Contribute

inFOCUS Quarterly

Spring 2014

Borders, Nations and Conflict

New Media

Facebook   Twitter   RSS
Join Mailing List   Android App

The JPC on JPC on Twitter

Why divestment is a lousy deal for the retirees who are funding it.

Reader comment on: Let States Divest From Iran
in response to reader comment: Iran Divestment

Submitted by Jeffrey L. Glasgow (United States), Sep 1, 2007 18:36

What I think your have shown proves my point. If there are a number of stocks on the SEC list that are good investments and terror free, why should the free market make them purchasable. In fact, if they are so very good, a prudent investor would be required, by his fiduciary duty to his beneficiaries, to invest in them if they provide the best return. What mandated divestment does is to create a market for "terror free" funds that are not able compete with generally available funds, absent coercion by a mandated divestment statute. This is absolutely proven by the centerpiece of every single piece of divestment legislation--the abrogation of the fiduciary rule. Ohio's divestment bill, HB 151 contains Section 137.08 which immunizes fund managers from suits against them for breach of fiduciary duty if the divest in accordance with the statute "in good faith." It continues and indemnifies these same managers for similar losses, and, adding insult to injury, takes the indemnification payments from the fund itself. Senator Obama's legislation is sufficiently similar as to be indisinguishable. These immunity and indemnity provisions are a complete admission that divestment will harm fund beneficiaries.

It is intersting that you identify the Roosevelt Fund as an example of why divestment is a good thing. Adam Sheer, from the Roosevelt fund, seems to have a marketing position by testifying in Ohio, and I suspect other states, in favor of mandated divestment. Likewise, the Conflict Securities Advisory Group is travelling from state to state testifying in favor of divestment. It should not surprise you that the Conflict Securities Advisory Group is a business that maintains a database of "scrutinized' corporations and will, of course offer its services to identify tainted stocks. While it provided its services for free during the Ohio debate, the payoff will, I am sure, come later. In Missouri, where the tiny Missouri Investment Trust is touted as an analogue to multi-billion dollar pension systems, it should come as no surprise that Conflict Security Advisory Group has a contract with the fund's advisor, the service fee for which is to be included in the advisor's fee to the trust. (and, of course, the beneficiaries)

I am awaiting your explanation of why this is such a good deal for me and millions of retirees.

Jeff Glasgow


Note: Comments are screened, and in some cases edited, before posting. This site reserves the right to reject anything found to be objectionable.

Jewish Policy Center replies:

Jeff - Here's the rub. If other state pension funds and patriotic Americans begin to divest from Iran, it becomes the pension funds' fiduciary responsibility to divest before the stocks lose their value. As long as the divestment movement continues to gain steam (and it will, whether I write about it or not), the stocks will go down. But there is still time. So, make sure your pension fund stays ahead of the curve.

Also, try to remember that this is a very small list of stocks. There are so many other excellent equities out there. Why go with the ones that work with terrorist states?

Submit a comment on this article

Other reader comments on this item

TitleByDate

Iran Divestment
[w/response by The JPC] [151 words]

Jeff Glasgow 

Sep 1, 2007 17:54

  ⇒ Why divestment is a lousy deal for the retirees who are funding it.
[w/response by The JPC] [385 words]

Jeffrey L. Glasgow 

Sep 1, 2007 18:36

  Response to Jewish Policy Center
[w/response by The JPC] [406 words]

Jeffrey L. Glasgow 

Sep 1, 2007 20:44

  Reply to Policy Center Reply of September 2, 2007
[w/response by The JPC] [389 words]

Jeffrey L. Glasgow 

Sep 2, 2007 12:00

  Response to Mr. Glasgow [362 words]

Howard Slugh 

Sep 2, 2007 21:38

  Last Post [1341 words]

Jeffrey L.Glasgow 

Sep 3, 2007 12:18

Comment on this item

Name
Email Address (optional)
Title of Comments
Comments:

Note: Comments are screened, and in some cases edited, before posting. This site reserves the right to reject anything found to be objectionable.

Follow the Jewish Policy Center

Facebook   Twitter   RSS   Join Mailing List   Android App

Make your tax-deductible contribution to the JPC today

The Jewish Policy Center is a not-for-profit, non-partisan, 501(c)3 organization.
The opinions expressed in the pages of this website do not necessarily reflect the views of the Jewish Policy Center, its board, its members, or its staff.