NC Treasurer asks Congress to make it easier for states to seize Russian assets

North Carolina State Treasurer Dale Folwell wants Congress to update a 1976 law so state pension funds could seek economic damages for losses resulting from Russia's invasion of Ukraine.

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Bryan Anderson, WRAL state government reporter,
Cullen Browder, WRAL anchor/reporter
RALEIGH, N.C. — North Carolina State Treasurer Dale Folwell on Wednesday called on the federal government to provide an easier pathway for the state to file lawsuits in U.S. courts that could lead to the seizure of Russian assets and properties.
Treasury staff identified investments in the state pension fund supporting Russian-based entities worth $80 million as of Feb. 25. The state says the value of those investments has since dropped by more than 60% to $31 million. The sum pales in comparison to the to the total $118 billion state retirement plan, which covers about 1 million residents.

"If there's been $1 of loss to our pensioners and our taxpayers as a result of this, that's $1 too many and our responsibility is to try to recoup it," Folwell said in an interview. "Even with all the volatility, the pension plan of North Carolina remains one of the safest and most secure, well-funded pension plans in the United States, if not the world."

Much of the money the state pension fund has that benefits Russia may not be possible to divest because it is tied up in larger funds or inaccessible.

To address the roughly $50 million shortfall, Folwell said he wants Congress to update a 1976 law so that state pension funds could seek economic damages for losses incurred as a result of Russia's ongoing invasion of Ukraine. Since Russian President Vladimir Putin sent military forces to the country, Russian assets have plummeted in value, affecting international equity funds held within North Carolina's pension fund.

Folwell said he has spoken with Republican U.S. Sens. Richard Burr and Thom Tillis about the issue and is reaching out to other North Carolina congressional members.

While federal sanctions have frozen certain assets tied to Russia, international laws can make it difficult to confiscate them through private lawsuits, according to Folwell.

He hopes a court fight would prove more beneficial than liquidating assets.

"Selling something at a loss is not really what I'm supposed to be doing is the keeper of the public purse," Folwell said. "I want to try to, through this action, recover the losses that the pensioners and taxpayers in North Carolina have suffered."

Stocks in individual companies can be bought and sold more freely, though Folwell has suggested divestments ought to come from the companies themselves.

The state pension fund had nearly $19 billion in individual stocks from more than 1,000 companies, as of Dec. 31, according to the most recent filing with U.S. Securities and Exchange Commission.

In a statement Wednesday, Folwell said his desired revision to the Foreign Sovereign Immunities Act is "a crucial step to impose serious financial consequences on the Russian tyrant, diminishing his ability to fund his evil war."

He added, “We need to punish Putin and his cronies for pension and investment losses. North Carolina taxpayers and those who teach, protect and otherwise serve should not suffer that burden.”

In the meantime, the state treasurer wants the North Carolina General Assembly to pass a resolution that condemns Russian violence in Ukraine and also pushes for Congress to amend the 1976 law.