Across the nation politicians are naïvely calling for state pensions to dump their Russian investments to punish the country for its invasion of Ukraine. Since state pensions have in recent years agreed to let Wall Street fund managers keep secret their investment holdings, states don’t even know the Russian assets they hold. 

Yesterday, state Attorney General Dave Yost publicly called upon Ohio’s five public employee retirement funds to divest themselves of Russian financial holdings to further punish the country over its invasion of Ukraine. Yost naively directed the five state funds to identify Russian equities and divest as quickly as possible.

Good luck with that.

Also yesterday, Rhode Island General Treasurer Seth Magaziner and the State Investment Commission voted to pull state pension assets from Russia. Magaziner's office claims the market value of its Russian investments prior to the invasion was no more than $30 million. Don’t count on it. Magaziner is almost certainly not including Russian assets held in secretive private funds offshore.

A forensic investigation I recently conducted on behalf of the Ohio Retired Teachers Association, The High Cost of Secrecy, revealed that the State Teachers Retirement System of Ohio (STRS) had long abandoned transparency, choosing instead to collaborate with Wall Street firms and others to eviscerate Ohio public records laws and avoid accountability to stakeholders. (Three forensic investigations I undertook of the Employee Retirement System of Rhode Island detailed similar transparency concerns.)



At STRS and Ohio’s other four state pensions, investment firms are no longer required to fully disclose to pension boards or staff their investment holdings. AG Yost claims the pensions have a fiduciary responsibility to their members to divest.