Alaska legislators call on Permanent Fund to divest $162 million in Russian assets

A bipartisan group of Alaska legislators is urging the Permanent Fund’s managers to divest $162 million in Russia-based assets.
Published: Mar. 1, 2022 at 4:07 PM AKST|Updated: Mar. 1, 2022 at 7:34 PM AKST
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JUNEAU, Alaska (KTUU) - A bipartisan group of Alaska legislators is urging the Permanent Fund’s managers to divest $162 million in Russia-based assets.

Paulyn Swanson, a spokesperson for the Alaska Permanent Fund Corp., said on Monday that the fund’s managers are not currently contemplating a divestment strategy from Russia.

“The Alaska Permanent Fund Corporation is keenly aware of the developing situation with regards to Russia and Ukraine, and is assessing impacts to the portfolio during these dynamic and unpredictable times,” she said by email on Tuesday. “APFC is closely monitoring the events that are still unfolding with regards to Russia and is analyzing the appropriate response.”

The Permanent Fund’s latest financial statements show that it is worth over $81 billion. Swanson said 0.2% of the fund is invested in Russia, representing over $162 million.

According to September filings, the Permanent Fund has over $30 million invested in Russian energy giant Gazprom and almost $24 million invested in Sberbank of Russia, the country’s largest lender.

Five Alaska Senate Democrats have urged the Permanent Fund’s board of trustees in a letter to divest from Russia, arguing that Alaska’s holdings are providing material support for President Vladimir Putin’s regime.

“Alaska, by likewise rejecting these investments, can play a role in stabilizing the region and allowing investment instead in entities which support the American ideals of human rights, democracy, and national sovereignty,” the letter reads.

Anchorage Democratic Sen. Tom Begich said state statute also compels divestiture from Russia after Putin threatened to use his country’s nuclear arsenal.

“Now is the time to divest from companies that are threatening our very existence,” he said.

Senate President Peter Micciche has been in discussions with the Alaska Retirement Board and the Alaska Permanent Fund Corp. to determine the state’s Russia holdings.

“We are evaluating a process that may result in divesting Russian investment holdings,” he said.

That request has been submitted to the chief investment officers of both organizations, Micciche added.

Norway’s $1.3 trillion sovereign wealth fund is divesting its Russia holdings and so is Australia’s Future Fund. States across the U.S. are debating whether to divest their state pension funds from Russia-based assets.

Rep. Zack Fields, D-Anchorage, joined Anchorage Republican Rep. David Nelson in urging for the Permanent Fund’s managers to divest from Russia immediately.

“Russia’s unprovoked attack can not go unanswered,” Nelson said through a prepared statement. “The reports I’m hearing that the Russian army is targeting Ukrainian civilians is beyond the pale. Alaska must respond as swiftly as possible and divest the Permanent Fund Corporation’s investments in Russia.”

Fields and Nelson also expressed concern about the Permanent Fund’s investments in financial institutions like Sberbank after the U.S. Treasury Department imposed tough sanctions on that bank.

When asked if Gov. Mike Dunleavy wants the Permanent Fund to divest from Russia, Jeff Turner, a spokesperson for the governor’s office, said the fund’s investment strategy is set by the independent board of trustees. Turner noted that the Legislature has the ability to draft bills to call for the Permanent Fund and other state agencies to divest from a specific country.

The deadline for legislators to introduce personal legislation has passed, but legislative committees can still introduce bills. Fields chairs the House Labor and Commerce Committee and said he is looking at introducing legislation to identify any Russian oligarch’s money held in Alaska and any Russian assets hidden in trusts.

Historically, the Permanent Fund’s managers have resisted calls to sell investments based on “political” reasons, including on calls to divest from Iran in 2012.

In 2008, a bipartisan group of lawmakers urged for the Permanent Fund board of trustees to divest $3 million in holdings from Sudan over concerns of genocide occurring in that country. The fund’s managers resisted those calls for close to a year before reversing course, according to reporting from the Anchorage Daily News.

Former Anchorage Democratic Rep. Les Gara, who is running to be Alaska’s next governor, helped lead the legislative push for divestment from Sudan. He urged the fund’s managers to make the same decision with Russia.

“There are tens of thousands of investments across the world, they don’t have to invest in companies that are benefiting a dictator that’s got blood on their hands,” Gara said on Tuesday.

Former Gov. Bill Walker, who is running for a second term, also urged for the state of Alaska to divest from Russia and to ban Russian seafood imports.

Editor’s note: This article has been updated with additional information.

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