August 16, 2004

Does Tennessee's State Pension Fund Help Fund Terror?

Does the state of Tennessee unwittingly help fund terrorist-supporting nations through the investments made by its public-employee retirement system's pension plan? The answer is, we don' t know - but it's a good bet the answer is yes.

We don't know for certain, however, because officials with the Tennessee Consolidated Retirement System refused to provide researchers with a Washington D.C. think tank, the Center for Security Policy, with any information about how it has invested Tennessee taxpayers' funds.

A little background: The Center for Security Policy recently completed an extensive study, Terrorism Investments of the 50 States, which is the first national security-based statistical analysis of the investment patterns of America's public pension funds. This report - available here in a 115-page PDF file - proves empirically that our country's largest and most prominent public pension systems tend to be heavily invested in global publicly traded companies that have business activities in terrorist-sponsoring states.

For example, the pension system of tiny Rhode Island has close to $400 million invested in 41 companies that actively doing business in terrorist-sponsoring countries. America's largest public pension system - the California Public Employees Retirement System - has more $17 billion invested in 201 such companies.

In fact, according to the study:

On average, America's Top 100 pension systems invest between 15 and 23 percent of their portfolio in companies that do business in terrorist-sponsoring states.

The nation's 100 largest public-employee pension funds, says the CSP:

invest more than $1 trillion in stock alone on behalf of this country's fire fighters, police officers, teachers, state and local officials and other public employees, making this collection of funds one of the most powerful investment blocks in the world. Given this extraordinary financial influence and the important role played by public companies in the economies of terrorist-sponsoring states, the Center for Security Policy has reached a key finding: America's 100 largest and most prominent pension systems have the power to help defeat terrorism.

So, how come we don't know about Tennessee's public-employee pension fund? According to the report, Tennessee officials refused to provide information about how the Tennessee Consolidated Retirement System has invested

A number of pension systems were not forthcoming with their investment portfolios, despite the fact that they are public entities and, in many cases, state law requires them to make available such information when requested. For example, the Detroit Police and Firemen Retirement System refused to recognize the submission of a public records request and never provided data. Similarly, a representative of the Tennessee Consolidated Retirement System questioned why the portfolio holdings of public employees are relevant to the public and chose not to return subsequent phone calls.

My guess is, the state employees who refused to release the information were violating the law.

I learned earlier today that a representative of the Center for Security Policy is to be today, meeting with local news editors and reporters, including at The Tennessean. I hope they'll follow up by asking the TCRS to release the information. If we Tennesseans are indirectly funding terrorist states through the investment of the billions of dollars of our tax dollars that are in the state employees' pension funds, we deserve to know.