Gov. Rick Scott will ask the Florida Cabinet next month to prohibit the state's investment managers from doing something they already do not do: invest in companies or securities owned or controlled by the Venezuelan government.
The proposed resolution released by the governor’s office on Thursday stops short of advancing a bolder threat Scott had been making at public appearances as recently as last week when he vowed to boycott companies that “do business” with the Nicolás Maduro regime.
Instead, the vote on the resolution -- scheduled for the Aug. 16 meeting of the State Board of Administration -- will be a mostly-symbolic gesture aimed at sending the message that Florida will not tolerate any business sympathetic to the Maduro regime going forward. The SBA oversees the Florida Retirement System and its $150 billion in assets.
"We currently do not maintain any investments owned by the Venezuelan government right now,'' SBA spokesperson John Kuczwanski told the Herald/Times. The governor's resolution will not change that but make sure it doesn't change going forward.
Under the governor’s proposal, the SBA will be:
•Prohibited from investing in any securities issued by the government of Venezuela or any company that is majority owned by the government.
•Prohibited from taking a shareholder proxy vote that advocates or supports the Maduro regime.
•Prohibited from doing business with any financial institution or U.S. company which directly, or through a subsidiary, violates federal law by making a loan, extending credit, or makes purchases with the government of Venezuela.
"The atrocities happening at the hands of the brutal and oppressive Maduro regime are unspeakable,’’ Scott said in a news release detailing his proposal. “I have heard firsthand from Floridians about the need for change in Venezuela. Prohibiting the Florida State Board of Administration from making investments that support Nicolas Maduro is a big step in the right direction, and we must continue to find ways to bring freedom and democracy to Venezuela.”
Scott, who is expected to run for U.S. Senate next year, has been courting South Florida voters with tough talk on the Maduro government.
“Next month, at my next Cabinet meeting, I will be proposing a resolution that will say any organization that does business with the Maduro regime cannot do business with the State of Florida,” Scott proclaimed at a July 10 rally at the El Arepazo restaurant in Doral. The crowd cheered.
If he had followed through on his threatened boycott of companies that do business with the Maduro region, it would have affected companies like Goldman Sachs Asset Management, which purchased $2.8 billion in bonds in May from Venezuela’s state-run oil company, and companies like Delta Airlines and McDonald's restaurants which still operate in the country.
Although the governor, attorney general and state chief financial officer act as the State Board of Administration, they need a state law to sell off large amounts of assets that could affect the profitability of the Florida Retirement System funds, as the Herald/Times wrote last week. Additionally, a 16-year-old U.S. Supreme Court ruling may bar them from telling state agencies to boycott companies that do business in Venezuela. Read more here.