Dispatch: Many had hand in divesting measure
Ohio pension funds cut investment ties to Iran, Sudan Saturday, July 28, 2007
By James Nash
THE COLUMBUS DISPATCH
By James Nash
THE COLUMBUS DISPATCH
The major players Some of the research groups and consultants with whom Ohio Reps. Josh Mandel and Shannon Jones consulted in drafting their Iran and Sudan divestment bill:
• The Center for Security Policy: Washington-based nonprofit research group associated with neoconservative movement. Advisory council includes former Secretary of Education William Bennett and former Rep. Henry Hyde.
• Conflict Securities Advisory Group: Washington-based for-profit company that maintains a database of companies that do business in Iran, Sudan, Syria and North Korea.
• Roosevelt Investment Group: New York-based "boutique" money manager that provides products and services to investors that follow divestment policies.
• American Israel Public Affairs Committee: Washington-based lobbying group with 100,000 members that advocates on behalf of Israeli security and interests.
• Ohio Jewish Communities: Columbus-based advocacy group for Jewish residents. Executive Director Joyce Garver Keller, a registered lobbyist, was in regular contact with Mandel on the bill.
Ohio Reps. Josh Mandel, a Marine veteran of the Iraq war, and Shannon Jones, a mother of two young children, both had their reasons for getting state pensions to pull their money from companies that do business with Iran and Sudan.
Mandel, R-Lyndhurst, spoke of Iran's involvement in the Iraq conflict. Jones, R-Springboro, spoke of the dangers to future generations if terrorism is allowed to go unchecked.
Together, the rookie lawmakers overcame formidable opposition to help persuade the state's five public pension systems in early June to withdraw at least half of their investments in companies connected to Iran and Sudan by the end of the year. The pensions also committed to the goal of fully divesting from those companies.
Documents and correspondence released by their offices show that Mandel and Jones didn't accomplish that feat on their own. They were aided by an array of outside groups and individuals, including Israeli and Jewish lobbyists, hawkish research groups and a growing cadre of money managers who profit from shifting money from "tainted" companies.
Those groups have successfully lobbied 10 other states to divest their pension holdings in companies that invest in hostile countries. And yet another 20 or so states are considering doing so.
Mandel said he took his cue from the Missouri state treasurer, who pioneered divestment of public-pension monies in 2005.
"We're trying to create a market for terror-free investing," Mandel said. "We're hoping to create great interest on Wall Street."
Some asset managers already see dollar signs in moves such as Mandel's. Adam Sheer, president of the Roosevelt Investment Group, flew from New York to Ohio to tout the Missouri experience.
Sheer said in an interview that although his company could get business in Ohio, he did not testify on behalf of Mandel's initiative in order to land the state's pensions as clients.
"We certainly could manage one portion of the pension fund," Sheer said, noting that his firm is comparatively small.
Documents released by Mandel's and Jones' offices show that they corresponded with several consultants in the emerging area of "terror-free" investing, such as Sheer, Boston-based State Street Corp., New York-based Northern Trust and the Washington-based Conflict Securities Advisory Group.
Jeff Glasgow, a retired assistant Franklin County prosecutor who lives in Westerville, opposed the divestment push and used the state's public-records law to get documents from the two representatives.
They turned over a box full of records, but Glasgow contends that they are withholding some documents. For example, none of the e-mail messages Mandel turned over comes from his personal account. In June, Mandel used his private account to e-mail talking points about the divestment bill to The Dispatch, including copies of testimony to legislators and a list of the companies that would be affected. Although lawmakers may use private e-mail accounts for government business, those messages are considered public records.
Glasgow said the correspondence shows that Mandel and Jones were getting advice from consultants who stood to gain from their policy.
The Ohio Retirement Study Council, a state agency representing the five public pension funds, estimates that asset managers could get up to $15 million from shifting funds out of prohibited companies.
"One would conclude that every one of those people has a vested interest in divestiture," Glasgow said. "Josh Mandel and Shannon Jones are not fiduciaries and neither are these think tanks."
Jones said she did not consult with the outside groups in drafting the divestment bill. Mandel also downplayed their involvement.
On the other hand, Chris Holton, who has headed the Center for Security Policy's divest terror initiative since 2004, said he worked closely with Mandel and his staff in drafting the bill and came to Columbus to testify on its behalf.
"We were involved in the Ohio legislative process," Holton said.
His group, which has urged pension systems across the country to pull out of companies that do business with hostile countries, didn't completely get its way in Ohio.
Mandel and Jones dropped their bill later in June after House Speaker Jon A. Husted prevailed on the pension systems to voluntarily divest. Even as they agreed to do so, pension leaders reiterated that they were loath to make any changes that could hurt pension returns.
jnash@dispatch.com
E-mail addresses:
posted by Kathie Bracy at 11:46 AM
<< Home