New laws hit Sudan funds
Governor Arnold Schwarzenegger was joined by actors George Clooney and Don Cheadle, former Secretary of State George Shultz, Assemblymember Koretz, Assemblymember J. Horton, executive members of the Sudan Divestment Task Force and other community leaders at a public signing for AB 2941 and AB 2179.
Published: Tuesday, September 26, 2006
Students reveled Monday in a major victory for their divestment movement as Gov. Arnold Schwarzenegger signed two bills requiring California's public pension funds to shed Sudan-related holdings.
The bills, seen as inspiration for a burgeoning national divestment campaign, will also trigger a University of California plan to start divesting in nine multinational energy and engineering companies doing business in the war-torn African country.
With roughly $360 billion in combined assets, the California Public Employees' Retirement System and California State Teachers' Retirement System represented the biggest prize for students who turned an informal network of individuals with a shared belief into a well-run lobbying machine.
"A lot of people look to PERS and STRS. This is going to make a big splash," said Adam Sterling, executive director of the student-led UC Sudan Divestment Taskforce, in an interview.
With Monday's signing, at a Burbank hotel, the Republican governor showed the power of incumbency as he co-opted a major political cause of his Democratic political rival, Phil Angelides.
As state treasurer, Angelides has urged the state pension boards to use their financial clout to fight atrocities in Sudan and pull investments out of the country. But six weeks before the Nov. 7 election, it was Schwarzenegger who stood Monday beneath a "Fighting Genocide" banner with Hollywood actor- activists George Clooney and Don Cheadle, and state NAACP President Alice Huffman.
"We cannot watch from the sideline and be content to mourn this atrocity as it passes into history," Schwarzenegger said. "We must act, and we must act now."
Clooney joked that the last time he shared a stage with Schwarzenegger, "he was playing Mr. Freeze and I was Batman," a reference to their roles in 1997's "Batman & Robin."
He then turned serious, giving a brief nod to Angelides, noting that the state treasurer had sponsored one of the bills: "There are no Democrat or Republican sides to this, there is only right and wrong."
Angelides issued a statement: "Californians have a moral responsibility to help end the genocide in Sudan. I am pleased Democrats and Republicans have come together to enact this legislation, which will help ensure our state pension funds and the University of California do not unwittingly support the Sudanese government."
What does the legislation do?
• Assembly Bill 2941, carried by Assemblyman Paul Koretz, D-Hollywood, requires that CalPERS and CalSTRS meet with corporate executives whose operations are generating revenue for the Khartoum government or show complicity in the Darfur crisis. If companies refuse to cooperate or pull out of Sudan, the funds would start selling off their holdings.
• Assembly Bill 2179, by Assemblyman Tim Leslie, R-Tahoe City, supplies the legal underpinning for UC to carry out its plan to end investments in nine energy and engineering companies that invest in Sudan.
Among the targeted businesses are Bharat Heavy Electricals Ltd. of India, an energy pipeline and power generating engineering company; China Petroleum and Chemical Corp.; Oil & Natural Gas Co. of India; PetroChina Co., a publicly traded subsidiary of China National Petroleum Corp.; and Tatneft OAO, a Russian oil company.
At least 200,000 people have been killed in Sudan's Darfur province and another 2 million left homeless. President Bush has called the mass killings genocide.
An African Union peacekeeping force has been ineffective at quelling the violence. But Sudanese President Omar al-Bashir has rejected a United Nations Security Council move to send peacekeeping troops.
For more than a year, students, religious leaders, human rights groups and some lawmakers have lobbied pension funds to leverage their investments in multinational companies to put economic pressure on the Khartoum government. CalPERS and CalSTRS have also come under pressure from leading Democrats, including Angelides and Rep. Barbara Lee of Oakland.
At the same time, a small group of UC students pressed the issue with regents, who oversee more than $66 billion in pension and endowment assets. In March, regents agreed to start selling holdings in nine companies once the state indemnified them from potential lawsuits that could result from any financial losses associated with the divestment. AB 2179 gave the regents that legal shield.
In April, after hearing impassioned pleas from students who had once been refugees, CalSTRS trustees agreed to explore dumping all investments in companies doing business with Sudan's oil-rich government.
One month later, in a largely symbolic gesture, CalPERS trustees barred investments in the nine companies targeted by UC. PERS did not own a stake in any of the nine.
The breakthrough legislation in California is critical for divestment activists lobbying for similar legislation in more than a dozen other states. It also reignites a college campus movement that hit a lull during the summer break.
California "was the key state. It's going to send shock waves across the country," Sterling said.
At the bill-signing ceremony, Sterling said college students will go after the Sudanese government "state by state, pension fund by pension fund."
Eric Reeves, a professor at Smith College in Massachusetts and a leading researcher on Sudan, said the clout of CalPERS and CalSTRS, the nation's two largest public funds, can't be ignored by other pension funds and the financial markets.
"The really big money is in public pension funds. There is no place for anyone to hide now," Reeves said in an interview.
About the writer:
· The Bee's Gilbert Chan can be reached at (916) 321-1045 or email@example.com. The Bee's Dale Kasler and Kevin Yamamura contributed to this report.