, Shia vs. Sunni, and the House of Saud vs. the Mullahs in Iran – and it’s ridiculous. It’s why your brother is leaving for his second tour (this time for Afghanistan)when all the terrorists who bombed us on 911 were from Saudi Arabia and it will never matter how well we rearrange the rubble in that forlorn country, they’ll never be like we are. They sleep with goats and worship killing and death via Islam – and we expect them to someday peacefully hold town-hall meetings and obey the rule of law? Fugettaboutit. If our nation is to have any hope of stepping back from the brink where she currently stands, then “good patriotic” Americans needs to start worrying about America first, rather than never-ending Middle Eastern wars of revenge and conquest that began in 3000 B.C. and shall continue until Armageddon! Now I’ve got to go gas up at BP and get a new Nokia phone.

Just because we the people buy fossil fuel from foreign companies doesn’t mean that our government has to invest in them. We buy what we have access to. good for legislators like Dan Lederman who are trying to have our government do right rather than saying “well everyone else does it so why can’t we”.

Lederman for Governor in 2018!

One point that many commenters are making here is that we have to START doing things, to include investment, that are in OUR own long-term interest. (Not the interest of the petro-dictators, their pseudo-corporate props and banksters, etc.) Initially the change will be a little uncomfortable, parts of it may initially be a little expensive as we restructure our investment and its supporting infrastructure.

We have three choices:
Adapt, migrate, or die.

MHS,

You are right on many counts.

* These are my retirement funds entrusted to the SDRS to maximize return for my retirement. They are not State funds to do the bidding of anybody else.

* A company which sells insulin into Iran is on this list.

* It is the job of the State Department to set economic parameters that govern companies under the purview of the United States. Let’s not usurp the State Department’s job with our judgment of right and wrong.

Nothing I’m saying is to condone the anti-American actions of these states or I think we should be making direct investments into these countries. However, when I buy BP stock, not a single dime goes to one of these nation’s but to the person who owned the stock before.

Even if one could identify the seller of the stock and he was an Iranian, preventing me from buying it wouldn’t hurt him a bit. He’d just sell it to someone else. Like MHS said, this just feel good legislation w/o making a lick of difference in the real world.

Now I get it! Silly Democrats. When Rep. Hunhoff introduced HB 1098 last year to require the SDIC to divest of Sudanese investments, it went down in Commerce on nearly a party line vote. Social investing?–What a parochial idea! Sudan’s only sin is a little genocide. If Hunhoff had just zeroed in on what really matters, American lives, he would have had a sure winner! And now that the experts we appointed to the SDIC because of their expertise in investing are saying they need the freedom to exercise that expertise without legislative interference, watch out! THAT woke up the bear.

To truly debate the legislation we must see the bill.

Minnesota just passed a divestment bill that targeted Iran’s oil production. This would seem to fit what Congress is doing with the Iran Sanctions Act. Herseth, Thune and Johnson are co-sponsors on the current Iran divestment bills that urge state divestment so there is support from our federal delegates.

I am against social investing but if the bill targets Iran’s oil market, count me in.

Iran is a terrorist nation. Anybody that does business with the mullahs is fomenting global Islamofacism.

Divestment from Iran is essential to preserving a world where good trumps evil and civilization defeats barbarism.

I am normally totally against socially responsible investing, but this is about saving the world from 3rd world genocidal lunatics.

Divest now from Iran and support those who divest from Iran.

eric aka the Tygrrrr Express
http://www.tygrrrrexpress.com

Troy is right, PP is wrong.

We do not need the legislature playing politics with retirement funds.

Also, the statistics PP quoted are not nearly as black-and-white as implied. Corporate accounting is messy business.

In any case, we hire investment professionals to maximize returns, not maximize some sort of weird political economic structure.

And I’m sorry, but South Dakota’s investments in these companies are not “huge amounts” by almost any investment standard.

The entire post was a series of logical leaps.

Toby –

That’s the same kind of thinking that kept South Africa segregated.

Only if we choose not to invest will the companies making Iranian investments figure out that it is a poor business strategy.

Troy and Toby –

Would the parent companies of abortion providers be acceptable places for the state to invest?

PP make big bunny leaps of logic and I just kept following the mental bounces, leading me to the vision of Sen. Kloucek sitting in a smokey room in the basement of the capitol building rolling dice to decide how my granddaughter’s retirement funds are invested. I appologize for continuing the massive illogical leaps.

Since when did terror-free investing mean a smaller return on investment?

There are plenty of foreign oil companies to invest in that don’t help Iran.

The SDIC should just accept that they are wrong and reinvest the money elsewhere.

Anonymous 6:37 and 6:39:

Virtually nobody with any credibility thinks the prohibition on investing in South Africa gold coins had any effect on the end to aparthied. It was a corrupt system that ultimately fell by its own weight. I’m tired of “symbolic gestures” like this because it makes some people feel like they are doing something good when in the end it makes not a lick of difference. You want to impact these countries, let’s talk about something meaningful. Otherwise, you waste my time.

SDInvestmentCouncel’s criteria is return on investment, liquidity of the stock, safety and other matters for stock valuation. Law firms, accounting firms, medical clinics and other businesses where a signficant percentage of costs are labor are nearly always bad options for institutional investors. Your hypothetical is one that as a business model could never qualify and it has nothing to do with what it does to generate revenue.

You don’t like that they invest in oil companies, I wouldn’t like it if they invested in abortion providers, another guy wouldn’t like it they invested in ethanol, another guy thinks they don’t invest enough in ethanol.

We have two choices for a hybrid would just get the worst of both worlds:

1) Get rid of the SDInvestment Council and we each manage our own retirement funds.

2) Or we just let them manage the money for the best risk rated return they know how.

Three quick points:

Fact: Iranians are using their weapons and resources to kill American servicemembers. This is not just a State Department problem, not just an American military problem, not just a pro-Isreal supporter problem…this is an American problem. And it requires an American solution.

And because South Dakota dollars are going towards a regime that is equipping, resourcing and training the bastards that have killed our military men and women…we need to take action immediately. The South Dakota legislature can help defund, even if its just partially, this problem.

2) Enough of this, “Frank Kloucheck is now going to run my retirement fund” crap. The bill will simply tell the SDRS to pull its money from a country that is killing our servicemen. Incredibly different than telling the SDRS to start investing in “pet projects.” Since when is defunding a state sponsor of terrorism a pet project?

3) New Jersey, Florida and California passed similar legislation recently, and New Jersey is now the third state to pass such legislation.

New Jersey’s state pension fund is the ninth largest in the U.S. and is thought to be worth about $80 billion, though it is unclear how much is invested in companies doing business in Iran. The legislation requires the state to hire an independent research firm specializing in global securities to identify such investments.

If state pension funds as large and as infinitely more complex as New Jersey, Florida and Californa can divest from Iranian investmements…so can South Dakota.

The Texas Governor, the Michigan legislature, Minnesota, and all three of our federal elected offcials support this effort. The only thing stopping this from happening is the same old provincial South Dakota politics that we are used to.

Are we going to help our servicemen in the field or are we going to keep funding our enemies?

Troy:

I refuse to accept your two options. They are red herrings anyway.

Here are the only two options we have right now:

1) continue sending South Dakota dollars to a country that is helping to kill American soldiers or;

2) stopping it.

Troy -

Let’s say we throw out the retirement fund from the argument, and leave it simply regarding trust funds.

As investors, the people of the state of SD have the right to express through their elected representatives in Pierre the propriety of where their funds are invested.

As a taxpayer, I would not want those funds invested with entities that feel it’s ok to earn an extra 1/4 percent because a terrorist supporting country offers the opportunity.

There’s plenty of opportunities elsewhere that don’t support that type of regime.

The post by 8:20 pretty much exemplifies the drive behind this bill… Emotion, not facts.

Troy has nailed this issue down with facts over and over, but still that’s not good enough.

Fact- The stocks our investment council buys don’t have one ounce of effect on the people killing our troops, and fact, because three other states in much worse disarray that South Dakota have made this decision, doesn’t make it right. Following the fiscal lead of New Jersey, Florida, and California makes about as much sense as passing this bill would.

Israel over Iran, Canada over Venezuela, Gulf over Russia. I’ll make those picks all day.

Practical? Maybe not according to some here. I don’t know Lederman at all – but, at least this is a principled proposal.

Out of principle then – we should not fund, in any way, shape or form, people or countries that want to kill us.

Anon-

I have seen the list of companies that SDIC has money in.

Each of them have put more than $20 million into Iran’s petroleum production. They have been building refineries, offshore drilling rigs and pipelines.

Iran imports 40% of their refined petroleum. This is a weakness that the UN and the US are trying to exploit by applying sanctions.

The FACT is that South Dakota should join the fight not be part of the problem.

Also, the SDRS is a product of the legislature.

The suggestion that the legislature shouldn’t or can’t have a policy opinion in its management is akin to saying that the legislature has no say in the other agencies, departments or functions of the government. Especially, if those agencies have their own ‘board’ say Game, Fish & Parks for example.

That’s awfully ignorant to suggest it.

Pat, fair enough. I’m not sure that the Legislature can legally implement investment policies that aren’t merited by sound investment guidelines with regard to the retirement moneys. They have a fiduciary obligation to retirees to not use the money for political purposes. I think they lose in court in a heartbeat.

So let’s talk about Trust Funds. I agree the state legislature could make political statements with regard to these funds.

But let’s ask the question- Would it make a lick of difference to any of these nations or their capabilities?

For this to be true, you’d have to find an example where the State lent or invested directly into a particular nation. I doubt it exists.

If the State buys a Mastercard stock certificate (listed above as doing business in one of these countries), who gets the money? Not the nation and not even the company. The person that gets the money is the person who sold the stock certificate. So the only way the money goes to the offending country is if they owned the stock.

So, then let’s ask the question, should there be a law that prevents us from buying securities from an offending nation? What good would it do? What would prevent the offending nation from selling the stock to a citizen of say Switzerland (a peace loving neutral nation)? Nothing. And, what would prevent that person from selling the security the next day to the State of South Dakota? Nothing.

Guys, I’m all for meaningful sanctions (economic, political, and possibly even military) against these offending nations. I’m just telling you this law will have absolutely no effect on these nations and will only hurt the State of South Dakota.

I’m sorry but let’s talk about doing something real and not something that makes you feel good. Doing something out of principle which has no effect is an empty principle. Doing something which has an effect is a real principle.

Pat, you routinely, and rightfully, take officials to task for going to national meetings and coming home with a laundry list of legislation ideas, often for non-existant problems in SD. (This one, by the way, comes from the NCSL). While funding terrorism is a huge problem, this measure doesn’t help.

Here are some “feel-good” measures the Legislature could do that would go much further towards energy independence than an investment ban:

1. Officially condemn the Minnesota PUC for killing the Big Stone project and demand the Minnesota legislature pass measures to insure the construction of transmission capacity by Excel and other companies to transmit wind power across MN. MN loves to force private companies to do public investment, let them do something for us for once. One state taking another to task will generate some serious attention about the failures of our current energy grid and barriers to improvements.

2. Pass a measure cutting state employee travel by half. My experience is that most trips have little to do with governing and a lot to do with a local legislator wanting warm state employee bodies in his district. Legislators would have to suck it up and tell constituents that, no, the secretary of whatever can’t come to the local chamber meeting in person, it’ll have to be there by phone.

3. Same measure as the above for outlying employees, like College staff, being dragged to Pierre for endless legislative summer studies, committee hearings, etc.

4. Pass a measure encouraging county governments to reduce the number of improved roads by 10% of the next decade. I remember hearing we have more improved roads per capita than any other state. We have far, far fewer rural residents than we did 50 years ago. Smart planning to keep farm access open while reducing road mileage will save both oil and big amounts of local tax revenue. It will take several generations to accomplish, so we have to start now.

That’s off the top of my head: other ideas anyone?

MHS:

I think your cutting state travel is just driven by the times you had to go to Winner a few more times than you should have.

But your point is well-taken. “Feel good” symbolic acts usually just indicate a lack of resolve to do things than really make a difference.

Here are my suggestions to really have an impact on terrorism:

1) Quit trying to nation build. Strategically place our military and give them the intelligence to wipe out terrorism cells whereever they reside. If the Afghani’s want to live in a hell hole, give them what they want.

2) Build onto GITMO. If an enemy combatant is captured, promise them incarceration until Islam revolks its jihad against America.

3) If we have almost $4B to throw down GMAC’s rat hole, we have money for nuclear power plants. Put their permitting on a fast track (doesn’t mean sacrifice standards just throw resources to speed up the process).

4) Overtly stand behind the people of Iran trying to gain control of their government.

Interesting ideas, both emotional and rational have qualities. I go back to my thoughts on how we Americans would be acting if multi national corps were pillaging our resources and the UN along with other countries were telling us how to butter our bread. They would have to tell the rest of the world what a bunch of terrorists we are to gain that unilateral support necessary to drive us back into our hell holes.

To your point 4 Troy, remember we put the Shah in power before, and we are there again, more covertly than overtly. Again it will not be a government of the people.

Troy, I have to disagree on overt action in Iran. It is, after all, the most western-minded, modern country in the region. Thousands of years of enlightened thinking in the Persian empire cannot be undone by 30 years of stone-age leadership.

The cracks are widening, the Islamic regime will collapse of its on weight in a few years. Les has very good points, we should not make the same mistakes of heavy-handed intervention again.

As to Winner, I still have a lucite cube from a certain Rapid City sewing company handy if want to play that game, bucko. Maybe Pat would post a pic . . .

MHS:

I agree with you. I wasn’t advocating anything military.

I think we need to just be more verbally supportive of the protesters. When they yell, “Obama, are you with us”, he needs to say “Yes I am.” The people deserve to here from the most free nation in the world.

There are enough investment options that we do not have to benefit Nations that hate us. End of discussion!

Well put feasant.

The investment council should do the right thing and divest.

What legislator or elected official wants to be seen as supporting Iran? I mean the worst of the worst!

“This is what’s right for America, its right for the world…it says that Iran, the world’s leading sponsor of terror, we will not stand idly by anymore,” said Florida Gov. Charlie Crist in the International Herald Tribune.

“As Iranian President Mahmoud Ahmadinejad was in New York Monday preparing to speak at the United Nations, California Gov. Arnold Schwarzenegger was at the U.N. talking about global warming, but the governor took time out to release a prepared statement saying he would sign into law a bill requiring state pension funds to divest an estimated $24 billion from nearly 300 companies doing business with Iran.

“California has a long history of leadership and doing what’s right with our investment portfolio,” the governor said in the statement. “Last year, I was proud to sign legislation to divest from the Sudan to take a powerful stand against genocide. I look forward to signing legislation to divest from Iran to take an equally powerful stand against terrorism.”

Don’t the School and Public Lands and State Treasurer’s office have a say in where the money goes? and aren’t they elected officials?