Saturday, June 16, 2012

If Divestment Of The Alaska Permanent Fund From Iran Is O.K, What About Divestment From Israel, Mexico, Or South Africa?

Some Alaskans have their panties in a twist because the Alaska Permanent Fund Corporation hasn't taken any steps to divest the fund from Iranian sources. Six months after Governor Sean Parnell called for a "policy of divestiture" of state resources from companies that do business in Iran or with that country's ruling government, the Alaska Permanent Fund Corp., the state Department of Revenue and the Alaska Retirement Management Board have not ordered the sale of stock holdings in companies that either do business in Iran or with the Iranian government. Moreover, the officials claim that according to the respective mandates for managing state funds, they're still honoring Parnell's request, even if they're not actually carrying out his wishes.

On January 31st, 2012, Gov. Parnell sent letters to the three agencies listed above, asking them to the extent allowed by law to pursue a policy of divestiture. He cited nuclear concerns raised by the International Atomic Energy Agency and a hostile Iranian stance against Israel. Israel has argued that an Iran with nuclear weapons would threaten its survival, even though they have an estimated 300 nukes at their Dimona facility. Some members of the state legislature, most notably Sen. Sen. Bill Wielechowski (D-Anchorage), responded affirmatively; Wielechowski drafted SB131, which ended up buried in the Senate Finance Committee.

According to a Legislative Research Services memo, Alaska has an estimated $79 million invested in companies that invest in Iran. Those companies include China-based China Petroleum and Chemical, South Africa-based Sasol Ltd. and Russia-based Gazprom OAO. The $79 million represents about 0.1 percent of the state's overall investments.

However, Article VIII, Section II of the Alaska State Constitution states "The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people". Being that the Permanent Fund represents the financial product of utilization and development, it follows that it, too, should be invested for the maximum benefit of the people. In fact, the Permanent Fund Corporation website clearly states that "the goal of the Fund’s investments should be to maintain the safety of principal while maximizing total return". Thus I posted the following comment to the ADN story:

The Alaska State Constitution requires that our natural resources be exploited for the maximum benefit of the people. As the financial product of that exploitation, the Alaska Permanent Fund should also be invested for the maximum benefit of the shareholders. That's us.

Imposing litmus tests of political correctness upon our investment scheme hinders this mission. Iran doesn't like our government, but has not attacked us. They haven't invaded any other countries. They don't run extermination camps. Thus there is no sound justification to divest from Iran. Besides, it could open the door to divestment from other countries. Some in this thread have suggested Israel, primarily because of their attack on the USS Liberty in 1967 and their behavior in the Occupied Territories. Others might suggest Mexico because they contribute to our illegal immigration and drug problems. Still others might suggest South Africa because of the government's brutal oppression of the white population and its failure to stop the Boer farm murders. Once you start this divestment mania, where does it stop?

Besides, I would rather see the Permanent Fund managers invest in Iran than in foreclosed properties in the Lower 48. Many of those foreclosed properties stand vacant for months on end and are targets for vandalism and squatting.

The third paragraph refers to a controversial proposal by the Permanent Fund Corporation to invest up to $400 million, or one percent of the Fund's current value, in hundreds of foreclosed properties and possibly more through a property management firm called American Homes 4 Rent LLC. The property management firm already owns 1,000 single-family homes. The proposal was strongly criticized in comments to the ADN story.

Back to the original premise, though. One can undoubtedly find advocates for divestiture from other countries as well. Advocates for Tibet might call for divestment from China. Advocates for Greece might call for divestment from Turkey. Advocates for the United Kingdom might call for divestment from Argentina over the simmering Falklands dispute. Furthermore, multinational corporations have so many varying interests one would need an army of CPAs to unravel them all. Once you set this in motion, where do you stop?

This is why the Anchorage Daily Planet has editorially called divestment a bad idea. Not only do they consider it a terrible precedent, but suggest that the very companies we would punish for doing business with Iran might be the very ones trying to change that nation’s behavior. The Planet says we should keep politics out of it.

I agree.

4 comments:

  1. "the Alaska Permanent Fund should also be invested for the maximum benefit of the shareholders. That's us."
    ****Don't hold your breath.If one believes that tripe I have Ocean side property for sale in Reno.Americans, they live in a twilight zone created by hokum-peddlers.

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  2. I think you should go to hell.

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  3. I see in the Seattle Post that “Russian” immigrants in that city had a get-together for poetry and camaraderie. In attendance were such people named Kiner, Grisha, Tsitrinyak, Posen, and Vasilevsky. Infact, the whole damned bunch was kosher to the hilt. Every “Russian” I see at the plaza are ugly dwarfs with dark lizard-like eyes, dark kinky hair and a nose any salami maker would be proud to have as a model. Pretty soon I expect to see a batch of Mongolians immigrating as penguins.

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  4. Biased Article.
    Biased Website.

    ReplyDelete