Whitmer wants state pension plans to dump Russian holdings over invasion of Ukraine

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LANSING – Gov. Gretchen Whitmer said Tuesday she wants state pension funds to dump their Russian holdings in response to the invasion of Ukraine.

Whitmer wrote state Treasurer Rachael Eubanks, asking her to convene a special meeting of the State of Michigan Investment Board so the board can divest the state of Michigan Retirement Systems pension plans from Russia.

Michigan Gov. Gretchen Whitmer
Michigan Gov. Gretchen Whitmer

Whitmer also called on Eubanks to dump any Russian assets held by other state funds controlled by the state Treasury.

Whitmer's action followed similar actions by several governors in other states Sunday and Monday and calls for action by state lawmakers. Whitmer said she wants to align Michigan's actions with national and international sanctions against Russia.

More: Michigan lawmakers step up calls for Whitmer to 'starve Russian war machine'

More: GM and some other automakers suspend business to Russia

"As the situation in Ukraine progresses, I will continue to stay in touch with top leaders in the federal government on behalf of Michiganders," Whitmer said in the letter.

"Michiganders may feel concerned about the impacts this situation will have on Michigan’s economy. For that reason, I will continue to monitor any potential disruptions to our supply chains and prices to protect Michiganders’ pocketbooks and put Michiganders first."

Ron Leix, a spokesman for the Michigan Department of Treasury, said Monday the State of Michigan Retirement System has "a very limited number of holdings that are associated with Russian companies." Those investments amount to about 0.06% of the fund's holdings, he said.

"These holdings are managed by external managers and primarily invested in international stock indexes and mutual types of funds," Leix said. "External managers buy and hold these types of securities, so the state’s retirement system is not the direct owner of the holdings. Russia has not been, nor is it currently, an investment focus."

Whitmer said she wants Michigan funds divested from "any investments in institutions or companies headquartered in Russia or that have their principal place of business in Russia."

Earlier Tuesday, state Rep. Jeff Yaroch, R-Richmond, wrote Whitmer, asking her to direct the Michigan Liquor Control Commission to stop buying Russian-made products.

And state Rep. Darrin Camilleri, D-Trenton, introduced legislation to add Russia to the list of countries in Michigan’s Divestment from Terror Act. Such a move would require immediate divestment of state money and assets from companies with business operations connected to Russia, and prevent any future investment.

The calls for action by Michigan lawmakers followed actions by governors and lawmakers in other states.

On Monday, North Carolina Gov. Roy Cooper, who, like Whitmer, is a Democrat, ordered state offices under his control to terminate government contracts that benefit Russian businesses, and Colorado Gov. Jared Polis, also a Democrat, announced similar actions. Colorado said it would pull $8 million from a Russian state-owned bank.

Several legislatures around the country initiated actions Monday. Getting approval of bills typically takes longer than executive actions.

On Sunday, New York Gov. Kathy Hochul, a Democrat, signed an executive order forbidding state agencies from doing business with Russia, including canceling its investments there.

Hochul also said New York will welcome Ukrainian refugees in response to Russia's invasion, noting at a news conference in Albany that her state is home to the largest Ukrainian population in the U.S.

Also over the weekend, the governors of a handful of U.S. states ordered government-run liquor stores to stop selling Russian-made vodka and distilled spirits in solidarity with the Ukrainian people. Those states included Utah, New Hampshire, Ohio and Pennsylvania.

Michigan does not have state-run liquor stores, but liquor sales in Michigan are regulated by the Michigan Liquor Control Commission, which is part of the Department of Licensing and Regulatory Affairs and whose members are appointed by the governor.

Before Whitmer released her letter to Eubanks, spokesman Bobby Leddy said Tuesday that the governor "ordered a full review of the actions and measures available to hold Russia accountable for the untold destruction, loss of life, and suffering that they've caused in Ukraine," and is "currently reviewing the options to ensure that they have the maximum effect while insulating our state's economy from any disruption."

Yaroch, who chairs a House appropriations subcommittee with responsibility for LARA, said although acts such as a halt to purchase of Russian liquor "may not largely impact the Russian economy, we must all come together and do everything we can to starve the Russian war machine and make it clear to this dictator that there will be retribution for his unconscionable act of totalitarianism."

A spokeswoman for the Liquor Control Commission had no immediate comment Tuesday.

Camilleri said in a news release that Michigan "must do our part to hinder the Russian war effort and the Russian economy that supports it.”

Currently, the United States lists the governments of Syria, Iran, North Korea and Cuba as state sponsors of acts of international terrorism.

Caleb Buhs, a spokesman for the Michigan Department of Technology, Management and Budget, which oversees most state contracts, said the department searched the addresses for all Michigan contracts and none returned with a Russian address.

Further checking could be done into possible subsidiary connections, but "essentially, DTMB is not aware of any business with Russian-based companies," Buhs said.

For most states, any such actions would be largely symbolic.

Reuters, citing data from the Distilled Spirits Council of the United States, reported that only 1.2% of U.S. vodka imports came from Russia in the first half of 2021.

The group's data shows that Russian vodka accounted for only $18.5 million of the $1.4 billion worth of total vodka imports in the United States in 2021, Reuters said.

Many Russian-styled vodkas sold in the United States, including Smirnoff and Stolichnaya, are actually made in other countries, including in the United States.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4. Read more on Michigan politics and sign up for our elections newsletter.

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This article originally appeared on Detroit Free Press: Gov. Whitmer wants state pension funds to divest from Russia