The National Association of State Auditors, Controllers and Treasurers; the National Association of State Retirement Administrators; the National Conference of State Legislatures; and the National Council on Teacher Retirement pointed out in their letter that “over the last several years a large number of state governments, universities, pension funds (including a number of our members), and other institutional investors, as well as individual investors, have made attempts to ensure that their invested funds do not directly or indirectly support terrorism.” Attached to their letter was another letter dated June 3, 2005, signed by public plan administrative personnel from a number of states, to federal personnel, including the Director of the Division of Corporate Finance at the SEC, requesting a list of such companies be made available to public employee retirement systems across the U.S.
The groups noted that authoritative federal information relating to public company business activities in or with State Sponsors of Terrorism that conflict with U.S. foreign policy or humanitarian policies is still not available. The groups said judgment on the degree to which a public company’s business activities may support terrorism or may be inconsistent with U.S. foreign policy or national interests should not be delegated to non-government organizations or others vendors of information whose interests in the matter are motivated more by profit than the foreign policy concerns of the United States.
“[W]e continue to believe that the United States Government is the only credible and centralized authority to identify, monitor, and report on the nature and extent to which domestic and international companies are operating in Sudan and other states that sponsors terrorism, and thereby may be acting contrary to U.S. foreign policy and humanitarian objectives,” the groups’ letter said.
The groups did state, however, that simply providing access to SEC filing disclosures regarding business activities in or with State Sponsors of Terrorism is not sufficient for investors to determine whether, and the extent to which, such companies are acting contrary to U.S. foreign policy and humanitarian interests. The groups note that the Sudan Accountability and Divestment Act of 2007, recently signed into law by President Bush (See Bush Signs Sudan Divestment Bill into Law) requires that a Federal contractor must now certify to its contracting officer that it does not conduct business operations in Sudan covered by the new law and suggest that the SEC consider a similar approach, whereby companies filing with the SEC could similarly certify, subject to some penalty, that they do not engage in such business operations with state sponsors of terrorism.
After the SEC received criticism about a tool added to it Web site last June that permitted investors to obtain information directly from company disclosure documents about their business interests in countries the U.S. Secretary of State designated “State Sponsors of Terrorism,” it asked for public comment on providing such information for investors. The comments have been mixed (See Groups Ask SEC to Do Nothing on Terrorism-Link Info ).
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