N.C. Treasurer Dale Folwell wants Congress to allow state pension funds to seek damages through U.S. courts. His requested change in federal law could lead to seizure of Russian assets and properties.
The change could provide possible recoupment of damage done to North Carolina’s pension plans.
Folwell said in a press release that he wants Congress to amend the Foreign Sovereign Immunities Act of 1976 to provide direct recourse for the N.C. pension fund and other institutional investors and state pension funds to hold corrupt regimes and foreign state-owned corporations accountable for losses stemming from their deadly misdeeds.
“We are doing it this way because the law hasn’t been freshened up in nearly 50 years,” Folwell told Carolina Journal. “I don’t think in 1976 we were contemplating a sovereign country being invaded by a superpower. We need to pursue this through Congress to give us a potential pathway through the legal system.”
Folwell said pension plans selling their Russian investments isn’t an option because they are locked down, despite what has been written in a lot of articles across the country during the last few days.
The proposed action would be unprecedented. It would complement the economic sanctions and export controls the U.S. government already has imposed on Russia.
The release stated as of Feb. 25, the treasurer’s staff found that the state had minimal securities in its international equity portfolio that are domiciled in Russia, with just under $80 million or just 0.067% of the plans’ total holdings of $118.2 billion. The Supplemental Retirement Plan portfolio has about $12 million in exposure, or 0.077% of that plan’s $15.5 billion in holdings all within the international equity and index funds.
“It wouldn’t matter if it was $1,” Folwell said. “When you are a fiduciary, you have a responsibility to have loyalty and have a duty of care. I want to recoup the financial losses this mass murderer [Vladimir Putin] has inflicted on our pensioners and taxpayers.”
Folwell said he took action now because of a potential Ukrainian relief bill coming through Congress soon. He wanted to have an opportunity to get something inserted into the legislation.
He also urged the General Assembly to pass a resolution strongly condemning Putin’s murderous military invasion of Ukraine.
“Our prayers are there, but as keeper of the public purse I have the fiduciary responsibility to exercise loyalty and duty of care to the members,” Folwell said. “We signed up to be the lead plaintiffs on the Peloton class-action lawsuit. So, if we will legally go after a white-collar executive who may have committed securities fraud, why wouldn’t we have the courage to go after someone like this for what he has done to us and the pension plan?”