Sept. 1, 2014

This Week's SFR Picks

Newsletters

Choose your newsletter(s):
* indicates required

SFR Events

Special Issues

 

 
Home / Articles / News / Legacy Archives /  Human Rights Botch

Human Rights Botch

February 20, 2008, 12:00 am
By
Thornburg pulls more money from Sudan.

In late December and early January, Gov. Bill Richardson made it clear: New Mexico shouldn’t profit off genocide in Darfur by investing in corporations conducting oil and gas business in Sudan.
***image1***
The State Investment Council and the Educational Retirement Board, under pressure from Richardson’s office, divested more than $45 million from Chinese companies that are listed by the nonprofit Sudan Divestment Task Force as “highest offenders� for financially supporting the regime in Khartoum.

However, in the same period of time, Santa Fe-based Thornburg Investment Management has increased its holdings by three times what the state divested, essentially canceling out the state’s work to clean Santa Fe of blood money.

Earlier this month, the Darfur conflict escalated with more than 12,000 Darfurians fleeing to neighboring Chad as the Sudanese government launched ground offensives and air raids against villages in Darfur.

Meanwhile, director Steven Spielberg resigned from his position as art director of the Beijing Olympics, citing China’s refusal to use its financial ties to Sudan to leverage the peace process.

In June 2007, Thornburg reported to the US Security and Exchange Commission that it had more than $482 million invested in China Petroleum & Chemical Corporation, or Sinopec Corp., a subsidiary of a Chinese corporation listed as the second “highest offender� in Sudan by the Task Force [Outtakes, Oct. 10: “Thorny Funds�].

According to Thornburg’s fourth-quarter filings, dated Dec. 31, 2007, Thornburg has increased its investment in Sinopec by $147 million, which is more than three times what the New Mexico government liquidated.
Thornburg previously told SFR that divestment, in its view, is an improper means of inducing change and argues that by holding onto its investmentsâ€"Thornburg is the fifth largest institutional holder of Sinopec stock traded on the US marketâ€"it can influence the company’s policies.

So far, there has been no indication Thornburg has taken such steps.
Instead, it seems to be capitalizing on what financial analysts at Forbes magazine are calling a “stock to watch� this year in China’s booming economy. This week, Sinopec is issuing $4.1 billion worth of six-year bonds on the Shanghai market; documentation showing whether Thornburg jumps on the investment opportunity will not be publicly available until the firm files its SEC report in March.

But Thornburg isn’t the only investment group in Santa Fe that has turned a blind eye to Darfur. New Mexico’s Public Employee Retirement Association, which manages pensions for government employees, has refused to consider divestment despite urging from Gov. Richardson [Outtakes, Oct 17: “Blood Pensions�].

“[PERA] should strongly consider following in the footsteps of the other state funds,� Richardson said in a press release issued by the Task Force in late January.

PERA has argued that the Uniform Prudent Investor Act prohibits its board from making investment decisions based on social concerns. Short of legislative action loosening the definitions in the law, PERA Executive Director Terry Slattery told SFR in the fall PERA would not touch the issue.
Richardson did not add the issue to his legislative agenda and, with the session over, very little can be done to the law until 2009. But the governor’s office disagrees with PERA’s assessment.

“The State Investment Council, the Educational Retirement Board, and the Public Employee Retirement Association are required to follow the same high standards of investment,� the governor’s deputy communications director, Allan Oliver, tells SFR via e-mail. “In our view, PERA could responsibly divest from Sudan without legislation, while upholding Uniform Prudent Investor standards.�

 

comments powered by Disqus
 
Close
Close
Close