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PRESS RELEASEOffice of Missouri State
Treasurer |
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PRESS RELEASEOffice of Missouri State
Treasurer |
JEFFERSON CITY – In a 5-5 tie vote, the board of directors of Missouri’s state employee pension plan today failed to adopt a motion by State Treasurer Sarah Steelman to sell MOSERS stock holdings in Arab Bank, which has been sanctioned by the United States Treasury Department for financial involvement with terrorist groups. The board did unanimously adopt a motion by Steelman to review its policy on screening investments for ties to terrorist activities.
“I am surprised and deeply disappointed that a tie vote by the board results in MOSERS continuing to hold investments in a bank that has been sanctioned twice by the U.S. government for ties to funding terrorism,” Steelman said. “I am pleased that the board endorsed a review of the policy that let this investment be made in the first place.”
Steelman said MOSERS current policy on terrorism investments is ineffective because it only requires staff to annually check holdings against lists federal agencies provide of companies states should not invest in. Steelman cited letters from federal agencies to MOSERS staff explaining that by law federal agencies only require companies to disclose assets and make required reports, but do not provide lists of companies in which states should not invest.
“The fact is, our terrorism policy is based on federal lists that do not exist and that will never exist,” Steelman said. “This is unacceptable because it fails to protect our citizens and our servicemen who are putting their lives on the line for freedom every day.”
In a unanimous vote, the board agreed to set up a subcommittee to review a policy change proposed by Steelman to increase protections against terrorist investments, establish more careful screenings of investments to detect terrorist ties, and to report findings of questionable holdings to the board. The board would consider final action on changes proposed by the subcommittee in July.
Steelman’s proposed policy would prohibit investments in foreign companies that have direct equity ties with governments of countries the U.S. State Department has declared to be terrorist-sanctioning states. These countries include Iran, Sudan, Cuba, Syria and North Korea. MOSERS directly holds stock in at least 10 companies that fall into this category. American companies are prohibited by law from being involved in such business activities in these countries.
A divided board, however, failed in a tie vote to adopt a motion by Steelman to immediately divest the pension fund’s holdings in Arab Bank despite federal sanctions for ties to terrorist activities. Those sanctions include stopping Arab Bank from making international wire transfers and from opening accounts or accepting deposits. In April, the Wall Street Journal reported that the New York branch of Arab Bank was instrumental in transferring more than $20 million to 45 different terrorist groups. Arab Bank is also facing an $875 million lawsuit by the family members of terrorist victims, including Marine Corps veteran John Linde, Jr., a native of Washington, Mo, who was killed in a terrorist attack in Gaza while guarding U.S. diplomats.
“We have no business using public dollars to buy stock in Arab Bank,” Steelman said. “With the proper policy, investments like this will stop, and will not be made again.”
All board members voted to review the current policy and consider changes. Board members voting to divest holdings in Arab Bank included Treasurer Sarah Steelman, former state Sen. John Russell, R-Lebanon; Sen. Jason Crowell, R-Cape Girardeau, Sen. Tim Green, D-St. Louis and John Pelzer. Board members voting against divesting Arab Bank holdings included Don Martin; Commissioner of Administration Michael Keathley; Rep. Todd Smith, R-Sedalia; Rep. Bill Deeken, R-Jefferson City; and Marsh Buckner.