In a symbol of political protest against the alleged genocide in Sudan, Wisconsin legislators introduced a bill Wednesday that aims to divest state funds from companies associated with the country's central government.
The bipartisan legislation would require the Wisconsin Investment Board to oversee divesting an estimated $110 million in state securities from international companies that share revenue with the Sudanese government.
"These companies are providing the government of Sudan with the revenue they need to conduct their expensive genocide," Harsdorf said at a press conference Wednesday. "It is a moral imperative to divest our state's pensions funds from these companies."
The state securities are part of the $90 billion Public Employee Trust Fund, which provides economic security for public employees after retirement. Milwaukee city and county employees have their own tax-supported fund.
David Mills, executive director of the Wisconsin Investment Board, estimates 530,000 state employees are currently covered under the fund and 150,000 are now retired.
Though he sympathizes with the bill's cause, Mills said he opposes the legislation because it uses public money for a political purpose.
"It's a very laudable cause with the wrong solution," Mills said. "It's somebody else's money."
The legislation, authored by state Sen. Sheila Harsdorf, R-River Falls, and Rep. Fred Kessler, D-Milwaukee, could also come at a tremendous cost, according to Mills.
According to Mills, the bill requires the Wisconsin Investment Board to evaluate and list all companies associated with the Sudanese government and transfer securities associated from unapproved companies to a specialty-managed fund.
Mills said the bill could cost $175 million each year with millions paid toward transfer fees and the remainder paid regularly to a specialty fund manager.
At the press conference Wednesday to introduce the legislation, supporters of the bill said it would affect 20 to 25 foreign companies, including China's biggest producer of oil, PetroChina.
Harsdorf conceded that Wisconsin's impact on the Sudanese government's actions will be limited but said states could collectively provide economic pressure. More than 20 states are currently pursuing divestment strategies.
"There's no question this is genocide," Kessler said at the press conference. "If we can put more pressure on [Sudan], we may end up in a situation where we can help protect the physical lives and the safety of many innocent people."
Kessler said he understands the Wisconsin Investment Board's concerns, but felt the bill is limited in such as way that it minimally impacts the Public Employee Trust Fund.
Mills said he also questions the bill's legality because it may violate current Wisconsin statutory law.
Under state statue 40.01 (2), which explains the purpose of the Public Employee Trust Fund, the fund "shall be managed, administered, invested and otherwise dealt with solely for the purpose of ensuring the fulfillment at the lowest possible cost of the benefit commitments to participants, as set forth in this chapter, and shall not be used for any other purpose."
Mills said the bill violates the "shall not be used for any other purpose" clause.
Several University of Wisconsin political science professors contacted Wednesday were uncertain whether the new bill would violate the statue or override it.
"It sounds like there's a statutory issue there," said UW political science professor Donald Downs. "If this were a constitutional provision, this might be different."
Amanda Leipold, a 2006 University of Wisconsin graduate who attended the press conference with other students and community advocates, said the ability to divest from Sudan is worth the price.
"I worked for the state for three years. I have money in the retirement pension fund — I don't want my retirement money funding genocide," Leipold said. "And I think if you asked any other state employee, they would say the same thing."
Leipold said the bill targets international oil companies primarily because the Sudanese government benefits the most from those companies' shared revenues.
"The one place they do have revenue coming in is oil, so that's why it targets specifically at international oil companies that are funding oil revenue in Sudan," Leipold said. "If we can cut off their money through oil revenue, then we can help maybe stop them from killing."
A shorter version of this story printed on Feb. 22, 2007.