Treasurer Wants Colorado Pension Fund To Smoke Out Terrorism

September 6, 2002 ( - A state official has called on the Colorado public pension fund to determine whether companies in which it invests support terrorism and, if they do, to see if they represent too high of an investment risk.

Colorado State Treasurer Mike Coffman cited the risk to the Public Employee Retirement Association (PERA) of putting money into those companies that could face substantial harm in the wake of international sanctions or even military strikes. That harm could severely impact the value of stocks and bonds in the pension fund’s portfolio, he said.
“Pension funds across America should be looking at this issue because whether investing in stocks, bonds or venture capital, we must deal with this new type of investment risk,” Coffman told Washington-based publisher BNA. 
Coffman said companies with business ventures in countries such as Iran, Iraq, and North Korea that are alleged to support terrorist activities could also face significant losses due to negative publicity or divestment campaigns.

Outside Experts

In a recent letter to the PERA board, Coffman recommended that the organization hire a private company to figure out which of PERA’s holdings face terrorism-related risks that could be hurt by an anti-terrorism backlash. A Coffman spokesman said such a consultant would cost $10,000 to $15,000.

“I believe PERA must identify ways to conduct the due diligence needed to take these risks into consideration when it is making investment decisions,” Coffman said. “We cannot afford to take a wait-and-see approach.”
Katie Kaufmanis, spokeswoman for PERA, told BNA that nearly 14% of the association’s $25 billion stock portfolio is in foreign investments. She said she did not know what percentage of the portfolio is invested in companies that could have exposure to terrorist-related activities.