The United States’ biggest public pension funds have invested nearly $200 billion in companies that conduct business in countries that support terrorism, according to a report released Thursday.
Frank Gaffney, president of the Center for Security Policy, the think tank that issued the report, accused the pension funds of “enabling” terrorism by propping up regimes that send money to terrorist organizations.
He urged a divestiture campaign, similar to one against South Africa during the apartheid years of the 1980s, to force the funds to withdraw their money from companies linked to State Department-designated terrorist nations.
“We are not suggesting that what they’re doing is illegal, but that doesn’t mean it’s right,” Gaffney said. “These companies are enabling terror by propping up and providing lifeblood to these terrorist regimes.”
Pension officials are themselves divided on the issue.
Some funds have aggressively sought details on companies’ involvement with suspected state sponsors of terror. New York City Comptroller William Thompson and Arizona State Treasure David Petersen, for instance, have waged campaigns to force state pension funds to provide more information about their investment in such companies. But neither has called for divestment.
Other state funds have said that pulling out of profitable companies would violate their fiduciary duties to seek out the best return on their investments.
“It takes a quantum leap to conclude that a company is supporting terrorism by doing business in countries where there may be terrorist activity,” said Gary Findlay, the executive director of MOSERS, the Missouri State Employees’ Retirement System. “We don’t do foreign policy.”
Thursday’s report said the pension funds had invested in more than 400 publicly traded companies that have done business in nations identified by the State Department as sponsors of terrorism.
But the report named only a “Dirty Dozen” such companies, all based in Europe, including Germany’s Siemens, France’s Alcatel and Switzerland’s UBS. All of the named companies contacted Thursday said their investments were legal and dismissed the argument that their actions supported terrorism.
Of the 400 on the list, the center said, about a quarter are U.S.-based companies that either operate directly in places such as Syria, where investments are limited though legal, or through foreign subsidiaries in places such as Iran, where sanctions ban any investment by U.S. citizens.
