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INTRODUCTION
Starting in 2007, members of the Ohio General Assembly
drafted legislation that would require Ohio's five public-employee pension funds to divest from selected business that are engaged in Iran. On June 7, 2007, the executive directors of the five Ohio retirement systems gave a commitment to Jon Husted,
Speaker of the Ohio House of Representatives, that they would develop a sound fiduciary divestment-from-Iran-and-Sudan policy. This June 7th letter did not challenge either the effectiveness, the usefulness, or the fairness of injecting a political agenda
into the pension funds' investment policies. Nor did the letter mention the various down-side aspects of divestment in this instance. The five Ohio retirement systems are:
Based on news reports and telephone inquiries, this taxpayer mailed letters during June 2007 to all board members and directors of the five retirement systems. In the letter, I noted that economic warfare (divestment) against the people of Iran was a mean thing to do and that Iran has a nuclear electric-energy program, not an atomic-bomb program. An expanded version of the arguments made in this letter is on web page [X] IRAN'S NUCLEAR ELECTRIC-GENERATION PROGRAM AND AMERICA'S INTERESTS.
Needless-to-say, in 2007, there was a high level of interest and dialogue on the divestment-policy issue. Still, Constance Ramser, then chair of the Board of Trustees of the State Teachers Retirement System of Ohio (STRS), took time to acknowledge my letter by explaining that STRS was opposed to any divestment legislative mandate and that STRS planned to adopt a voluntary program which did not hinder returns on investments.
Almost a year later, after the dust had settled, I sent a follow-up letter to Ms. Ramser offering three recommendations. By this time, Ramser was no longer chair of the board. A reformatted copy of my May 14th letter is shown below.
++++ Start of open letter to Constance Ramser ++++
Ms. Constance Ramser, member. . . . . . . . May 14, 2008
Board of Trustees
State Teachers Retirement System of Ohio
(STRS)
275 East Broad Street
Columbus, OH 43215-3771
Ref.: Divesting from Iran-related Companies
*** AN OPEN LETTER ***
Dear Ms. Ramser:
Thank you for your informative letter of June 26, 2007 regarding the STRS Ohio
Board's consideration of new policy on divesting from companies doing business in Iran. Because of subsequent events, I am writing to express serious concerns about the Board's new divestment policy and the adoption procedure.(1) Following this, three
recommendations are given.
Divestment Policy
An explanation of why the Israel lobby's goal of promoting a hostile relationship between the U.S. and Iran is contrary to America's national interest is explained on my web site:
www.billbuckel.com. Under ACCENTED PAGES, click on [X] IRAN'S NUCLEAR ELECTRIC-GENERATION PROGRAM AND AMERICA'S INTERESTS. Incidentally, this is not the first time the Israel lobby has been active in the Ohio General
Assembly. Another instance occurred in 2002.(2) And, this conflict of special interest groups is to be expected in a legislative body.
One intended impact of the divestment policy is to slow the growth of the Iranian economy which is not very strong to begin with. A 2004 estimate of per capita GDPs was: Iran = $7,700 and U.S.A. = $40,000.(3) "Between 1996 and 2000, the average annual addition to the labor force [in Iran] was 744,000, while the economy created only 590,000 jobs during the 1990's as a whole."(4) In this instance, divestment is a form of indiscriminate punishment.
Another intended outcome of the Israel-lobby-backed Iranian divestment program is to induce hostility between the U.S.A. and Iran. Active and retired STRS members, who are not aligned with Israel lobby, are very likely to support activities that promote friendly (not hostile) relations between the U.S.A. and Iran.
Policy Adoption Procedure
Integration of a political agenda into your full
investment policy not based on inside concurrence, but rather outside pressure ("legislation currently under consideration by the Ohio General assembly") is setting a very bad precedent.(1) It is an invitation for more of the same in future years.
Had the polling results aligned with the outside pressure, the negative precedent would have been avoided. Secondly, adopting the new investment policy without polling the retirement-system clients is an insult to their legitimate interests. Polling
results would have given the Board the best possible guidance prior to its policy adoption decision.
Recommendations
Given the current situation, my three recommendations follow:
#1. Reconsider the decision process the Board uses
to decide whether or not to inject a political agenda into the investment policy. As a matter of courtesy, your Board should consider creating a pro-and-con forum followed by a polling of the active and retired members.
#2. Let your members know
how candidates for the Ohio General Assembly stand on the issue of politically-directed investment policies. One option is to send a non-partisan open-to-the-public questionnaire to all candidates running for a seat in the Ohio Legislature this November.
Introduce each question with a background statement. One of the questions might be: "Under what conditions, do you think the Ohio General Assembly should dictate a political agenda to the investment policies covering Ohio's five public employee pension
plans?" After the responses to the survey are tabulated, inform active and retired members, as well as the participating candidates of the results.
#3. Include in any future political-agenda investment policy a requirement to communicate
periodically to the target of the policy with a progress report and a request for feedback. This would insure that the good-intentions of the policy are in fact continuing to do good as time passes. For example, in STRS policy section "Termination of the
Policy", subsection "Iran" lists: "a) Congress or the President of the United States determined that the government of Iran has ceased to acquire weapons of mass destruction and support international terrorism;" [underline added] (1) The November
2007 National Intelligence Estimate said under Key Judgements, "A. We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program."(5)
Sincerely,
Bill Buckel, Ohio taxpayer
1641 Hess Blvd.
Columbus, OH
43212
. . Ph. 614--488-8963(H)
. . W.P. www.billbuckel.com
cc:
Other members of pension fund boards
Legislators
Press &
Misc.
REFERENCE NOTES
(1) STRS-Ohio policy on "Iran and Sudan Divestment Policy and
Program", effective October 18, 2007.
(2) In April 2002, two resolutions related to Israel/Palestine were introduced in the Ohio Senate.
** S.R. 1881 (one-sided support of Israel) passed 28 to 4. [Voting "No": Brady, Furney, Mallory, and
Shoemaker]
** S.R. 1910 (support of the U.S. in its Mideast peace initiatives) passed 25 to 7. [Voting "No": Carnes, Coughlin, Fingerhut, Goodman, Jacobson, Jordan, and White] In this instance, 78 percent of the Senators were willing to put America's
interest above that of Israel.
(3) 2006 edition of the Time Almanac, per capita GDP in 2004 is estimated at: Iran = $7,700 (page 791) and U.S.A. = $40,000 (page 895)
(4) From the summary of "Financing Job Guarantee Schemes by Oil Revenue:
the Case of Iran", by Zanra Karimi, Working Paper No. 527, The Levy Economics Institute of Bard College, Report April 2008. For the complete text see: www.levy.org/pubs/wp_527.pdf.[X]
(5) National
Intelligence Estimate, Iran: Nuclear Intentions and Capabilities, by the U.S.A. National Intelligence Council, November 2007.
++++ End of open letter to Constance Ramser ++++
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Address:
Bill Buckel
1641 Hess Blvd.
Columbus, OH 43212
. .Ph. 614--488-8963
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return address.
URL = http://www.billbuckel.com
Up-dated: June 11, 2008