Dispatch editorial: Hands off pensions

Ohio lawmakers should leave foreign policy to the federal government
Columbus Dispatch
Sunday, May 13, 2007

While members of the United Nations consider whether to pile more sanctions on Iran for its refusal to give up its nuclear ambitions, Ohio's legislature debates whether to require the state's five public-pension systems to divest holdings linked to that dangerous regime.

In March, freshman Rep. Josh Mandel, R-Lyndhurst, a Marine newly returned from Iraq, introduced House Bill 151, saying that investing Ohioans' money in Iran was "morally wrong and fundamentally risky." He received support from James Woolsey, former CIA director under President Clinton, who recently testified in favor of divestiture before an Ohio House committee.

But the General Assembly has no business dabbling in foreign policy with Ohio retirees' money. The federal government already prohibits American companies from doing business in Iran.

The five retirement funds involve significant sums: Ohio's Public Employees Retirement Fund was worth $73.5 billion for 2006, making it the 10th-largest U.S. public system and the 14th-largest fund, public or private. The State Teachers Retirement System holds $68 billion; the Ohio Police and Fire Pension Fund, $11.2 billion; the School Employees Retirement System, $10.2 billion; and the Ohio State Highway Patrol Retirement System is $753 million.

Globalization has complicated the business ties between nations. A corporation can have headquarters in one country, suppliers in five others and subsidiaries in a dozen more.

Punishing a company by divesting could unintentionally hurt Ohio employees of foreign companies. For example, Honda, which employs thousands of Ohioans, is affiliated with a motorcycle-manufacturing plant in Tehran ( www.tizro.ir).

And once the state has made a value judgment on one country and, in the process, put workers' retirement savings on the line to punish that nation, where does this thinking end?

The governments of Syria, Libya and Zimbabwe have committed some heinous acts. So have the leaders of Sudan, where government-supported militias have slaughtered 300,000 people in the Darfur region over the past several years.

Inspired by Mandel's bill, Sen. Jeff Jacobson, R-Vandalia, introduced a bill May 3 to divest pension money from companies that do business in Sudan.

China is a major abuser of human rights. Not only does it suppress free speech and the press, but it also is a major supporter of the Sudanese government. Recently, it has garnered international attention for the repugnant practice of harvesting and selling the organs of executed prisoners.

But many U.S. corporations are deeply invested in China, and Beijing is key holder of U.S. debt.

There could be times when a regime is so reprehensible or such a threat that the United States should sever all economic ties. But that is a decision to be left to Congress and the president, not 50 state legislatures.

Pension-fund managers have a duty to protect Ohioans' money until retirement and maximize returns on investments. That job is big enough. They should not be required to play complex international politics with that money, too.