EXPLAINER: Minnesota to divest from Russia over war in Ukraine | Minnesota News

0

By STEVE KARNOWSKI, Associated Press

ST. PAUL, Minn. (AP) — The Minnesota state government will divest its assets in Russia to show solidarity with the people of Ukraine, a bipartisan expression of moral outrage that supporters say is worth it.

The Minnesota Senate voted 67-0 on Tuesday to demand that the state sell its investments in Russia and neighboring Belarus, which has backed Russia’s month-long war in Ukraine. These assets are mainly held by state public employee pension funds.

“It is extremely important that we show Ukraine that we are on their side by joining an ever-growing number of democracies in resisting the atrocities that are happening in Ukraine,” said the bill’s lead author, Senator Republican Karin Housley of Stillwater, who was dressed in Ukrainian blue and yellow.

The unanimous vote, which followed unanimous approval in the House last Thursday, sends the bill to Democratic Gov. Tim Walz for his signature. Here is an overview of the issues involved:

political cartoons

Minnesota is one of many states across the country to join the movement to put additional economic pressure on Russia on top of sanctions ordered by the federal government and other countries opposed to the war in Ukraine.

The effect of sanctions imposed by US states often pales in comparison to national and international sanctions, but states are doing what they can.

The Ukrainian American Community Center in Minneapolis says about 17,000 Ukrainians reside in Minnesota, from recent immigrants to third-generation Ukrainian Americans.

Democratic Senator Kari Dziedzic, whose northeast Minneapolis district is the historic heart of the local Ukrainian American and Eastern European community, said Ukrainians have known freedom and democracy since their country became independent in 1991.

“They don’t want to go back,” said Dziedzic, a granddaughter of Polish immigrants. “They want to stay independent.”

The Minnesota Public Employees Pension Fund had about $53 million in investments in Russia before its invasion of Ukraine. The value of those investments has fallen to less than $10 million, Democratic Rep. Sydney Jordan of Minneapolis said during the House debate last week.

But Republican Senator Mary Kiffmeyer of Big Lake said those holdings “are essentially worthless right now.” You can’t sell them, you can’t buy them. She said the wording of the bill also protects the interests of retirees.

“Pensioners don’t want to fund their retirement after the bloodshed,” Housley said.

Divestment should not cost the state much more than what state investments have already lost in value since Russia invaded Ukraine a month ago.

And they represent only a small portion of the state’s overall portfolio, which is controlled by the Minnesota Board of Investment. The council managed assets with a market value of $135.7 billion as of December 31 and has consistently earned high rates of return in recent years, including 18% last year for its largest combined pension fund.

The bill requires the board to liquidate all directly owned and publicly traded assets of companies and government entities that have their principal establishments in Russia and Belarus. To the extent possible, the board should liquidate half of these assets within nine months of the August 1 effective date, and all within 15 months of that date.

There are exceptions for any assets that have been excluded from federal sanctions, such as businesses providing humanitarian goods and services. The board of directors does not have to dispose of indirect holdings, for example through mutual funds, but managers of state funds must ask these funds to offload all Russian and Belarusian securities they hold .

Walz backs the legislation, which follows an executive order he signed earlier this month that bars the state government from doing business with Russian companies and ordered more than two dozen agencies to terminate their contracts.

Copyright 2022 The Associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share.

Comments are closed.