Governor joins legislators in call for state to divest from Russia

A growing number of state lawmakers are asking the Alaska Permanent Fund Corp. to divest assets from any Russian government or state-owned institutions amid Russia’s war against Ukraine.

Senate Democrats last week were the first to initiate the call.

Then the governor joined in.

And House Speaker Louise Stutes later said the House planned to introduce legislation to order the corporation to sell its Russian investments. As an interim step, 18 members of the state House signed a March 3 letter asking the corporation to do so voluntarily.

“Russia’s hostile actions toward the Ukrainian people and government must not go unanswered,” the letter said.

Paulyn Swanson, a spokesperson for the corporation that manages the assets of Alaska's nest-egg fund, in a statement Feb. 28 said the corporation “is not contemplating a divestment strategy at this time.”

“We are closely monitoring the situation and as always, will strive to do what is in the best interest of the Alaska Permanent Fund,” she said.

Three days after Senate Democrats raised the issue, Gov. Mike Dunleavy joined calls for the state to divest from Russia. Dunleavy issued a press release on March 3, calling for a wide range of actions against Russia and to welcome Ukrainian refugees after they’ve been vetted.

The governor urged state agencies and the Permanent Fund Corp. to unload its Russia-based assets if and when that’s appropriate.

The Alaska Department of Revenue released a memorandum on March 3, saying that state retirement plans had around $115 million in investments in Russia as of Jan. 31.

“Due to extremely low valuations and limited, if any, ability to transact, the prudent course is to continue to monitor the Russian exchanges and divest, when and if appropriate,” the Department of Revenue’s memo said.

The Permanent Fund’s exposure to Russian investments represents 0.2% of its total assets. The total value of the fund, at the end of January, was about $81 billion.

Swanson, in response to questions, said that as of Jan. 31, “$160 million of the Alaska Permanent Fund is invested in Russian stocks, bonds and private market investments. In light of recent market dislocations, valuations are volatile.”

The corporation is aware of "the developing situation with regard to Russia and Ukraine and is assessing impacts to the portfolio during these dynamic and unpredictable times,” she said, adding that the corporation is monitoring the events “that are still unfolding with regard to Russia and is analyzing the appropriate response.”

In the letter urging divestment, five Senate Democrats in the minority caucus cited provisions of Alaska law that declare support for a so-called nuclear freeze policy. The lawmakers said those provisions require the state to take action to reduce the risk of nuclear war and said they believe those also mean implementing “a divestment plan from Russian government or state-owned companies.”