A special state board meeting held Wednesday morning, prompted by a letter from Gov. Gretchen Whitmer, resulted in the state of Michigan adopting a policy of disinvestment from Russian and Belarusian companies.
Russia President Vladimir Putin, backed by Belarus, launched a full-scale military invasion on Ukraine in late February. The continuing assault has led to strong backlash and economic sanctions from many countries, including the United States.
In a March 1 letter, Whitmer called on the State of Michigan Investment Board to hold a special meeting with the objective of divesting from any institutions and companies based in Russia.
Gov. Gretchen Whitmer delivers her fourth State of the State speech, Jan. 26, 2022 | Screenshot
“These heinous attacks are aimed at overthrowing Ukraine’s democratic government and violate international law,” Whitmer wrote. “Since then, the federal government and our international allies and partners have announced significant sanctions targeting Russian financial institutions, state-owned enterprises, and other government-related activities.
“Michigan supports these national and international sanctions and should align our state-level actions,” Whitmer continued.
With a unanimous vote Wednesday from members, the investment board approved a policy of disinvestment from Russian and Belarusian companies. The disinvestment will begin “as soon as practical when market conditions allow.”
The investment board was created via executive order in 2018 by former Gov. Rick Snyder, in line with his shift of the state pension plan’s governance structure to a board model. Snyder shifted fund investment responsibilities from the state treasurer to the new, three-panel board of appointed individuals with investment/financial experience.
Currently, there are just two appointed members: Reginald Sanders of Portage, whose term expires in November, and Dina Rihard of Northville, whose term expires in November 2024. State Treasurer Rachel Eubanks serves as chair and state Budget Director Chris Harkins also serves on the board.
Eubanks noted in the meeting that the state board is “fortunate as an entity in that our exposure here [to Russian institutions] is very limited,” coming out to just .06% of the State of Michigan’s Retirement Systems (SMRS) pension plans’ $98 billion portfolio.
There are no Belarusian holdings in the SMRS portfolio.
“Any state assets that could be used to support and prolong Russian’s war against Ukraine runs contrary to the purpose of providing benefits to individuals who dedicate their professional lives to public service,” Eubanks said.
The SMRS provides benefits to active and retired individuals who have worked for the state of Michigan. All relevant investment managers are set to receive formal letters requesting swift divestment from any Russian investments.
Whitmer thanked Eubanks and the board for taking the unanimous action, adding that it is “a signal to the world that Michigan stands firmly in solidarity with Ukraine.”
Michigan lawmakers on both sides of the aisle have also taken steps to show solidarity with Ukraine in recent weeks. State Sens. Stephanie Chang (D-Detroit) and Paul Wojno (D-Warren) introduced a resolution last week condemning Russia and urging the “world community” and United Nations to issue further sanctions against the country. That measure was adopted by the chamber unanimously.
State Rep. Darrin Camilleri (D-Trenton) also introduced new legislation adding Russia to the list of countries in Michigan’s Divestment from Terror Act; state Rep. Jeff Yaroch (R-Richmond) asked Whitmer to direct the state to halt all purchases of Russian liquor; and state Rep. Graham Filler (R-DeWitt) led the adoption of a resolution condemning Russia’s invasion.
At the federal level, U.S. Rep. Peter Meijer (R-Grand Rapids) sent a letter to President Joe Biden urging his administration to “invoke existing authorities to investigate, seize, and sanction assets belonging to Russian oligarchs and kleptocrats who are complicit in Vladimir Putin’s tyranny and acts of crime and corruption around the world.”
authored by Laina G. Stebbins
First published at https%3A%2F%2Fmichiganadvance.com%2F2022%2F03%2F09%2Fstate-board-oks-divesting-michigan-from-russian-belarusian-investments%2F
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