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GOP Texas Gov. Greg Abbott has identified as China a hostile nation. He’s accused it of “triggering the catastrophe” of the COVID-19 pandemic.
That’s the declare from Don Huffines, just one of the Republican gubernatorial candidates difficult Abbott in the state’s March 1 principal.
“Below Greg Abbott’s management, Texas is putting taxpayer dollars into Chinese organizations,” Huffines declared in an advert on Facebook and Instagram.
Abbott is not immediately investing tax revenue in Chinese companies.
Huffines’ declare alludes to investments in Chinese companies created by the state’s general public pension programs. Those people devices are funded in element with tax bucks, but their investments are not directly managed by the governor or his appointees.
How the governor’s race styles up
Huffines is a Dallas businessman and previous Texas condition lawmaker. Abbott is trying to find his 3rd 4-12 months time period as governor.
The Democratic principal, whose candidates involve former U.S. Rep. Beto O’Rourke, is also contested.
Total, the race has been sized up by campaign watchers as possible or sound Republican.
What Huffines’ declare refers to
Huffines’ ad inbound links to a February 2022 tale from the San Antonio Convey-News. The tale documented that $9.12 billion is invested in businesses in China as a result of Texas’ seven community pension money.
The tale indicated that the accountability for expenditure choices is not primarily Abbott’s.
It mentioned that commonly, “there is a dividing line involving decisions produced by politicians and these made by the pension funds administrators,” although the Texas Legislature has ordered pension resources to divest from businesses that boycott Israel, from Sudanese and Iranian corporations, and from those of other nations thought to sponsor terrorism.
The governor’s constrained role
“The Texas governor has definitely no direct affect on the certain expense decisions of any of the pension resources,” reported John Diamond, director of the Center for Community Finance at Rice’s Baker Institute for Public Coverage.
The role is confined to oversight.
With the advice and consent of the state Senate, the governor appoints the associates of the Texas Condition Pension Review Board, which oversees all Texas public retirement devices. The governor also appoints just about all board users of the pension programs.
There are, in switch, a range of layers between the governor and the persons who make the investment choices for the 7 systems.
For instance, the Texas County & District Retirement Technique has a board appointed by the governor, with the information and consent of the state Senate, that sets investment policy. But an executive director and staff members run the working day-to-day operations and the process hires non-public consultants who in switch recommend on choosing professional professionals, such as JP Morgan, to deal with a variety of expense portfolios within just the method.
The expenditure resources appear from contributions made by authorities employees and the companies, such as unique county governments. For illustration, the Trainer Retirement Program is funded by 8% staff contributions and 8.87% employer contributions, which are from taxpayer funds.
In March 2021, the Pensions & Investments trade publication described that the Texas County & District Retirement Method dedicated $40 million to a Beijing-primarily based supervisor to be split among two China-focused private equity/venture cash money. The two resources aim on early-phase and progress-stage Chinese technology companies.
“It looks really not likely that Governor Abbott is personally directing any of the financial investment choices of the a variety of Texas point out and area pension cash. Incredibly not likely,” explained economics professor Dennis Jansen, director of the Personal Organization Investigate Centre at Texas A&M College.
Anyone investing in a passive planet index fund, this kind of as Vanguard’s Total Intercontinental Stock fund, is investing partly in China, or in several intercontinental funds, Jansen added.
“It is not as if China is a tiny part of the global economy. Acquiring appropriate diversification across industries and nations is effectively-set up expense advice,” he explained.
The Huffines and Abbott campaigns did not respond to our requests for remark.
Our ruling
Huffines explained in an advertisement: “Below Greg Abbott’s leadership, Texas is putting taxpayer bucks into Chinese organizations.”
Texas community pension resources, which incorporate taxpayer funds, have invested in Chinese organizations.
But Huffines’ use of the term “management” indicates Abbott is directly main the financial investment choices. He is not undertaking that, Abbott’s role is limited. The governor appoints the boards that oversee the community pension units, and the day-to-day financial investment decisions are designed by the units, not Abbott.
Huffines’ assertion is made up of an factor of reality but ignores essential points that would give a unique impact. Which is our definition of Mainly Phony.
Resources
- Facebook, Don Huffines ad on Greg Abbott and China, Feb. 10, 2022 to Feb. 11, 2022
- San Antonio Convey-News, “Texas invests over $9 billion in China inspite of ‘hostile nation’ rhetoric from GOP leaders,” Feb. 10, 2022 current Feb. 12, 2022
- Texas A&M College Private Company Research Center, “Texas Pension Woes,” April 2021
- E-mail, economics professor Dennis Jansen, director of the Private Organization Study Center at Texas A&M University, Feb. 22, 2022
- Electronic mail, John Diamond, director of the Middle for Community Finance at Rice’s Baker Institute for Community Coverage, Feb. 21, 2022
- Pensions & Investments, “Texas County & District commits $40 million to China-focused cash,” March 17, 2021
- Texas statutes, “Instructor Retirement Procedure Of Texas,” accessed Feb. 22, 2022
- Staff members Retirement System of Texas, “ERS Trustees,” accessed Feb. 22, 2022
- Texas Municipal Retirement Technique, “Trustees,” accessed Feb. 22, 2022
- Texas Crisis Companies Retirement System, “Board of Trustees,” accessed Feb. 22, 2022
- Texas County & District Retirement Method, “Energy in Figures,” accessed Feb. 22, 2022
- Texas County & District Retirement Procedure, “Executive Leadership,” accessed Feb. 22, 2022
- Texas County & District Retirement Program, “TCDRS Investment decision Supervisors,” accessed Feb. 22, 2022
- Texas County & District Retirement Technique, “TCDRS Expenditure Plan,” Dec. 2, 2021
- Texas County & District Retirement System, “Our Oversight & Guidance,” accessed Feb. 22, 2022
- Texas County & District Retirement System, “TCDRS Funding Policy,” June 25, 2015