State pension funds would have to pull millions of dollars in investments from Russian stocks and bonds under a measure the Illinois General Assembly has approved and that the governor is expected to sign into law.
The measure unanimously passed the House in April of this year following the attack in February by Russian President Vladimir Putin. But the turnaround for the Senate to consider it was too quick for it to be made into law by the end of regular session, according to some lawmakers. Still, some Republican lawmakers have criticized the delay, given that Democrats control the General Assembly and the governor’s office.
The bill, which will become law following a signature from the governor, orders state pensions and other funds to divest from Russian and Belarusian stocks, bonds and pooled investments involving those countries. State pensions cannot withdraw all investments in a particular nation unless state lawmakers approve it.
Belarus, which borders Russia and Ukraine, supported and played an active part in the aggression against Ukraine, according to multiple reports. The country shares a close economic relationship with Russia.
The measure was approved unanimously in the Senate earlier in November, then the amendment was approved 109-0 by the House on Wednesday.
“The Illinois General Assembly joins the international community in denouncing Russia’s ongoing, unconscionable acts of aggression against the Ukrainian people,” Illinois Senate President Don Harmon (D-Oak Park) said in a statement.
During a committee meeting Tuesday, Reps. Lindsey LaPointe (D-Chicago) and Keith Wheeler (R-North Aurora) illustrated the bipartisan agreement about this legislation.
The measure “is the state of Illinois’ response to the devastation and heartbreak that the whole world has been witnessing for almost a year in Ukraine caused by Russia,” LaPointe said. “We have been watching it from afar. Some of us have been more up close to refugees.”
Wheeler talked about the careful work he undertook on the bill with LaPointe.
LaPointe was wearing a badge with a Ukraine symbol on it when she presented the amendment for approval.
“You and I spent a whole day trying to get amendments ironed out, to get this as right as we could get it,” Wheeler said, “to address an issue that’s important to the world, not just us personally.”
While GOP members of the Senate also expressed support, one member urged caution regarding these types of sanctions in the future.
“Setting a hard baseline is important,” Senator Craig Wilcox (R-McHenry) said. “We cannot allow ideological differences within the General Assembly to drive the issuance of state sanctions. I do have concerns over what this could turn into if we don’t develop a firm set of ground rules for when this kind of action is appropriate.”
Tim Blair, director of the State Employees Retirement System, described support for the measure as universal.
The measure received strong support from Democratic leaders throughout the state following the invasion, including Governor J.B. Pritzker. He reiterated his support following its passage.
“This is an important step in demonstrating support for the people of Ukraine and in condemning the unlawful invasion and occupation of Ukraine by Russian forces,” according to a statement released by the governor’s office. “That’s why the governor directed the Illinois State Board of Investments to investigate this disinvestment process, and it’s why he will be proud to sign this bill.”
State pension funds had earlier expressed willingness to sell Russian assets, but their hands were tied by the law. Some funds in Chicago were able to divest independently of the General Assembly bill.
A May report by the Better Government Association identified more than $112 million in Russian assets in the large pension portfolios in Illinois. A spokesperson in the governor’s office said the total current share of these investments in the systems is less than 0.01%.
MOEX, the largest Russian stock exchange, is down almost 25% since the war began in Ukraine. It’s unknown how the market drop has affected remaining assets in Illinois pension funds.
The law will also require public universities to disclose endowments and donations from Russia. The U.S. Department of Education’s foreign gifts registry shows the University of Chicago accepted $325,000 in gifts from non-governmental sources in Russia in 2021, and had no recent gifts or contracts involving public schools.
The University of Chicago did not respond to questions about this money.
The bill grants the state’s Department of Human Services emergency rulemaking powers so refugee resettlement programs can make it easier for those displaced by the war to access health care, mental health services and English language assistance.
It creates a Money Laundering in Real Estate task force that’s charged with assessing how vulnerable the real estate market is to Russian money laundering, and creates another task force to evaluate foreign interference in recent elections in Illinois that would make recommendations to prevent it in the 2024 election.