BOSTON (State House News Service) — A Republican-led effort to divest state pension holdings from companies with business interests in Russia fell flat in the House on Wednesday where lawmakers rejected an amendment that sought to make Massachusetts one of a number of states that have used their retirement funds to make a political statement against Russia's invasion of Ukraine.
The amendment offered by House Minority Leader Brad Jones would have given Treasurer Deb Goldberg the authority she needs to sell off the small fraction of the state's $104 billion pension fund invested in assets tied to Russia.
The proposal, however, was cast aside without debate after House Democrats excluded it from a bulk amendment put together by House leadership, and Jones declined his opportunity to force it to be considered individually. The bulk amendment was attached to a $1.6 billion spending bill.
Jones, a North Reading Republican, said he did not view the issue as dead in the House, but acknowledged that in conversations with House Ways and Means Chairman Aaron Michlewitz some questions had been raised.
"There were a couple concerns. They weren't necessarily against it. They might very well be inclined to do it. They just want to do it in a different vehicle or whatever, so I said, 'That's fine,'" Jones told the News Service after the vote.
Jones's amendment would have also prevented companies owned by, controlled by, or based in Russia from accessing any cash or securities in banks subject to Massachusetts oversight. Similar bills have been filed in the Senate by Minority Leader Bruce Tarr and Sen. Walter Timilty, a Democrat. Those bills have been referred by the Senate to the Joint Committee on Rules.
The Pension Reserve Investment Management board has said that none of its investments have been impacted by U.S. sanctions on Russia, but the fund does have a small "exposure" to Russia of $140 million, or less than 0.2 percent of the fund.
Those Russian holdings are currently tied up in public equity and debt, according to Treasury officials, and could not be sold off until the Russian stock market, which has been closed since Feb. 28, reopens for trading. At that point, some expect PRIM's investments will be significantly devalued, if not worthless, due to the financial backlash against Russia.
House Speaker Ron Mariano said he's "not into making statements" with policy for political purposes.
"You can't get into the Russian stock market because it's closed. The whole economy is shut down, so what are we talking about?" the speaker asked.
Mariano said he can only bear to watch about an hour a day of the news coverage of the war because of the atrocities on display.
"It's very hard to have anything but anger and resentment for what the Russians are doing and I understand the solution is to ban everything, but you have to look at what's practical and what isn't practical," the Quincy Democrat said.
Mariano said the best thing Massachusetts and lawmakers can do is support President Joe Biden's agenda "to isolate the Russians on the world stage."
"We're a small, small part of this. This is a worldwide isolation," Mariano said. "In order for this to be effective they have to be piranhas worldwide and they're slowly becoming the piranhas of the world."
Goldberg, a Brookline Democrat, has said she supports divesting from Russian companies, but unlike in some states where treasurers have acted alone she would require authorization from the Legislature and governor.
The details of such a policy can also make a big difference.
For instance, Connecticut Treasurer Shawn Wooden said just days after the Russian invasion that he would be divesting more than $218 million in state pension funds invested in companies domiciled in Russia and in sovereign debt issued by Russia.
The broad scope of the Jones amendment, however, raised questions about whether the intent was to also divest from American companies that do business in Russia, such as Marriott or Starbucks.
Since Russia's invasion of Ukraine almost two weeks ago, calls to divest pension funds from Russia have been growing as state leaders around the country look for ways to stand in solidarity with the people of Ukraine.
States controlled by both Democrats and Republicans like New York, Connecticut, Colorado, North Dakota and Louisiana have all withdrawn pension funds from certain Russian investments, while other governors have taken more symbolic steps.
New Hampshire Gov. Chris Sununu, for example, ordered all Russian produced spirits to be removed from state-run liquor stores, while Virginia Gov. Glenn Youngkin asked mayors in his state to end sister city agreements with Russian cities.
And in North Carolina, Gov. Roy Cooper, a Democrat, directed state agencies to end any agreements that benefited Russian organizations.
Before leaving for vacation in Utah, Gov. Charlie Baker signed an executive order directing all Massachusetts executive branch agencies to review their contracts and terminate any agreements with Russian state-owned companies.
But some leaders on Beacon Hill have cautioned against acting too quickly without thinking through all the repercussions.
Senate President Karen Spilka told the News Service last Thursday that while she would be "taking a hard look" at divestment, she also wanted to be "thoughtful" in the response to the war.
"There are a lot of small businesses, family-owned businesses of immigrants from Russia or some of the surrounding countries that depend upon their livelihood for, maybe, importing or exporting to Russia or from Russia to here in the United States and they have absolutely nothing to do or any contact with Putin's political system, or the Russian political party or any decision making, so we would in the long run be potentially severely hurting these small immigrant families," Spilka said.
In the past, Spika has spoken publicly about her grandfather, Joseph Goldstein, who came to America in 1906 after fleeing a small village in Russia where he found his best friend hanging in the square the day after the two had been protesting the czar together.
"I feel like we need to do all we can in support of the Ukraine and Ukrainian people and make a stand against Putin, because that's who we need to take a stand against more than just Russia in general," Spilka said.
The Jewish Community Relations Council of Greater Boston wrote a letter to top House and Senate Democrats on Tuesday supporting divestment from companies doing business with Russia.
JCRC Executive Director Jeremy Burton said the Jewish community in Massachusetts has strong roots in Ukraine, where more than 40,000 Jewish people live, and Putin's war in that eastern European country has served as a "painful reminder of atrocities that destroyed those roots."
"While only a fraction of our ($104 billion) pension fund, any money invested in Russia or companies doing business with the Russian state is tacit approval of the reprehensible actions taken by Russian President Vladimir Putin and those who prop up his regime," Burton said.
Written by Matt Murphy/SHNS
[Sam Doran contributed reporting.]