NC Treasurer asks for an act of Congress to make Russia pay for economic damages to pension plan

RALEIGH, N.C. (WECT) - North Carolina State Treasurer Dale Folwell is asking Congress to take dramatic measures to amend a federal law to allow lawsuits against Russia for the impact the invasion of Ukraine is having on state pension funds.

“On behalf of those who teach, protect and serve, I have to look at the impact of what this mass murderer has done to the actual investments inside the state pension plan,” Folwell said, speaking about Russian President Vladimir Putin.

That impact he’s talking about is $80 million — it’s a lot of money, but it’s actually a small portion of the state pension plan.

“As of Feb. 25, the Department of State Treasurer had minimal securities in its international equity portfolio that are domiciled in Russia, with just under $80 million or just 0.067% of the plans’ total holdings of $118.2 billion. The Supplemental Retirement Plan portfolio has about $12 million in exposure or 0.077% of that plan’s $15.5 billion in holdings, all within the international equity and index funds,” according to Folwell’s office.

Now, he is hoping Congress will amend the Foreign Sovereign Immunities Act, a law that limits who can file lawsuits against foreign nations.

Essentially, Folwell wants Congress to allow states to pursue economic damages in courts, meaning — sue them. This in turn could lead to the seizure of Russian Assets and properties that might have already been frozen through sanctions.

“Amending FSIA language to provide state pension funds with greater legal mechanisms to more easily recoup economic losses is a crucial step to impose serious financial consequences on the Russian tyrant, diminishing his ability to fund his evil war,” Folwell said. “We need to punish Putin and his cronies for pension and investment losses. North Carolina taxpayers and those who teach, protect and otherwise serve should not suffer that burden.”

It’s an ambitious plan that already is gaining support. On Thursday, the General Assembly passed a resolution supporting Folwell’s request.

“I am deeply grateful that our elected representatives took a stand of solidarity with the people of Ukraine, who are suffering a humanitarian crisis and loss of innocent civilian lives due to the brutal war crimes of Putin,” Folwell said. “It is comforting to know that in a time of political rancor when there are those who try to divide us, North Carolinians can unite under a righteous cause to stand up and be counted.”

It’s also getting national support.

“The treasurer’s initiative has drawn support from the State Financial Officers Foundation, and U.S. Sens. Thom Tillis and Richard Burr. He has spoken to other members of North Carolina’s congressional delegation. Other state treasurers have been reaching out to him to learn more about his proposal,” according to a press release.

Folwell says it’s critical for the state to ensure the safety of public money, no matter what.

“What we are asking congress to do, is create an exit ramp to a very long runway that would help us through the court of law recoup some of these losses. We cannot sell these securities because our custodian has informed us that these securities are not traded anymore,” he said.