President Barack Obama has his foreign policy objectives, and Florida has its own. Chief Financial Officer Jeff Atwater is leaning on the Florida Legislature to strengthen the state’s economic sanctions against Iran just as Obama prepares to lift America’s.
“We’re going to show the rest of the world, that is hesitating, that Florida is not going to try to make a return on investment dollars in companies that are supporting a regime that is committed to destroying the only democracy in the Middle East, Israel, and to be at war with America. “
That’s harsh language for Chief Financial Officer Jeff Atwater, considered one of the most easy going and likeable political figures in Tallahassee. If it makes him sound more like a U.S. Senator, maybe because he’s considering a run.
Atwater swears there’s no connection. In fact, his vitriol against Iran dates back to 2007. He was a lawmaker and led the drive to drop $1.1 billion in state pension fund investments in companies tied to the pariah nation.
But the law gives the president and congress the power to override the sanctions, and now that Obama has struck a deal with Iran, Atwater wants the loophole closed.
“This is not something political, it’s not something that has come up that has been raised just on political fighting that’s taken place in Washington. This is historic, Florida is the leader, we have diverted resources that were going to go to this regime.”
When it comes to punishing outlaw nations, Florida can swing a pretty big sledgehammer. The Florida Retirement System was worth about $146 billion – that’s with a “B” – at the end of last year. It earned a 17 percent return for investors, making it an attractive vehicle. But taking the moral high ground comes with a cost. In the 1990s, Florida sold off most of its tobacco stocks and the result was a financial debacle. The state lost hundreds of millions of dollars.
Pension managers have been watching the stocks they had to sell off when Atwater’s sanctions took effect. Many of them were tied to oil companies. State Board of Administration senior manager Michael McCauley says losses are comparatively low.
“You could say had we not had that restriction, that policy limitation, the FRS, on kind of a constrained basis, would have had an investment return of 38 million dollars higher.”
Whether it’s legal for Florida to continue its economic sanctions may be another matter. An Atwater spokeswoman says based on the structure of the Iran deal, there’s no question Florida is within its rights.
But Florida State University constitutional law professor Mark Seidenfeld isn’t so sure. He says foreign policy is usually reserved for the president. However, some appellate courts have given states more leeway when it comes to inveseting.
“The problem would be it wouldn’t really be an investment decision, it would really be a symbolic statement by the state. But it is its own money.”
Obama promised Iran to pressure the 25 other states with economic sanctions to drop them. In Florida, the Legislature is going to have to decide again.
