Legislature(2009 - 2010)BUTROVICH 205

04/02/2009 04:00 PM WORLD TRADE, TECH, INNOVATIONS


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04:07:57 PM Start
04:08:14 PM SB37
04:56:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 37 DIVEST INVESTMENTS IN SUDAN TELECONFERENCED
Moved SB 37 Out of Committee
               SB  37-DIVEST INVESTMENTS IN SUDAN                                                                           
                                                                                                                                
4:08:14 PM                                                                                                                    
CHAIR MCGUIRE announced the consideration of SB 37.                                                                             
                                                                                                                                
SENATOR FRENCH,  Sponsor of  SB 37,  said the  idea of  the bill,                                                               
which  is stop  investing  in  Sudan, is  simple,  but making  it                                                               
happen  takes complex  maneuvers. He  read the  following sponsor                                                               
statement into the record:                                                                                                      
                                                                                                                                
     Government  supported genocide  has killed  hundreds of                                                                    
     thousands  of people  and  displaced approximately  2.5                                                                    
     million  residents from  the  Darfur  region of  Sudan.                                                                    
     This  legislation  will  enact  a  targeted  divestment                                                                    
     program  that   prevents  the  state  of   Alaska  from                                                                    
     investing  permanent fund  and retirement  plan dollars                                                                    
     in companies that directly  finance genocide in Darfur.                                                                    
     SB 37 gives Alaska the  opportunity to join the states,                                                                    
     businesses and educational  institutions that refuse to                                                                    
     fund such atrocities.                                                                                                      
                                                                                                                                
     Targeted divestment  is a proven  tactic to  reduce the                                                                    
     viability  of genocide  in Darfur.  Twenty seven  other                                                                    
     states have  divested from  businesses that  operate in                                                                    
     the  region.   The  cost  to  these   states  has  been                                                                    
     negligible.  Institutions  have   found  no  noticeable                                                                    
     decrease  in  returns   when  divestment  only  targets                                                                    
     companies  that have  explicit financial  links to  the                                                                    
     conflict. Holdings  in these companies amount  to seven                                                                    
     investments  valued at  less than  0.1  percent of  all                                                                    
     Permanent fund assets,  showing that the implementation                                                                    
     of this legislation  will not require a  major shift in                                                                    
     investment strategy.                                                                                                       
                                                                                                                                
     Results   from  the   divestment  movement   have  been                                                                    
     promising. Sudan, unlike  many foreign governments that                                                                    
     sponsor   genocide,   has  responded   favorably   when                                                                    
     threatened with economic sanctions.  Partly as a result                                                                    
     of  the divestment  movement,  the Sudanese  government                                                                    
     purchased a  six-page, $1 million advertisement  in the                                                                    
     New  York   Times  that   sought  out   foreign  direct                                                                    
     investment. As  more companies pull  out of  the region                                                                    
     or encourage  the government of  Sudan to  halt violent                                                                    
     acts, the end of genocide is highly probable.                                                                              
                                                                                                                                
     Ignoring  genocide has  left  several  scars on  recent                                                                    
     American  history. With  the cost  of action  so small,                                                                    
     Alaska has no excuse to sit on the sidelines.                                                                              
                                                                                                                                
CHAIR MCGUIRE  asked Commissioner  Galvin to  provide information                                                               
on the Governor's bill, SB 81, which has a similar goal.                                                                        
                                                                                                                                
4:11:42 PM                                                                                                                    
PATRICK GALVIN,  Commissioner, Department of Revenue,  said he is                                                               
speaking in favor of  the concept of SB 37 and  SB 81. The common                                                               
purpose  is  to  effectuate  divestiture   of  state  funds  from                                                               
companies that do business with  the government of Sudan. This is                                                               
an effort  to join the growing  chorus to oppose the  activity in                                                               
the  Darfur region  of Sudan  and to  acknowledge that  it is  an                                                               
unprecedented   situation  to   have  activities   recognized  as                                                               
genocide as they  are happening. It is a moral  imperative to act                                                               
on these activities and one way to do so is divestiture.                                                                        
                                                                                                                                
COMMISSIONER  GALVIN said  he testified  on a  similar bill  last                                                               
year    stating   support    for   divestiture.    However,   the                                                               
administration  had some  issues with  that bill  just as  it has                                                               
issues  with the  current bill.  He said  it is  his belief  that                                                               
those issues can  be resolved as the bill moves  forward. "We are                                                               
here to  support the  bill, support moving  the bill  through and                                                               
support  ultimately the  passage of  the amended  version of  the                                                               
bill," he said.                                                                                                                 
                                                                                                                                
When  the  administration  looked   at  what  the  Department  of                                                               
Revenue, the  Alaska Retirement Management  (ARM) board,  and the                                                               
Alaska  Permanent Fund  board of  Trustees  can do  on their  own                                                               
account  to effectuate  divestiture, they  found that  because of                                                               
state statute and the  restrictions on investment decision-making                                                               
of  each  of  the  bodies  they do  not  have  the  authority  to                                                               
effectuate   a  divestiture   policy.  For   that  reason,   this                                                               
legislation is not just appropriate, it is needed.                                                                              
                                                                                                                                
The   administration's   goal,   which  ultimately   became   the                                                               
Governor's bill,  was to achieve  divestiture of the  state funds                                                               
at a  minimum cost  to the state.  That cost is  not so  much the                                                               
loss  of investment  revenue, but  the mechanism  of implementing                                                               
the  divestment policy.  Each state  entity that  is affected  by                                                               
this  legislation utilizes  certain investment  policies that  do                                                               
not lend themselves  to having a divestment  policy because these                                                               
state entities do not have  direct control of the investments and                                                               
thus cannot  dictate the terms.  To actually fulfill  the purpose                                                               
of this legislation the state would  have to divest from all such                                                               
funds  even though  they may  have nothing  to do  with companies                                                               
dealing with Sudan.                                                                                                             
                                                                                                                                
The legislation that the administration  would like to go forward                                                               
would  be structured  to  put  the burden  of  compliance on  the                                                               
accountants who actually insure  that the investments are meeting                                                               
the  standards and  rules that  are established  for each  of the                                                               
investment  accounts.  These  folks  do  this  every  day  so  it                                                               
wouldn't add  additional cost, it  would simply be  an additional                                                               
standard they would look at in their routine activities.                                                                        
                                                                                                                                
COMMISSIONER  GALVIN noted  that  the ARM  Board  and the  Alaska                                                               
Permanent  Fund Board  of  Trustees  recently passed  resolutions                                                               
supporting  the  divestment  legislation that  the  Governor  put                                                               
forward because it minimizes costs and unintended consequences.                                                                 
                                                                                                                                
4:18:04 PM                                                                                                                    
SENATOR   STEVENS  asked   if  other   state   funds,  like   the                                                               
Constitutional Budget Reserve (CBR), are included.                                                                              
                                                                                                                                
COMMISSIONER  GALVIN replied  the  CBR and  the statutory  budget                                                               
reserve fall  under his fiduciary responsibility  as commissioner                                                               
and  they would  be  covered  by the  bill.  However, because  of                                                               
existing  restrictions it's  not likely  that the  investments in                                                               
either of those funds would be implicated.                                                                                      
                                                                                                                                
DAVID  ALEXANDER, Nine  Star Education  and Employment  Services,                                                               
Anchorage, said the board of  directors has concern with the bill                                                               
because they serve  the Sudanese community in  Anchorage and work                                                               
with Sudanese Alaskan  residents to help them  find work, housing                                                               
and other services.                                                                                                             
                                                                                                                                
BAJEK DENG, South  Sudanese Community in Anchorage,  said he left                                                               
Sudan  because  the president  authorized  killing  of a  lot  of                                                               
people in  his village. He is  not a good president  and has been                                                               
killing people since  1980. He thanked the  committee for letting                                                               
him tell about the genocide. Money  should be used in a good way,                                                               
he said.                                                                                                                        
                                                                                                                                
4:22:49 PM                                                                                                                    
TOR GACH, South Sudanese Community  in Anchorage, said he came to                                                               
the  U.S. 15  years ago  and has  lived in  Alaska 3.5  years. He                                                               
supports SB 37 because he  doesn't support the genocide in Sudan.                                                               
The government  is not good;  it has killed 2.9  million southern                                                               
Sudanese people, not including those  in Darfur. It's a good idea                                                               
to withdraw  Alaska money from  investments in Sudan.  He thanked                                                               
the committee for supporting the bill.                                                                                          
                                                                                                                                
4:24:50 PM                                                                                                                    
ELISE  BOYER,  Juneau  Jewish Community  at  Congregation  Sukkat                                                               
Shalom,  said  the  board  unanimously  passed  a  resolution  to                                                               
support divestment in whatever way  it may come about. She stated                                                               
the following:                                                                                                                  
                                                                                                                                
     Due to the overwhelming  dread and destruction suffered                                                                    
     by the Jewish  community during the Holocaust,  we as a                                                                    
     current  community are  painfully aware  of how  urgent                                                                    
     the need  is to do what  we can to stop  this genocide.                                                                    
     The  decision on  how best  to do  that will  obviously                                                                    
     take  place far  away from  this room,  but what  we do                                                                    
     have the power to do is  to stop funding it and to stop                                                                    
     profiting from  companies who fund it.  So we're asking                                                                    
     that this  committee act favorably and  quickly to move                                                                    
     the bill along.                                                                                                            
                                                                                                                                
     When  we teach  our  children about  World  War II  and                                                                    
     about the Holocaust, we make  them a promise, and every                                                                    
     Jewish  family  uses  the same  words.  We  say  'Never                                                                    
     again.' And  by taking  favorable action on  this today                                                                    
     we can take a step  forward to making that promise come                                                                    
     true - at least for the people in Sudan and Darfur.                                                                        
                                                                                                                                
STUART  COHEN, representing  himself,  Juneau,  said most  people                                                               
know  in general  what's going  on  in Sudan.  Gorillas from  the                                                               
south have been working against  the government in the north. The                                                               
northern government's  response has  been to unleash  militias to                                                               
destroy women and children in southern Sudan. This isn't new.                                                                   
                                                                                                                                
Alaska  is involved  because it  has a  stake in  the winner,  he                                                               
said. The argument against divestment  is that the permanent fund                                                               
is designed to make money. But  when the mandate to make money is                                                               
mixed  with  morality  things get  complicated  because  everyone                                                               
potentially  has a  cause. The  permanent fund  wasn't set  up to                                                               
arbitrate such things, but that's  almost always the logic behind                                                               
genocide.  The mind-boggling  crimes against  humanity are  never                                                               
done by a  few evil people. They're always done  by decent people                                                               
doing  their part  to  make  it happen.  It's  the policeman  who                                                               
knocks on  your door,  the title insurer  who transfers  title of                                                               
confiscated  property,  the  banker   who  transfers  money,  the                                                               
chemist who makes the nerve gas,  the train driver who drives the                                                               
train full  of people  to concentration  camps, and  the business                                                               
folks who invest in the businesses  of the people who are running                                                               
the country.  Evil pretty much  takes control of the  things that                                                               
decent people  value such as  jobs, churches,  schools, politics,                                                               
and business.  When this happens all  the people have a  stake in                                                               
its  success. Right  now and  as long  as the  permanent fund  is                                                               
invested in  Sudan, Alaskans have  a stake in the  destruction of                                                               
the people  in southern Sudan.  I can accept a  smaller permanent                                                               
fund check, he said.                                                                                                            
                                                                                                                                
4:29:09 PM                                                                                                                    
JOYANNE   BLOOM,  representing   herself,  Juneau,   thanked  the                                                               
committee  for hearing  the bill  and urged  its speedy  passage.                                                               
Time  is critical.  She  related that  she is  a  member of  Save                                                               
Darfur  and a  past  member  of the  board  of  directors of  the                                                               
American Jewish World  Service. The latter helped  start the Save                                                               
Darfur  movement here  in this  country.  The current  president,                                                               
Ruth Messinger,  was in the  White House  this week to  meet with                                                               
President Obama and  his newly appointed envoy  to Sudan, General                                                               
J. Scott Gration.                                                                                                               
                                                                                                                                
General Gration left for Sudan on  Tuesday to negotiate an end to                                                               
the  crisis  and  restore  international aid  to  the  people  of                                                               
Darfur.  She noted  that after  the International  Criminal Court                                                               
put  out a  warrant for  the  arrest of  President al-Bashir,  he                                                               
retaliated   by   expelling   the  thirteen   international   aid                                                               
organizations that  were providing food, water,  and medicine for                                                               
the displaced people of Darfur.                                                                                                 
                                                                                                                                
MS. BLOOM continued:                                                                                                            
     So how  do we  connect the  dots from  Washington D.C.?                                                                    
     What's happening this week in  Sudan and here in Alaska                                                                    
     and  especially here  today in  your committee  room? I                                                                    
     think  that  you're  all   negotiators.  I  think  that                                                                    
     probably the definition of a  legislator is that you're                                                                    
     a negotiator. You get it;  you understand that the more                                                                    
     clout you have,  the better you are  able to negotiate.                                                                    
     So we  want to  give General Gration  all the  clout we                                                                    
     can when he's over there.  He needs to demonstrate that                                                                    
     state by  state we  Americans won't allow  genocide. So                                                                    
     far, as  your sponsor  said, 27  states have  drawn the                                                                    
     line  and  they  have divested  in  companies  directly                                                                    
     doing business in Sudan.                                                                                                   
                                                                                                                                
     We need you here today, here  and now, to fill in those                                                                    
     dots  with a  bold black  firm marker  that says  we as                                                                    
     Alaskans,  and this  is underscored,  we  want to  also                                                                    
     draw the line against genocide.                                                                                            
                                                                                                                                
4:32:31 PM                                                                                                                    
REBECCA WORL, South Sudanese Community  of Anchorage, said she is                                                               
running from  war. She  doesn't know where  her parents  are. The                                                               
way they treated her is no way to treat a person.                                                                               
                                                                                                                                
DANIEL W.  GATKUOTH, South Sudanese Community  of Anchorage, said                                                               
the war in  Sudan has been going  on for longer than  the 20 some                                                               
years he's been  alive. He came to Alaska with  his family and he                                                               
would like to  have the bill signed to help  with the problems in                                                               
Sudan.                                                                                                                          
                                                                                                                                
4:36:18 PM                                                                                                                    
KHAK  BOTH, South  Sudanese Community  of Anchorage,  said Alaska                                                               
money invested  in Sudan is  not a good thing.  Southern Sudanese                                                               
don't benefit  from the oil  in the  south; it's used  to support                                                               
militias and to  kill Darfurians. He asked the  committee to pull                                                               
money out of Sudan and put it in the south.                                                                                     
                                                                                                                                
4:39:47 PM                                                                                                                    
RICKY TAGABAN, representing himself, Juneau,  said when he was in                                                               
his junior year in high school  he had the honor of welcoming two                                                               
refugees  from Sudan  to speak  at his  school. His  task was  to                                                               
deliver  the welcome  in Tlingit  and  he decided  to relate  the                                                               
origin  of  the  Tlingit  national   anthem  to  their  story  as                                                               
refugees.  A  line  in  the  anthem says  "So  it  may  never  be                                                               
forgotten, our voices  will be heard on  our grandfather's land."                                                               
It may  not be in  this lifetime, but  Dinka [group of  tribes of                                                               
south Sudan]  voices will be  heard on  Dinka land. He  prays and                                                               
hopes that  in this lifetime  these people are empowered  to take                                                               
back their  lives and  their country.  We can  do this  one thing                                                               
that says that we don't accept  what's going on. "Part of holding                                                               
each other  up is  holding each  other accountable,"  Mr. Tagaban                                                               
said.                                                                                                                           
                                                                                                                                
DOBUOL DENG, Southern Sudanese Community  of Anchorage, said what                                                               
is happening in Darfur is  another holocaust and he believes that                                                               
99  percent of  the Sudanese  that  live in  Alaska support  this                                                               
bill.  The community  was relieved  when the  international court                                                               
issued an arrest  warrant for Sudanese President  Omar Hassan as-                                                               
Bashir. Mr. Deng appealed to the  people of Alaska to join in the                                                               
divestment.                                                                                                                     
                                                                                                                                
4:44:30 PM                                                                                                                    
DICHINE RIEK, Southern Sudanese  Community of Anchorage, said she                                                               
came to  the U.S. 15  years ago  from Southern Sudan.  There were                                                               
lots of problems coming from  northern Sudan, but they don't know                                                               
where people in the  north got the money to buy  the guns to kill                                                               
the people in  the south. Now lots of people  from southern Sudan                                                               
are in  the U.S. as  refugees. Pull the  money out of  the north,                                                               
she said.                                                                                                                       
                                                                                                                                
PAULIET  DENG, South  Sudanese Community  of Anchorage,  said the                                                               
problems  in  Darfur are  the  same  as  in Southern  Sudan.  The                                                               
community  is glad  the money  will  be pulled  from the  program                                                               
because it makes problems in Sudan.                                                                                             
                                                                                                                                
PAL CHUOL,  South Sudanese Community  of Anchorage, said  he came                                                               
to the  U.S. from Sudan  10 years  ago. There's been  genocide in                                                               
Sudan  for many  years  and  the people  have  suffered. What  is                                                               
happening in Darfur  has happened in southern Sudan.  It would be                                                               
good to  sign the  bill and  help stop the  killing of  women and                                                               
children and the looting.                                                                                                       
                                                                                                                                
4:51:19 PM                                                                                                                    
CHAIR MCGUIRE closed public testimony.                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  moved to report  SB 37 from  committee with                                                               
individual recommendations and attached fiscal note(s).                                                                         
                                                                                                                                
SENATOR STEVENS  noted that  North Korea  is another  place where                                                               
the state  shouldn't be investing  and asked the  commissioner if                                                               
other countries should be added to the list.                                                                                    
                                                                                                                                
COMMISSIONER GALVIN said  no; what is happening in  Darfur is not                                                               
similar to  what may be  happening in countries like  North Korea                                                               
or Iran. The issue of  government-sponsored genocide is unique to                                                               
the situation  in Darfur. There is  a bright line that  says that                                                               
it is  morally separate than other  potential considerations that                                                               
interest  groups may  want to  see  addressed through  investment                                                               
policy.                                                                                                                         
                                                                                                                                
CHAIR MCGUIRE said she understands  that he will offer changes in                                                               
the  next committee.  She appreciates  Senator Steven's  question                                                               
but  believes   is  possible  to   draw  a  bright   line  around                                                               
government-sponsored genocide. I'd  like to do more,  but this is                                                               
what we can do  now, she said. Perhaps this is a  chance to set a                                                               
precedent about what we expect in our world, she added.                                                                         
                                                                                                                                
CHAIR MCGUIRE, finding no further  discussion and no objection to                                                               
the motion, announced that SB 37 is moved from committee.                                                                       

Document Name Date/Time Subjects
SUDAN PACKET.pdf SWTI 4/2/2009 4:00:00 PM