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Minnesota lawmakers outline plan to divest state assets tied to Russia, Belarus

The divestment of funds won’t cause a massive hit to Russia’s bottom line. But lawmakers and Ukrainian Americans said no Minnesota money should help Vladimir Putin’s government.

state Sen. Karin Housley
“This is important for Minnesota to send a message that we stand firmly with Ukraine and strongly condemn the Russian government’s actions,” said state Sen. Karin Housley at Thursday’s news conference.
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Minnesota lawmakers have been exploring how to sanction Russia since the country invaded Ukraine in late February.

On Thursday, a bipartisan group of legislators said they had coalesced around a strategy, pledging on Thursday to make the Minnesota State Board of Investment (SBI) divest holdings from companies based in Russia and block the state from contracting with Russia. Legislators also plan to target Belarus for divestment and contracts.

“This is important for Minnesota to send a message that we stand firmly with Ukraine and strongly condemn the Russian government’s actions,” said Sen. Karin Housley, R-Stillwater, at a news conference.

The divestment of funds won’t cause a massive hit to Russia’s bottom line. Legislative officials estimate state investments tied to Russia were about $53 million before the invasion. But lawmakers and Ukrainian Americans said no Minnesota money should help Vladimir Putin’s government.

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The proposed legislation is similar to past divestment sanctions put on Iran and Sudan.

What the bill would do

Last week, Gov. Tim Walz said he planned to explore whether the investment board should sell off holdings in Russian-tied companies, and cited past action to Iran and Sudan as precedent. 

As of Dec. 31, the Board of Investment managed a total of $135.7 billion in assets, made up largely of money connected to pension and retirement funds for public workers. Other assets are tied to things like state trust funds and agency cash accounts.

Walz also issued an executive order stopping state agencies from contracting with Russian entities. He also called on the Legislature in a letter Monday to direct the SBI, saying legislation is the “prudent way to take this action.”

The bill proposed in the Senate by Housley and in the House by Rep. Sydney Jordan, DFL-Minneapolis, is similar to the divestment laws for Sudan and Iran. As written, it aims to have the SBI sell over 15 months its holdings in companies with operations in Russia that are “subject or liable” to sanctions under federal law, though there are exceptions.

The bill is proposed in the House by Rep. Sydney Jordan.
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The bill is proposed in the House by Rep. Sydney Jordan.
Companies that publicly announce a plan to stop sanctioned business operations within a year are exempt, as are operations tied to the retail sale of gasoline and related products. Businesses primarily focused on goods or services intended to “relieve human suffering” are not targeted with sanctions. The same is true for companies that promote health, education, journalism, religion or welfare activities in Russia.

The legislation also codifies Walz’s executive orders stopping state agencies from contracting with institutions or companies headquartered in the Russian Federation or doing business primarily in the federation. 

House Speaker Melissa Hortman, DFL-Brooklyn Park, said lawmakers will send the bill through the regular committee process, but she expects it to pass quickly, within seven to 10 days.

But the legislation will get amended in the House to target Belarus and might be changed in other ways.

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Jordan, the Minneapolis DFLer who represents neighborhoods where many Ukrainian Americans live, said even if $53 million isn’t a huge dent in the economy of Russia, “our budgets and where Minnesota spends our dollars is our morals.”

“We can spend this money, $53 million combined with all of the democracies of the world standing up and making a change makes a big difference in the Russian Federation’s budget and it’s the least we can do,” Jordan said.

Bill backed by Ukrainian and Jewish groups

At the news conference Thursday, Luda Anastazievsky, who chairs the Minnesota Ukrainian American Advocacy Committee, spoke in support of Jordan and Housley’s bill. 

Luda Anastazievsky
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Luda Anastazievsky
Anastazievsky said she was born in the Ukrainian city of Mariupol and spent her childhood and youth there before moving to Minnesota in 1990. She said she has family and friends in Mariupol still, which has faced heavy Russian shelling and attacks for weeks, including the bombing of a maternity hospital. Anastazievsky said she can barely function and is anxious and worried because she can’t get ahold of the people she knows and doesn’t know if they’re alive.

“I take a shower and I think ‘they haven’t had water for 12 days by now,’” Anastazievsky said. “I fall asleep in my warm bed wondering how they survive without heat and whether they’ll be able to sleep knowing that bombs could fall at any moment. I make breakfast and wonder if they’re cooking outside in the cold over an open fire. That’s why this bill is very important to me. Russia has to be stopped. 

“Our state can’t provide defensive weapons, but it can fight back and defend Ukraine,” she said.

Anastazievsky also said she has taught in Minnesota public schools for the last 30 years, and has pension money tied to the SBI. “As a public employee I don’t want my money going to Putin to fill his war machine,” she said. “Russia must feel economic pressure if we hope to stop this war and deter future aggression.”

Anastazievsky said she has pushed Walz to take “concrete steps” on accepting Ukrainian refugees and procuring medicine and potentially body armor to send to Ukraine. Jordan also said there could be other legislation related to Ukraine lawmakers might propose, but said the new proposal was what House Democrats and Senate Republicans could agree to for now.

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Asya Mikhailenko Sturgell, a volunteer with the Minnesota Ukrainian committee and a native of Kyiv who moved to Minnesota in 1992, said her uncle’s family has relocated to central Kyiv to help their 93-year-old grandmother who needs around the clock care. Her aunt has been cooking food for soldiers, guarding against “infiltrator gangs” and combing stores for food and medication, she said. 

Asya Mikhailenko Sturgell
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Asya Mikhailenko Sturgell
“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 family and friends can go back to living their lives in peace,” Mikhailenko Sturgell said.

Ethan Roberts, director of government affairs for the Jewish Community Relations Council of Minnesota and the Dakotas, said he had helped coordinate this bill to help Ukrainians — and because his organization doesn’t “just speak about remembering the lessons of the Holocaust.”

The organization wants to make “sure it’s not repeated, on the fields, in the streets, of Europe again,” Roberts said.