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Bloomberg: Schwarzenegger Signs Bill Banning Pension Fund Money in Sudan

By Michael B. Marois

Sept. 25 (Bloomberg) — California Governor Arnold Schwarzenegger signed a law banning the state’s two public pension funds, with $350 billion in assets, from investing in companies that do business in Sudan.

The law prohibits the California Public Employees’ Retirement System, the largest U.S. public pension fund, the California State Teachers’ Retirement System, the second-largest fund, and the University of California Regents from investing in any company with active business operations in Sudan. The law also forbids the funds from investing in a company that supplies military equipment within the borders of Sudan.

California becomes the largest state to divest its Sudan holdings since the United Nations in 2004 described the war in the African nation’s western Darfur region as the world’s worst humanitarian crisis. Public pension funds in New Jersey and Illinois last year agreed to divest their holdings in any foreign companies that do business in the war-torn country.

“As more states begin to adopt such actions, we just might take a giant step forward in ensuring that a government that systematically eliminates its citizens, at the very least, doesn’t profit from it,” actor George Clooney said at a ceremony in Los Angeles where the law was signed.

The war erupted in February 2003, when rebels from minority tribes revolted against the Sudanese government, accusing it of discrimination. The rebellion led to murder, rape and torture by the government and allied Arab tribes that has left an estimated 400,000 dead and displaced more than 2 million people.

Vote in May

The California public employee fund, with $210 billion in assets, in May voted not to invest in nine companies that have operations in Sudan. Those companies were Bharat Heavy Electrical Ltd.; China Petroleum and Chemical Corp.; Nam Fatt Corp.; Oil & Natural Gas Co.; PECD Berhad; PetroChina Corp.; Sudan Telecommunications Co.; OAO Tatneft, and Videocon Industries Ltd.

Calpers, as the fund is known, has said it knows of at least five of its investments are with companies that have ties to Sudan. They are ABB Ltd., the world’s biggest maker of power transformers; Alcatel SA, the world’s largest provider of broadband Internet gear; Total SA, Europe’s largest oil refiner; Royal Dutch Shell Plc, Europe’s second-largest oil company; and Siemens AG, Europe’s largest engineering company.

The state teachers fund, with $144 billion in assets, voted in April to sell $13.7 million of stocks in companies with business ties to Sudan to protest human-rights abuses in Darfur.

Democratic Rival

The pension funds have come under pressure to sell stock in companies with ties to Sudan by Schwarzenegger’s Democratic opponent in the November election, state Treasurer Phil Angelides, who sits on the governing board of both pension funds.

California’s state-run pension funds have a history of using pressure on corporations. In the late 1980s, they cut off new investments in businesses with ties to South Africa to pressure the apartheid policies of the government.

After the collapse of companies including Enron Corp., they stepped up pressure on those businesses that were seen as having inadequate corporate governance practices by withholding votes from directors.

To contact the reporters on this story: Michael B. Marois in Sacramento at [email protected]. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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