Rick Scott, Cabinet members OK Venezuela investment ban

With no discussion, Gov. Rick Scott and members of the Florida Cabinet Wednesday approved a policy to forbid any investments benefiting the Nicolás Maduro regime in Venezuela.

Scott, state Chief Financial Officer Jimmy Patronis and Attorney General Pam Bondi sit as Trustees of the State Board of Administration, which oversees state investments.

The state currently has no investments that involve Venezuela, Ash Williams, the SBA’s executive director & chief investment officer, told reporters.

Scott, widely expected to run for U.S. Senate next year, has championed opposition to President Maduro, calling out the government for placing opposition leader Leopoldo López under house arrest after he was released from prison following a 3-year sentence for leading anti-government protests.

“It’s disgusting what’s happening down there,” Scott said Tuesday. “Maduro needs to step down; he needs to release all political prisoners; we need democracy again.”

The policy bans any investments by the state’s $193 billion pension plan that would benefit the government of Venezuela, including “any securities issued by the government of Venezuela or any company that is majority-owned by the government of Venezuela.”

It will last “until such time as the SBA determines it is otherwise prudent to do so,” it says. Legislation (SB 70) also has been filed for the 2018 Session that would ban the state from doing business with the Maduro government or companies financially tied to it, including Goldman Sachs.

Sen. José Javier Rodríguez, the Miami-Dade Democrat who filed the bill, released a statement later Wednesday that, as of June, “the SBA holds 687,581 shares of Goldman Sachs stock worth $147,135,458 and $171,071,885 in Goldman Sachs bonds/paper and the SBA has several agreements with Goldman Sachs to manage funds.”

“The people of Venezuela need us to side with them not just in word, but also in deed,” Rodríguez said in the statement. “I welcome the SBA’s initial step and look forward to continuing to work with them on taking concrete steps to support the Venezuelan people during a deepening political and economic crisis of Maduro’s making.”

Williams said the pension plan is roughly 85 percent funded; the “unfunded liability” is the difference between the money it has and the money it needs to cover current and expected future payouts.

But financial experts generally call pension plans healthy if they’re at least 80 percent funded. That’s because employees retire at different times, making a virtual ‘run on the bank’ unlikely.

The latest guidance will be incorporated into the state’s Investment Policy Statement, Williams added. “It doesn’t have to be there, but we think it’s better that it be there,” he said.

“I think what we have done today, based on an analysis of the facts, the law and our fiduciary obligations, is completely appropriate,” Williams told reporters.