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The Morning Call: Commissioner:Fund shouldn’t help Iran

County official calls for policy limiting foreign investment.

By Sarah Fulton | Special to The Morning Call
January 10, 2008

After a vote to internationally invest about $22 million of the Lehigh County employee retirement fund Wednesday, a county commissioner proposed developing a policy to prohibit investments that could benefit Iran.

Commissioner Dean Browning said he is concerned that some funds invested internationally on behalf of the county could support corporations that do business with Iran.

Commissioners voted unanimously Wednesday to enter an agreement with Julius Baer Investment Management of New York to invest roughly $22 million, or 6.33 percent, of the retirement fund in international business.

Several oil companies listed in the new investment plan have ties to Iran, Browning said, including Lukoil of Russia, Royal Dutch Shell of The Hague and Petroleo Brasileiro of Brazil.

”There is a small, but growing, movement of pension funds to divest themselves of companies that do business in Iran,” Browning said.

State legislatures across the country have proposed restricting investment benefiting Iran because of suspicion of that nation’s nuclear program and possible ties to terrorism. In September 2007, the Senate passed a resolution urging the Bush administration to label Iran’s Revolutionary Guard Corps, a branch of the country’s military, a terrorist group.

Browning said other investors have taken attempts to avoid investing in companies with ties to Sudan. The United Nations has a mission in the African nation to protect human rights and provide humanitarian assistance amid extreme violence.

Commissioner Chairman Percy Dougherty said he shares some of Browning’s concerns and that the county should not fund countries ”against the American way of life.”

Commissioners unanimously approved the agreement with Julius Baer Investment. The firm will manage just $22 million of the county’s $360 million retirement fund. The county retirement fund is managed by more than a dozen firms and generates revenue to provide pensions for roughly 1,200 county retirees. The county Retirement Board oversees the management.

Stacey O’Neill, a manager from Julius Baer Investment, wrote in an e-mail to county commissioners and administrators that the firm’s investments comply with strict federal law.

”We believe it would be inconsistent with our fiduciary responsibilities to the fund’s investors to cease investment in specific companies without a coordinated restriction instituted by the U.S. government,” O’Neill wrote.

Browning said that this year he would like to develop a policy regarding the county’s investments overseas.

Pennsylvania, California, Georgia, Kansas, Michigan, Missouri, New Jersey, New York, Ohio, Oklahoma, Oregon, and Texas are considering adopting Iran-free investing, according to the Center for Retirement Research at Boston College.

Sarah Fulton is a freelance writer.

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