Drive builds to divest in firms with business relations in Sudan

PROVIDENCE - Rhode Island may soon join the growing list of states pulling public pension money out of companies that do business with the Sudanese government.

By investing in companies that, at best, decline to deter genocide, and at worst, actively assist it, Rhode Island is also complicit in the genocide, backers of Sudan divestment say.

"This is not just a problem for strangers on the other side of the planet," Rep. Joseph S. Almeida, who sponsored the bill along with fellow Providence Democrat Sen. Rhoda E. Perry, said at a news conference yesterday.

For nearly four years, government-backed militias have been targeting non-Arabs in the Darfur region, in the south of Sudan, killing, raping and burning villages. The conflict has killed 400,000 and displaced more than 2 million, according to a bill passed by Congress in September. The atrocities persist despite peace agreements, cease-fires and sanctions by foreign governments.

If the General Assembly approves divestment, "It will demonstrate that Rhode Island will not stand idly to the side" as the violence continues, said Scott Warren of the Brown University group Students Taking Action Now Darfur.

When the Assembly considered divestment last year, Paul J. Tavares, the state's general treasurer at the time, expressed reservations, saying he supported its spirit but feared it might hurt the performance of the pension fund. This year, newly elected General Treasurer Frank T. Caprio is not only on board but requested the bill's introduction himself and posted a video on the Web site YouTube to inform people about divestment.

Caprio's office has already analyzed the state's portfolio and found that the bill would affect about $2 million invested in two companies: Petronas, an oil and gas company owned by the Malaysian government, and Rolls-Royce, the U.K.-based multinational corporation that makes, among other things, aircraft engines, ship engines and infrastructure for the energy industry.

Petronas holds a contract with the Sudanese government that includes refueling the very government airplanes used to bomb villages in Darfur, according to Peter Kerwin, spokesman for Caprio's office. Kerwin said Rolls-Royce has sold to the government equipment used in the oil industry.

The state relied on a list from the Darfur Action Network, a coalition of campus groups with full-time staff in Washington, of "companies warranting scrutiny" - essentially companies that have government contracts in Sudan or do business in the country's oil and energy industries - and a shorter list of "offending companies" for which the coalition recommends divestment because of explicit or complicit participation in genocide.

The bill would require the state to sell at least 50 percent of holdings in the offending companies within 9 months of the company's designation as such and 100 percent of holdings within 15 months.

Because the bill would require the redistribution of just a fraction of a percent of the state's $7.9-billion pension investments, Caprio said he doesn't share Tavares' worries about divestment hurting the pension fund's performance. In fact, proponents of divestment say the state might actually lose money if it doesn't divest, because the targeted companies' stock could decline in price as the divestment movement gathers momentum.

Six other states have adopted divestment measures: California, Connecticut, Illinois, Maine, New Jersey and Oregon. Multiple universities and municipalities have also approved divestment; New York City is considering it.

The amount of money at stake in Rhode Island is paltry compared to the $725 million in investments that would be affected in New York City, as reported by The New York Times. But action in Rhode Island will contribute to "a slow bleeding away of funding for the regime" in Sudan, state Rep. David Segal, D-Providence, said yesterday.

During Segal's time on the Providence City Council, the council approved divestment, making Providence the first city in the nation to require pulling money out of such investments.

"If fewer bullets are bought," Segal said yesterday, "we will be doing a good thing."

Almeida's bill has been referred to the House Finance Committee, which will hold a hearing and take public testimony next Wednesday.