From Damon Asbury, May 30, 2007
Subject: HB 151
Despite extensive opposition testimony from four of the five Ohio pension systems, HB 151 was reported favorably out of the House Financial Institutions, Real Estate and Securities committee this morning. (Ohio Police and Fire has taken a neutral stance from the beginning on this bill). I testified twice on the fiduciary and financial impact issues of the divestment from companies doing business with Iran and also Sudan. The bill was scheduled for action on the House floor tomorrow, but the session was cancelled. At this time, it is not certain if the House will now meet and vote on Friday or hold the vote until next week.
The systems were successful in helping to modify the original bill by limiting the scope to foreign companies doing business in oil production, mineral extraction, power generation or military armaments. The bill sponsors estimate that divestment will involve 20 or fewer companies, but our estimate is that it might affect investments in 70 or more companies. An amendment was approved that caps system losses to 50 bps. However, that would translate to a $350 million loss before we could halt divestment activities.
We will be sending each House member a special communication outlining our concerns tomorrow morning, so that they will have a clear picture of the impact prior to their vote; however, we will now have to turn our attention to the Senate. We will communicate with our members via e-mail alert and the web page so that they can express their opinions to the Senate members.