PERS investment disclosure bill debated
CARSON CITY — The Public Employees Retirement System bases its investment decisions on securing the best financial return for its members and cannot stop investing in companies doing business with Iranian oil firms, legislators were told Thursday.
"We must look only to financial issues for members," PERS Executive Director Dana Bilyeu testified before the Senate Finance Committee.
She spoke during a hearing on Assembly Bill 493, sponsored by Assembly Speaker Barbara Buckley, D-Las Vegas, which would require PERS to submit an annual report to the Legislature on companies in which it invests that have ties to Iran’s petroleum industry.
AB493 passed the Assembly 41-1 in April.
The Senate Finance Committee took no immediate action on the measure, but is expected to approve it, possibly today.
During the hearing, Buckley lamented that the Legislature cannot stop such investments, noting that Iran "provides funding to military organizations that are killing American troops in Iraq."
She said the state constitution prevents the Legislature from "interfering with who PERS invests with and who PERS doesn’t invest with."
All the Legislature can do is require PERS to reveal those investments publicly, Buckley said.
Bilyeu said an attorney general’s opinion prevents the PERS board from considering "social issues" and the system’s only interest is securing the best financial return.
However, she did agree to give legislators "any information" they want about PERS investments in companies doing business in Iran.
PERS invests in Royal Dutch Shell Petroleum and six other companies that conduct business with Iranian oil companies, Bilyeu said.
But she added the Royal Dutch Shell, the parent company of Shell service stations in the United States, has fewer than 1,000 employees in Iraq, compared with 23,000 in the United States.
In all, Bilyeu said in an interview that PERS has $168 million in total investments in companies doing oil business in Iran. Of that, $71 million is invested in Royal Dutch Shell.
Bilyeu said the bill calls for PERS to limit Iranian investments in a manner "consistent" with the foreign policy of the United States. But she said that foreign policy might change under President Barack Obama.
Senate Minority Leader Bill Raggio, R-Reno, said the bill’s goals are worthy, but questioned whether PERS should end its Iranian investments.
"If we made exceptions (to investments) on social considerations, we do a great disservice to our own income," Raggio said.
"We cannot interfere with who PERS invests in," Buckley added. "Transparency is all this Legislature can do."
Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3900.