Newspaper: Steelman funds not “terror free”
Monday, December 20, 2010
ST. LOUIS (AP) — Former Missouri Treasurer Sarah Steelman has often encouraged avoiding investing in companies that do business in countries that sponsor terrorism, but Steelman had actually invested in such companies herself, a newspaper reported Sunday.
Financial disclosure statements showed that while Steelman was touting terrorism-free investing, she owned mutual funds that bought stock in companies engaged in activities she had denounced, the St. Louis Post-Dispatch reported.
Steelman, 52, was a state senator before her election as treasurer in 2004. By 2006, Steelman claimed that hers was the first public agency in America to invest money in a fund that specifically excluded companies that do business in Iran, Syria, Cuba or Sudan. North Korea also was on the list, but the country is no longer classified as a terrorism sponsor.
“It seems strange to me that we send young men and women to defend freedom, some of who pay the ultimate sacrifice,” Steelman said on National Public Radio in 2007. “However, we have not yet used our most powerful weapon, America’s financial markets.”
Terror-free investing is generally defined as divesting from any company that has nonhumanitarian business in any nation on the State Department’s sanction list. That includes owning equity in the company directly, or through a mutual fund. Mutual funds typically spread risk by investing their holdings in many stocks.
Steelman, a Republican, who is running for the U.S. Senate seat held by Democrat Claire McCaskill, owned mutual funds that had interest in an oil firm that works in sanctioned nations. Another fund bought a stake in a Russian conglomerate that has an agreement with Iran.
A spokesman for Steelman said she sold interest in both funds this year.
Steelman also acknowledged to the Post-Dispatch that her personal holdings included companies that would not have passed the terrorism-free test she employed as treasurer.
“There are not products available to individual investors, so it can’t be a cleaner portfolio, unfortunately,” Steelman said. “I wish it was.”
Steelman, a Republican from Rolla, said part of her aim in office was to pressure Wall Street to make instruments such as terrorism-free mutual funds more widely available to individuals.
“I’ve always said that’s a problem,” Steelman said. “Right now, it’s next to impossible to screen any of these funds for companies that are doing business in terrorist sponsor states.”
McCaskill’s office said she did not screen her investments for ties to certain countries, but she hasn’t touted terrorism-free investment as an issue. A McCaskill spokesperson also said most lists of terrorism-free investments are incomplete or inaccurate, making it difficult to track individual funds.
Information from: St. Louis Post-Dispatch, www.stltoday.com