Shapiro to re-introduce terror-free investing legislation

By THE OFFICE OF STATE REPRESENTATIVE JOSH SHAPIRO

HARRISBURG, April 21 – State Rep. Josh Shapiro, D-Montgomery, today held a press conference on his proposed terror-free investing legislation, which would prohibit Pennsylvania’s two pension funds, PSERS and SERS, and the Treasury from investing in foreign companies with significant business activities in Iran and Sudan. Shapiro also today circulated a co-sponsorship memo to his colleagues to sign on as co-sponsors of his legislation.

Shapiro has been leading the effort to divest Pennsylvania’s pension funds from companies doing business with state sponsors of terror since 2007. The state House overwhelmingly passed, by a 185-15 vote, Shapiro’s nearly identical terror-free investing legislation in June 2008. Shapiro has also led the Tobacco Settlement Fund to invest terror-free through the passage of a resolution in February 2009 that prohibits Pennsylvania’s Tobacco Settlement Investment Board from investing in foreign companies tied to Iran and Sudan.

According to Shapiro, there is new evidence that the Commonwealth could realize stronger returns by investing terror-free. Last year, FTSE Group, a global indexing company, partnered with Conflict Securities Advisory Group to create three index funds that screen out companies that have business activities in state sponsors of terror. When compared to the FTSE All World Fund, an index that included foreign companies with ties to Iran and Sudan, terror-free funds have yielded 50 percent in returns over the past five years, while the All World Fund has yielded only 18 percent in returns.

“While it is a moral imperative that we divest from companies that do business with terror-sponsoring nations, during these tough economic times, we must do all we can to protect and strengthen our investments,” Shapiro explained. “It makes practical sense that a company’s association with terrorism and human rights abuses creates risk and could undermine the value of the Commonwealth’s investment in such a company.”

“I am proud to stand with Representative Shapiro to help raise awareness of the terror that still reigns over many regions of the world,” said State Treasurer Rob McCord. “No one should deny the financial risk associated with investing in these regions. Indeed, as we use economic power to fight terrorism, we are also serving as prudent investors- we are reducing risk and protecting returns.”

“It is our moral responsibility to ensure that hard-working Pennsylvanians’ pension investments and tax dollars are invested responsibly in companies that have no ties to terrorist regimes, such as Sudan and Iran,” House Majority Leader Todd Eachus said. “That is why the House Democratic Caucus stands firmly in favor of this legislation. I commend Rep. Shapiro for his efforts on this issue, and I vow to move this legislation forward with the goal of swift passage in the House.”

Terror-free investing is also gaining support across the country. In 2007, the U.S. Congress approved a measure to authorize states to take divestment action on companies with ties to Sudan. A similar bill targeting Iran was also passed by the U.S. House of Representatives. Eighteen states and 23 cities have adopted divestment legislation.
Shapiro represents the 153rd Legislative District in Montgomery County. For more information, visit www.pahouse.com/Shapiro.

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