By Rich Moniak
According to an early Wednesday story in MarketWatch, “Russian natural-gas giant Gazprom, oil-producer Lukoil and leading bank Sberbank are all penny stocks based on their trading on the London Stock Exchange.” The nosedive began to form eight days before Russia invaded Ukraine, which means the Alaska Permanent Fund Corp. missed the boat by not having already divested in all three companies.
That argument is only partly rhetorical. APFC is not supposed to “time markets or focus on short-term market conditions” when investing or divesting. But the war didn’t just suddenly break out. Russia has been backing armed separatists in eastern Ukraine since 2014. They began a major military buildup on its shared border a year ago.
And APFC chairman Craig Richards is wrong to say divesting “from Russia is really a political decision.”
APFC is guided by the principal of maximizing the return of long-term investments at the exclusion of the harm a business might cause. That’s a premediated political decision. It grants freedom for investment manages not to act in situations like this.
Furthermore, war is not politics. It’s always brutally inhumane. The decision to look away is a matter of conscience. And a board with a moral conscience doesn’t need to wait for the governor or Legislature to act. It was within their right to immediately initiate a request to the divest from those businesses.
But suggesting his conscience is censored, Richard’s rotely stated “the board looks for direction on these types of issues to those that are policymakers.”
As of Thursday morning, all Gov. Mike Dunleavy has done is direct questions on the matter back to APFC and blithely suggest the Senate minority could draft legislation to require divestment from Russian businesses.
The tidy little focus on the iconic dollar is what created the convenient cop-outs on display. It allowed APFC to invest in Rosneft, a Kremlin-owned oil business run by oligarchs. Rosneft has provided fuel for the Russian war machine that is now attacking heavily populated urban zones.
At least two oil giants long-accused of prioritizing the bottom line over everything else understand the severity of the situation.
BP decided to let go of its 20% stake in Rosneft.
That was followed by Shell’s decision to terminate its involvement in the Nord Stream 2 gas pipeline constructed by Gazprom, another company primarily owned by the Kremlin. One of its many subsidiaries is Gazprom Media, which is telling TV viewers that images of the war they might be seeing from other sources are fake accounts produced by the U.S. and our allies.
I’d be wrong though to give credit to BP and Shell for stepping up on their own. To get the ball rolling, BP needed a firm nudge from the U.K. government.
According to officials present at an emergency EU summit, they also needed an incentivizing kick to impose harsher sanctions. They got it from Ukrainian President Volodymyr Zelenskyy, who made an emotional appeal for help via video from Kyiv as Russians forces were attacking his country.
Zelenskyy hasn’t left capital city. Last week, he declined an America offer to help him evacuate. “The fight is here,” he responded, according to an embassy official in London. “I need ammunition, not a ride.”
That courageous act is an unanticipated extension of a promise from his May 2019 inauguration speech. While addressing the sacrifices already made by soldiers defending eastern Ukraine, he told his fellow citizens: “I assure you, for our heroes to stop dying, I am ready to do everything.”
His words that day also offer a lesson in humility rarely seen in American politics.
“I would very much like for you to not have my portrait in your offices,” Zelenskyy told those who would soon be serving in his administration. “A president is not an icon, nor an idol. A president is not a portrait. Put photographs of your children there, instead. And before making any decision, look them in the eyes.”
Now, what Zelenskyy and his fellow Ukrainians are showing is a willingness to make the ultimate sacrifice to defend their land and freedoms.
While here in Alaska, the people with the power to act against Russia are covering their eyes with heartless financial rules created to disarm their conscience.
• Rich Moniak is a Juneau resident and retired civil engineer with more than 25 years of experience working in the public sector.
