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PRESS RELEASEOffice of Missouri State Treasurer |
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PRESS RELEASEOffice of Missouri State Treasurer |
JEFFERSON CITY -- Missouri State Treasurer Sarah Steelman on Friday will open for the first time meetings of the State Treasurer’s Investment Committee to allow the public and press to monitor changes in the policy regulating the management of $2.9 billion in state funds the treasurer is responsible for investing. Among the first actions expected by the committee will be removing from the state’s approved broker-dealer list a firm owned by a French bank involved in the Iraqi oil-for-food scandal.
“The policies established by this committee constitute the guidelines on how billions in Missouri tax dollars are invested,” Steelman said. “I believe this process should be open so that the press and citizens can see how policies are established to invest their tax dollars.”
Following a request by Steelman made immediately after taking office, staff responsible for investing state funds identified financial institutions and broker-dealers on the state’s approved investor lists that are owned by foreign parent companies. It is from this list that state investors place deposits ranging from long-term treasury securities issued by the federal government to commercial paper and short-term repurchase agreements, commonly called “repos” where state funds are invested for as little as 24 hours.
Among the investor-brokers found on the state’s approved list of nine primary dealers through which the state places short-term investments was Paribas Capital, owned by BNP Paribas Finance Inc., a French banking organization implicated in the Iraqi oil-for-food scandal.
As of Dec. 31, 2004, the state had a $50 million rolling repurchase agreement with Paribas Capital. That amount is now $0.
Under this United Nations program, Saddam Hussein was allowed to sell oil for vouchers that were supposed to be used for food and medicine to help the Iraqi people suffering the impact of an embargo on Iraqi oil exports. After the liberation of Baghdad, the program was exposed as an international scandal in which vouchers doled out in exchange for Iraqi oil were traded for goods imported into Iraq in violation of U.N. sanctions.
“Paribas Capital will no longer be on Missouri’s list of accepted broker-dealers,” Steelman said. “Its parent company, BNP Paribas, was the sole bank administering the UN oil-for-food program with Iraq in a deal involving between $45 and $75 billion over a seven-year period. This firm has been the subject of investigations both here and in the UK regarding lax monitoring of the program, malfeasance and profiteering.”
In addition, Steelman noted that BNP has a presence in Iran, and is among a number of foreign banks that are attempting to arrange an estimated $50 billion in corporate loans in Iran.
“Foreign banking interests have the right to invest what they want where they want,” Steelman said. “As state treasurer, I will not allow Missouri tax dollars to be invested through firms owned by foreign companies that bankroll nations working against our national security interests.”
Steelman said the committee will also eliminate commercial paper investments in Tulip Funding Corp, whose parent company is based in Amsterdam, the Netherlands, and Rabobank Nederland as part of her efforts to bring Missouri investments home.
“I have made a commitment to the people of this state to put Missouri tax dollars back to work for Missouri citizens,” Steelman said. “Today is the first step in a long journey to bring Missouri tax dollars back home to best benefit the citizens to whom these dollars belong.”