Montgomery County’s efforts at divesting from companies doing business in Sudan cost the county employees’ pension fund nearly $50,000 earlier this year, according to a new county report.
The County Council passed a law in April 2008 prohibiting managers of the county’s $2 billion Employment Retirement System from investing in companies doing business with Sudan’s government in an attempt to stop the conflict in that country’s Darfur region.
In December, the county discovered that one company it had more than $340,000 invested in a Swiss power company, ABB Ltd., which was listed as a “highest offender” by the Sudan Divestment Task Force for its work on a large dam project that the task force said was hurting the country’s marginalized populations.
On Feb. 14, the county ordered an investment manager, who had bought 22,980 shares of the company for $14.82 per share in October, to sell the stock within 12 months. The investment manager sold the shares for $12.59 three days later.
The county paid a consultant $11,500 for one year to help identify which companies to divest from the county’s pension fund. There are more than 5,000 active employees who contribute to fund and 5,000 more retired members as of last year.
Six weeks later, the consultant said ABB was an acceptable investment again because of contributions it has made to the International Committee of the Red Cross for Sudan-based programs, the county report said.
Two days later, the investment manager repurchased ABB stock, this time for $14.66 a share. The total loss for selling the stock and then buying it again: $47,570.
The company closed at $20.10 a share Friday.
Councilman Marc Elrich, D-at large, was the chief sponsor of the legislation to divest from Sudan. He said he would “rather lose a little money … then make money dealing with companies that invest in places like Sudan.”
“I mean, this is a godawful place,” he said.
The county also hasordered an investment manager to divest $100,470 from a Finnish power company.
