Trading With the Enemy

PA pension funds unwittingly help finance terrorist states

Vladimir Ilyich Lenin once boasted that when communism ultimately triumphed over free market societies the capitalists would trip all over themselves to sell the rope to be used in their own hanging. Lenin was wrong, of course, and with a strong nudge from Ronald Reagan, the Soviet Union ended up on the ash heap of history. However, Lenin’s words may be prophetic when it comes to the war on terror – and Pennsylvania’s public pension funds may be among the top contenders to “sell the rope” that will hang us.

It turns out three of the largest public pension funds in Pennsylvania are investing billions of dollars in companies that do business – and therefore contribute to the economies – of U.S. State Department-designated terrorist-sponsoring nations. The Pennsylvania State Employees Retirement System (PSERS) has invested more than $3 billion in 145 companies with ties to terrorist-sponsoring states, 22% of its investment portfolio. The Pennsylvania Public School Employees Retirement System (PPSERS) has likewise invested over $3 billion (17% of its portfolio) in retirement savings from the commonwealth’s public school teachers in companies that do business with terrorist-sponsoring nations. And in Philadelphia, the Board of Pensions & Retirement (PBPR) as invested over $172 million in 56 companies propping up the economies of terrorist-sponsoring states.

These startling statistics are contained within the Center for Security Policy’s latest report: Terrorism Investments of the 50 states. The Center (www.DivestTerror.org) touts the report as “the first national security-based statistical analysis of the investment patterns of America’s public pension funds.” It found the nation’s largest public pension funds have invested over $1 trillion in stock alone in companies that do business in terrorist-sponsoring states. The particular terrorist-sponsoring nations studied for purposes of this report are Iran, pre-liberation Iraq, Libya, North Korea, Sudan, and Syria – essentially the “axis of evil” outlined by President Bush when he declared the war on terror back in 2001.

As a result of the investment of retirement funds working on behalf of Pennsylvania’s state employees, our public school teachers, and City of Philadelphia employees, these companies are helping to prop up and expand the economies of terrorist-sponsoring states. Thus, the retirement investments of everyone from Governor Ed Rendell on down are helping to fund the other side in the war against terror.

The terrorists must be having a good laugh at our response to their attacks, and planned attacks on our nation. First, official Washington is falling all over itself to implement the 911 Commission’s absurd “solution” to the bureaucratic bungling that lead to the intelligence failure that resulted in the September 11, 2001 by creating an even bigger bureaucracy. Yeah, another government agency and a new seat at the cabinet table will certainly cause Osama bin Laden to cower in fear. In the meantime, our public pension funds continue to invest in companies which do business in the very states which our own government has identified as aiding and abetting terrorists.

There is ample precedent for boycotting companies that invest in nations that do not act appropriately on the world stage. The most successful example of such an effort is the South African divestment campaign of the 1980’s which brought an end to the reprehensible practice of apartheid. Given the fact we know which nations harbor, train, or financially support terrorist organizations, it only makes sense to cease investing in companies which do business with those nations. Senator Frank Lautenberg (D-NJ) put it best: “It is . . . unconscionable for our country’s public pension systems to permit investment in companies that provide revenues, advanced equipment, and technology to countries that threaten our vital security interests.”

It is time for Pennsylvania’s public pension systems to step up to the plate and do their part to help win the war on terrorism. These systems should immediately divest of stock or any other type of holdings they may have in all companies that do business in a terrorist-sponsoring state. If not, they may want to consider placing a portrait of Lenin in their lobby as a daily reminder of the harm they are doing to America.