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Friday, January 29, 2010

Hunhoff: Get State Money Out of International Evil

Senate Bill 134 is up. This legislation from Senator Stan Adelstein and Representative Dan Lederman would divest South Dakota investment funds from companies doing business with Iran.

Yanking our money from Iran is a good idea. But if we're going to engage in social investing, we should be concerned about any evil our money supports, whether it kills our soldiers in Iraq or women and children in Sudan.

With that in mind, I reprint a letter from Rep. Bernie Hunhoff to the Yankton County Observer, in which he discusses the need for a broader view on social investing that goes beyond the specific politics of Iran, as embodied in Senate Bill 21.

For The Observer


By Rep. Bernie Hunhoff

Chol Atem of Yankton spoke to state legislators last year about the evil regime that continues to terrify the people of his native Sudan. The Mount Marty College student joined others who pleaded with the 2009 state legislature to stop investment of state monies in companies that support the Sudanese government. Chol is one of the "Lost Boys of Sudan" who had to flee their homes to avoid been killed or abducted by government-sponsored gangs of terrorists who have now murdered more than 300,000 people and caused two million to abandon their villages.

While the divestment bill did not pass last year, Chol's testimony still rings in the ears of many who heard him. And last week — in the opening days of the 2010 legislative session — we were able to pass a bill through a Senate committee that addresses our state's responsibility in foreign affairs. Hopefully the compromise language will continue to find support as it winds its way through the Senate and House.

The bill requires the State Investment Council (SIC) to establish a Social Activism Policy to deal with problem companies. Once the U.S. Congress identifies such companies, the state legislature would advise the SIC to apply the policy.

The SIC staff in Sioux Falls would then begin a process of "engagement," meaning they would alert the companies that South Dakotans won't tolerate such behavior and that they must end their relationships with certain governments. Engagement is considered an important step by many foreign affairs experts, and hopefully it will have an impact. If it does not, then the Social Activism Policy requires that the SIC apply a risk-factor to the targeted companies which would eventually lead to the divestment of that stock.

The SIC would report to the legislature annually on the success of the policy.

The compromise bill (Senate Bill 21) doesn't act quickly enough for some in the legislature, especially a group of lawmakers who want immediate divestment from three companies that do business with the dictators in Iran. But overnight divestment gives away the opportunity for engagement as a major stockholder. Some experts think engagement can be more effective than divestment, so long as there is a threat of divestment. Immediate divestment may garner big headlines, but does it change corporate behavior?

The compromise also addresses the opponents' concerns that states shouldn't dabble in foreign affairs. South Dakota legislators and our State Investment Council will only apply the Social Activism Policy when the U.S. Congress acts to identify problem companies. The Congress has already done so for both iran and Sudan.

The SIC board and staff are rightfully worried that any engagement and divestment law may eventually lead to other proposals. Should we invest more in value added agriculture plants or renewable energy companies that locate in South Dakota? Should we cease investments with tobacco companies?

Our proposed bill would prohibit those types of social investment initiatives, but establish a procedure that seeks to keep your state dollars from being used to murder, maim, terrorize and oppress people in other parts of the world.

If the bill passes we can thank Chol, who is now working at Hy-Vee in Yankton and hoping to attend law school. His trip to Pierre made a difference.

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