Thursday, December 2, 2021

Liberal Oregon resists ditching dubious investments

Salim, Oregon (AP) – Oregonians are increasingly pushing the state to ditch fossil fuel companies and other controversial investments, but the state treasury is resisting and shifting the burden of responsibility to the legislature.

In addition to fossil fuel companies, whose products are a major driver of global warming, a government employee retirement fund is also investing in a company whose spyware has been used against human rights defenders, journalists and other targets, as well as in companies that operate private prisons that contain prisoners. immigrants were mistreated and some of them died.

Despite the fact that some cities and other states, such as New York, have begun to divest from assets, Oregon, a predominantly liberal state, maintains the status quo. Incomparable approaches emphasize that public fund managers are often torn between ethical considerations, legal imperatives and obligations to beneficiaries.

The Oregon Treasury controls an estimated $ 130 billion in investments, including undisclosed amounts in fossil fuel companies and other contentious sectors. Oregon Treasurer Tobias Reed did not learn of the amount, despite repeated direct questions from Oregon Public Radio.

“It’s not just public stock, it’s also private equity, it’s also bonds,” said Reed, a Democrat running for governor in the 2022 election. “So we buy and sell bonds literally every day. So everything changes. “

Susan Palmiter, co-director of Divest Oregon, said partial data show that Oregon has invested billions of dollars in fossil fuels.

“There is a transparency issue at the Treasury,” Palmiter said. Why doesn’t the Oregon Treasury have this data on all of its investments publicly available?

In a letter to House Speaker Tina Kotek and Senate President Peter Courtney Reed and other Oregon Investment Council members, they said they could not push for the sale of assets because state law states that investments must “make money as productive as possible.”

They said the legislature should change laws and warned that lawmakers may have to dig into the state’s general funds to cover any losses from the sale.

“When we exit an investment, we do so for performance reasons, not for political or personal reasons,” Reed and four other OIC members wrote in their October 25 letter.

Koteka, who is also the Democratic gubernatorial candidate, was unimpressed.

“Speaker Kotek … supports fossil fuel phase-out strategies in Oregon’s public funds,” her spokesman Danny Moran said in an email Friday. “She’s disappointed that Treasurer Reed’s letter appears to confirm his support for the status quo.”

Most of the stock in Oregon is focused on fossil fuels, and groups such as Divest Oregon and 350PDX are pushing to fight climate change. Asset divestors say there is also a financial incentive as the offering value of fossil fuel stocks falls.

Several organizations in the state are moving in this direction. For example, Reed College in Portland announced last month that its roughly half-billion dollar contribution will not include any new investments in the oil, gas and coal industries, and that all existing investments will be phased out.

Less public scrutiny has been given to the government employees’ pension fund investment in NSO Group, an Israeli company that makes spyware that allows a customer to sneak into a target’s smartphone and see emails, texts, photographs and activate their microphone and camera.

Victims include Amnesty International human rights observers, journalists, politicians and the fiancee of Washington Post columnist Jamal Khashoggi. He was killed and dismembered at the Saudi Arabian consulate in Istanbul in 2018. In 2019, Facebook sued NSO Group for hacking its WhatsApp messaging app.

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On Tuesday, Apple announced that it is suing the NSO Group, calling its employees “immoral mercenaries of the 21st century.” Apple said NSO Group’s Pegasus spyware was being used against some of Apple’s customers around the world.

On November 3, the US Department of Commerce announced that NSO Group and another Israeli company, Candiru, were added to its trade blacklist because they “developed and supplied spyware to foreign governments who used these tools to maliciously attack government officials, journalists and so on. businessmen, activists, scientists and embassy staff. ”

“These tools have also allowed foreign governments to carry out transnational repression,” the Commerce Department said.

The NSO Group says it only sells access to Pegasus to “trusted government agencies” for use against terrorists and big criminals. Reed’s office did not respond to a request for comment on whether he believes investing in a U.S. blacklisted company is still a good investment.

How Oregon first got into this situation began in 2017, when executives from London-based private equity firm Novalpina Capital came to look for their first major investors.

“We have to find deals that other people don’t see or want to do for a variety of reasons,” Stephen Peel, founding partner of Novalpina, told Oregon Investment Council members at their office in the Portland suburb.

The council allocated $ 233 million to Novalpina Capital, which later acquired a controlling stake in NSO Group.

Since then, the founding partners of Novalpina Capital have engaged in a violent internal dispute that has resulted in investors stripping them of their control over the private equity fund. It is currently operated by the Berkeley Research Group, said Oregon Treasury spokeswoman Rachel Rae. The company positions itself as a global consulting firm that assists in disputes and investigations, corporate finance and efficiency gains.

Ray said she could not comment further “due to our status as a limited partner” and that inquiries should be directed to Berkeley Research Group. The company, based in Emeryville, California, did not respond to requests for information.

Opponents of the sale argue that the funds will lose all leverage over the companies they are associated with. Reed and members of the investment council told Kotek and Courtney that the sale of the assets is “an ineffective tool for real impact.”

Reed attempted to exploit this shareholder influence when, in January 2020, he and Oregon Attorney General Ellen Rosenblum called for corrective action by the boards of directors of two companies, CoreCivic and the GEO Group, which operate detention centers under federal government contracts. Reed and Rosenblum raised concerns about health and safety and said boards of directors have neglected their fiduciary responsibilities.

If Oregon lawmakers try to make it easier to use assets to combat climate change, it will most likely happen no earlier than 2023, when the Legislature meets in a longer session.

The 2022 session will only last about a month, giving little time to push complex legislation through the legislative process, said Robin Yeh, chief of staff for Oregon State Representative Khan Pham, who is among lawmakers looking for ways to tackle the climate crisis. including by selling.

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Follow Andrey Selsky on Twitter at https://twitter.com/andrewselsky.

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