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States BP Investments

June 16th, 2010 by flanews

The state is holding onto 170 million dollars worth of BP stock and bonds despite their falling value and the financial trouble the company is causing Florida. When the state took on big tobacco in the early 90s, it sold all its stock in cigarette companies to make a statement against smoking. As Whitney Ray tells us, dropping the stock will be one of the issues discussed when the states investment board meets again in September.

When Florida sued the tobacco industry in 1995, the state couldnt get rid of its cigarette stock fast enough.

Then Governor Lawton Chiles spearheaded the decision to sell; believing it was hypocritical to attack tobacco and still invest in its future.

Lawtons son Bud, who is running for governor, sees a similar scenario with the 170 million dollars the state holds in BP stocks and bonds. But Bud says the decision to sell should be weighed carefully.

This is a very uncertain company at a very uncertain time, and it is something that the state should really look hard at, said Chiles.

One of the state officials charged with overseeing pension fund investments is Chief Financial Officer Alex Sink. Sink says the board should consider selling.

It should clearly be on the radar, said Sink.

Adding fuel to the fire is BPs falling value. The states BP stock has lost 67 million dollars worth of its value since the oil rig exploded April 20th.

The State Board of Administration isnt worried about the falling value, because the state pension is valued at 113 billion dollars and its investments are long term.

BP holdings are just a minuscule portion of the overall investments we have in the pension fund, said MacKee.

Also keeping BP stock allows the state to participate in shareholder meetings, giving Florida a say-so in companys future. Shortly after the Exxon Valdez spill in 1989, Exxon stock fell to 11 dollars a share. Today it is trading around 90 dollars.

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