NC treasurer wants Congress to make it easier for states to sue Russia over economic losses

Treasurer Dale Folwell says certain assets with ties to Russia in the state retirement fund are nearly worthless. He wants Congress to revise a 1976 law to make it easier for states to file private lawsuits against Russian companies.

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State Treasurer Dale Folwell
Bryan Anderson
, WRAL state government reporter
RALEIGH, N.C. — North Carolina State Treasurer Dale Folwell is pushing for Congress to include a provision in its next aid package to Ukraine to allow treasurers across the country to sue Russian-based entities over investment losses incurred as a result of Russian President Vladimir Putin’s military invasion.

Folwell said Tuesday that the state’s $120 billion retirement plan included a small amount of assets with ties to Russia, though the value has dropped precipitously since the conflict in Ukraine began in February.

About 1 million state residents participate in the state retirement plan, which includes a collection of bonds, index funds and stocks in individual companies.

Certain Russia-connected securities held in the plan are worth about $30 million but they are effectively worthless since they are inaccessible and tied up in a larger international BlackRock index fund, Folwell said during a conference call with reporters. The state has held that fund for nearly a decade.

Folwell said he’s spoken with U.S. Sens. Richard Burr and Thom Tillis of North Carolina, anti-terrorism lawyers and nearly two dozen state treasurers and plan administrators about how to get Congress to help states recoup losses.

“We’re working with some very talented subject matter experts who have a track record of suing terrorists who have conducted themselves in such a way that money can be recaptured and they are helping us develop the language that would be necessary to put into a bill,” Folwell said.

He wants Congress to update a 1976 law known as the Foreign Sovereign Immunities Act. Sanctions imposed by President Joe Biden’s administration and subsequent decisions by money managers have frozen Russian assets. But international law makes it difficult for institutional investors and state pension funds to pursue private lawsuits to recover losses.
State House lawmakers in March unanimously approved a resolution condemning Russia’s attack on Ukraine and calling on federal lawmakers to revise the 1976 law so it could allow for “more effective recourse for state pension funds and other institutional investors to hold corrupt regimes and foreign state-owned corporations accountable in U.S. Courts for their actions.”
On March 15, Biden signed off on a $13.6 billion spending bill to provide military and humanitarian assistance for Ukraine to fight back against Russia. Folwell on Tuesday said he hoped the 1976 law would have been amended through that assistance and is now working to get it folded into future legislation.

“That train left the station,” Folwell said. “But there’s more Ukrainian aid packages that are coming through, so we’re trying to hitchhike onto one of those bills.”