State Capitol News
10:11 pm
Mon March 10, 2008

New bill forces Arizona to divest Sudan investments

Phoenix, AZ – The state's retirement systems are going to have to get rid of
any investments they have in companies that do certain kinds of
business in Sudan -- unless it costs too much. Arizona Public
Radio's Howard Fischer explains.

The measure signed into law Monday requires the funds to divest
their portfolios of the stock in any company involved in mining,
petroleum or power production in Sudan, or selling the country
certain military hardware. Rep. Kyrsten Sinema said the aim is to
penalize those companies whose business practices prop up the
Sudanese government and its genocide of people living in the
Darfur region. But the legislation says fund managers don't need
to divest if selling the stock would reduce the value of an
account by more than one quarter of one percent. Sinema said that
language is legally necessary.

(The constitution requires that our pension funds make
investments in the best fiduciary interests of their
shareholders. And so this fail-safe was designed by
constitutional attorneys at the national level to make sure that
states honor that commitment to their constitution. Because a
number of other states also have the same kind of constitutional
requirement.)

But Sinema said she doubts the provision will be a problem. She
said 23 other states have similar laws and have been able to sell
off their investments without hitting that same trigger.

For Arizona Public Radio, this is Howard Fischer.