Minnesota legislators push to divest state pension funds from Russia

Minnesota legislators are pushing to sever all state financial ties to Russia following its attack on Ukraine, including divesting millions from state pension funds and indefinitely banning government agencies from contracting with businesses that have ties to the Russian Federation.

"We stand with Ukraine and free democracies across the world who have a right to exist in peace," said Sen. Karin Housley, R-Stillwater, the lead sponsor of the Senate bill.

Those state investments with connections to Russia were worth an estimated $53 million prior to the invasion of Ukraine, according to a bipartisan group of lawmakers who unveiled the proposal on Thursday. Leaders said they expect to move the legislation quickly so those divestments can start soon.

The move follows an executive action from Gov. Tim Walz last week ordering more than two dozen state agencies to end any contracts with Russian entities and barring those agencies from entering into future contracts. The legislative proposal codifies that order in state law and has the backing of lawmakers in the GOP-led Senate and DFL-controlled House.

"We can't allow a single cent from our state to line the pockets of oligarchs and despots who sanction the murder of innocent citizens," said Rep. Sydney Jordan, a Democrat and sponsor of the bill who represents a large number of Ukrainians living in northeast Minneapolis. "It is not every day that you see this particular group of legislators pushing the same bill."

Walz, who supports the move, sent a letter to legislative leaders on Monday encouraging them to pass a bill to direct the State Board of Investment to withdraw investments in Russian businesses and institutions. He said passing legislation is the most "prudent" course of action.

Minnesota's State Board of Investment manages investments for both active and retired members of three statewide retirement systems. There's precedent for the action: The state board has divested pension funds from entities with ties to Iran and Sudan in response to past humanitarian crises.

"Our Ukrainian Minnesota communities are woven into the fabric of this state," Walz said in his letter. "Without Ukrainian Minnesotans there is no Minnesota. Let's work together to take this important step to prudently end Minnesota's investments in Russian entities."

Minnesota is home to more than 17,000 Ukrainians, some of whom have struggled to get in touch with loved ones since the Russian invasion began. Luda Anastazievsky moved to Minnesota in the '90s after growing up in Mariupol, which has been pounded by Russian shells and airstrikes. A maternity ward was struck in the city on Wednesday.

"I want to use my Minnesota nice answer and say I'm fine, but I'm not. Honestly, I can barely function because my family and friends in Mariupol are in a city under siege," she said. "I do not know how any of them are doing or even if they are alive."

State leaders across the country are joining the federal government in imposing sanctions intended to hurt Russia's economy and try to cripple its military actions in Ukraine. The Biden administration has banned Russian oil and natural gas imports, cut off financial institutions' access to global banking systems and prohibited some Russian companies from raising money in U.S. markets.

Members of Asya Mikhailenko Sturgell's family have relocated to Kyiv since the war broke out to care for her 93-year-old grandmother, who needs round-the-clock care. She's worried what will happen if things get worse and they need to flee the city with her ailing grandmother.

"I see this bill as a way the Minnesota Legislature can take responsibility to cut commercial ties with the Russian government and hold them accountable for these horrendous acts of war, so that my friends and family can go back to living their lives in peace."