Testimony Before the Joint Legislative Audit Committee
of the California Legislature
Hearing on CALPERS Investment
January 5, 2000
I would like to thank the Senators and Members of the Assembly on this Committee for holding this hearing concerning an audit on the California Public Employees Retirement System (CalPERS) investments. I will focus my remarks on CalPERS' relation to the country of Sudan and will begin by giving some background on the country.
Our policy makers have recently and properly apologized for having failed the 800,000 victims of the 1994 genocide in Rwanda and the thousands of Bosnian Muslims massacred in the UN declared "safe haven" of Srebenica in 1995. We are also currently gravely concerned about Russian brutality in Chechnya. However, we are ignoring a religious and ethnic genocide now occurring in Sudan that has destroyed many more lives than Chechnya, Bosnia, Kosovo and Rwanda combined.
Sudan is currently ruled by the NIF, a fundamentalist Muslim group that is determined to force its version of Islam on the entire country, including Christians, followers of traditional religions, and the majority of the country's Muslims, who disagree with it.
The Government systematically bombs and burns central and southern villages, and its bombers specifically target hospitals, refugee camps and places of worship. The Government also sends its Popular Defense Forces to raid the villages. Many of those seized are herded into so-called "peace villages," where government soldiers often rape the women and children. The Government also uses food as a weapon of war. It manipulates international relief so that it is denied to those most in need, especially those near its oil fields. It denies food aid (including that supplied by the U.S.) to those it wants to move or kill.
There is another dimension--slavery. Government supported militias currently engage in the slavery of black Africans. Tens of thousands of slaves, mostly children, have been taken in raids. This has been carefully carefully by documented by dozens of organizations.
As a result of these actions, in southern and eastern Sudan, the homeland of Christians and traditional believers, two million people have been killed and five million displaced in the last eighteen years. According to the U.S. Agency for International Development, between one and two hundred thousand died from hunger in 1998 alone due to the deliberate starvation policies of the regime.
These are not rumors or wild charges. They are documented by the State Department, Members of Congress, the United Nations, the U.S. Committee on Refugees, major human rights organizations, and by dozens of relief and church organizations. To quote the former U.N. Special Rapporteur on Sudan, Gaspar Biro, who produced five excellent, yearly reports, the abuses "are past provingâ€¦ We are beyond that stageâ€¦we are reporting on facts because these are facts."
The U.S. Response
I do not use the word "genocide" casually. On June 16, 1999, the U.S. House of Representatives adopted, with only one dissension, a resolution condemning the government of Sudan for "deliberately and systematically committing genocide." (Emphasis added). Nobel laureate and holocaust survivor Elie Wiesel wrote to President Clinton on July 13, declaring Sudan a "genocide." On April 1999, President Clinton had made a public pledge to Weisel, stating: "I will do my best to make sure that something like [the Rwanda genocide] does not happen again in Africa."
On June 21, the U.S. Commission on International Religious Freedom designated Sudan as an "egregious and ongoing" religious persecutor. On October 6, the Administration included Sudan in its first designation of "countries of particular concern" for "egregious" religious persecution.
Secretary of State Madeleine Albright has described the Sudanese regime's "appalling human rights record, including torture, religious persecution, and forced imposition of sharia lawâ€¦it has prolonged a vicious and inhumane war, not hesitating to enslave, starve and bomb civilians." A large interfaith coalition petitioned for U.S. action on providing food aid, blocking American investments of foreign companies in Sudan, and other initiatives to stop the genocide. The Senate unanimously passed the Sudan Peace Act in late November, recommending and enabling these policies.
Why doesn't the President act? Sudan is already on the U.S. list of terrorist nations and thus in principle subject to comprehensive economic and trade sanctions and severed diplomatic relations. Sudanese Government personnel were involved in the bombing of the World Trade Center in New York. In October 1998, the Administration bombed Khartoum in retaliation for the bombings of U.S. Embassies in East Africa. However, the Administration and many other government agencies are so far still largely silent and inactive about the genocide in Sudan.
CalPERS and Sudan
How does this affect CalPERS? A campaign by several hundred leaders of religious and human rights groups has launched an international divestment campaign, particularly focusing on Talisman Energy, a Canadian oil company, and PetroChina (formerly the Chinese National Petroleum), which are partners in Khartoum's oil development. Sudanese forces have and are systematically uprooting indigenous people from around its oil deposits. In June 1999, 12,000 troops wreaked havoc on villages near Talisman's Unity Oil Field. The revenues from this oil will insulate this otherwise cash strapped regime and enable it to continue its campaign of genocide. The Sudanese themselves have declared that their new oil revenues will allow them to continue its policies. In short, Talisman and PetroChina provide critical and indispensable financial support to prop up a regime responsible for genocide and attacks on the U.S.
CalPERS announced this morning that it sold its Talisman stock last week (as, recently, have the teachers' pension funds in Texas and Ontario, and the TIAA-CREF). However, it claims that this decision had nothing to do with any moral concerns but was simply a routine economic decision. This means that CalPERS remains quite prepared to invest in Sudan, either through a repurchase of Talisman, or through participating in PetroChina's proposed approximately $7 billion February IPO on the New York Stock Exchange (the largest ever for an Asian country).
It is certainly true CalPERS' first responsibility is to provide for the retirement of public employees: it cannot utilize its funds for narrow political reasons. However, if there are any grounds at all for refusing financial support to a regime, Sudan meets them.
Even apart form the extraordinary case of the Sudan, these issues also have economic consequences. In a recent letter to Talisman, New York City comptroller Alan Hevesi said, "As long term investors, we believe a company that is cavalier about its moral and social responsibility presents an unacceptable investment risk." To this must be added that the Canadian Government has warned the company about its involvement in the Sudan, and that a growing lobby is targeting the stock for disinvestment (the stock has nose-dived).
It is a moral, political and economic imperative that CalPERS refuse to invest in companies that support the Sudanese regime. It is wrong that hundreds of thousands of California citizens contribute--without their consent and, in most cases without their knowledge--to slavery, religious persecution, racism, rape, forced starvation, torture and, according to the U.S. House and Senate, genocide. We are not asking for any major sacrifice of blood or treasure. All we ask is an end to any support of Sudanese terror.