An Illinois district court ruled the state's Sudan divestment plan to be unconstitutional Monday, but Wisconsin officials say the decision will serve little precedent over their proposed legislation.
Wisconsin's bill, authored by state Sen. Sheila Harsdorf, R-River Falls, and Rep. Fred Kessler, D-Milwaukee, proposes transferring $110 million in state pension funds from certain international companies that finance the Sudanese central government through shared revenue.
The Illinois Sudan Act, while similar to the Wisconsin bill's goal, is "greatly different in practice and in scope," according to a joint statement released Monday by Harsdorf and Kessler.
"Illinois' divestment bill targeted more than 160 companies doing business in Sudan," Harsdorf and Kessler said. "This list even included some American companies specifically exempted from U.S. sanctions."
The Wisconsin bill follows a recent approach mirrored across the country to target specific companies, and according to Harsdorf and Kessler, this method agrees with foreign policy laws and is constitutional.
Branton Kunz, state director of the Darfur Action Coalition of Wisconsin, said the Illinois Sudan Act was one of the first state measures to divest from Sudan and contained many faults. Most people knew it was going to be ruled unconstitutional, he added.
"It took a broad approach while Wisconsin takes a targeted approach," Kunz said.
The Wisconsin bill proposes divesting state pension funding from 20-25 international companies, mostly composed of large oil and mining companies.
The Wisconsin Investment Board, which oversees state pension funds, said it opposes the bill for legal reasons and said it could cost the state $175 million to manage.
But like the bill's authors, the Wisconsin Investment Board said the Illinois court ruling provides little direction for Wisconsin lawmakers.
"They've got a total divestment," said Vicki Hearing, public information officer for the Wisconsin Investment Board. "That decision does not address any of our legal concerns."
The Wisconsin Investment Board said the bill violates state statute 40.01(2), which states the Public Employee Trust Fund shall not be used for any other purpose than ensuring the fulfillment of public employees.
In response, Kunz points to a different state statute, IB 2.02(7), which outlines general policies of investment board funds.
"The board recognizes that in many countries customs, laws and their enforcement may vary from the basic human rights concepts and freedoms prevailing in the United States," the bill reads. "The investment board will seek investments in organizations which respect basic human rights and will encourage managements to respect basic human rights of their employees and clientele in any country, because such conduct is conducive to long-run success."