(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, commended the General Assembly for a bipartisan call on Congress to amend federal law to give state pension plans a pathway to recover what could be hundreds of millions of dollars in nationwide economic damages resulting from Russia’s unprovoked military attack on Ukraine. The House resolution, which passed unanimously, and a statement issued by 40 senators condemned Russian President Vladimir Putin for the international atrocity.
“I am deeply grateful that our elected representatives took a stand of solidarity with the people of Ukraine, who are suffering a humanitarian crisis and loss of innocent civilian lives due to the brutal war crimes of Putin,” Treasurer Folwell said. “It is comforting to know that in a time of political rancor when there are those who try to divide us, North Carolinians can unite under a righteous cause to stand up and be counted.”
On Wednesday the treasurer requested that Congress amend the Foreign Sovereign Immunities Act (FSIA) of 1976 to provide direct recourse for the North Carolina pension fund and other institutional investors and state pension funds. Holding corrupt regimes and foreign state-owned corporations accountable for losses stemming from their deadly misdeeds applies economic pressure that could lead to an end of hostilities.
Treasurer Folwell also urged the General Assembly to condemn Putin’s breach of international peace, which has choked off food, medicine and energy from Ukrainian cities and spawned a flood of an estimated 2 million refugees pouring into neighboring European countries.
The treasurer’s initiative has drawn support from the State Financial Officers Foundation, and U.S. Sens. Thom Tillis and Richard Burr. He has spoken to other members of North Carolina’s congressional delegation. Other state treasurers have been reaching out to him to learn more about his proposal.
House Resolution 981 sponsored by House Speaker Tim Moore, R-Cleveland, passed 112-0. Both the House resolution and Senate statement read, in part, “North Carolina taxpayers and public employees who teach, protect, and otherwise serve should be granted additional recourse to hold the Russian Federation, its corrupt leadership, and its state-owned corporations accountable in U.S. Courts for economic damage done to the United States.”
Included in the House language is advocacy of amending FSIA to provide state pension funds with greater legal mechanisms to recoup economic losses more easily.
The resolution further expressed support for American troops deployed to Europe as part of allied efforts to aid Ukraine and to take steps to reduce U.S. dependence on foreign oil by increasing domestic energy production.
The senators’ statement gained momentum after support from Senate Majority Leader Phil Berger, R-Rockingham; Mike Woodard, D-Durham; Jay Chaudhuri, D-Wake; Bill Rabon, R-Brunswick; Lisa Barnes, R-Johnston; Jim Burgin, R-Harnett; and Chuck Edwards, R-Henderson.
As of Feb. 25, the Department of State Treasurer had minimal securities in its international equity portfolio that are domiciled in Russia, with just under $80 million or just 0.067% of the plans’ total holdings of $118.2 billion. The Supplemental Retirement Plan portfolio has about $12 million in exposure or 0.077% of that plan’s $15.5 billion in holdings all within the international equity and index funds.
Other state systems have much larger Russian exposure, including the California Public Employees’ Retirement System and California State Teachers’ Retirement System, for example. They have investments totaling between $900 million and $1.1 billion, and $171.5 million, respectively.
USA Today has quoted a pension expert who said more than 200 state and 3,000 local pension funds could be used as a tool to impose further economic sanctions on Russia.