Missouri Treasurer Sarah Steelman called on state retirement funds to stop investing in companies and banks that support terrorist activities or aid rogue states that support terrorist acts. Ms. Steelman recently found that the $6.2 billion Missouri State Employees' Retirement System, Jefferson City, is invested in Arab Bank, which is currently under investigation by the FBI, the Treasury Department and Congress for allegations including payments to families of suicide bombers and money transfers to suspected terrorist organizations, according to a statement she issued Wednesday; she also said the pension fund has investments with several foreign companies "that are engaged in development and investments in Iran." Ms. Steelman is calling for the "immediate divestment of holdings in companies under investigation for terrorist acts," and she plans to call for changes in the state employees' retirement system's policy to increase scrutiny of investments, the statement said.
Gary Findlay, executive director of MoSERS, said the Arab Bank holding is part of a roughly $80 million investment in a Merrill Lynch enhanced index emerging markets fund. The retirement system has an $80,000 direct investment with Arab Bank as part of the enhanced index fund, he said.
The retirement board needs the assistance of the federal government to determine whether specific companies support terrorist activities or aid states that support terrorism, Mr. Findlay said, noting that the federal government had not warned the retirement system about Arab Bank. Based on current policies, Mr. Findlay said, there would be no reason to make changes based on the state treasurer's statement.
A spokesman for Arab Bank, who asked to not be identified, said bank officials have denied all allegations.
(correction appended)
