It looks like the General Assembly will pass some kind of legislation calling for the Virginia Retirement System to divest its holdings in companies doing business in Sudan, although the final details have yet to be worked out. (For a recent update, see this article in the Virginian-Pilot.)

The cause is unquestionably just: The Sudanese regime, culpable for the genocide in Darfur, is an international pariah. The Western world should treat it as such. SB1331, introduced by Sen. Ken Cuccinelli II, R-Fairfax, would require the VRS to divest itself of its investments in some eight foreign companies, mostly involved in the oil business, that do business in Sudan. As the Western world cannot bestir itself to send in troops to stop the slaughter, one could argue, we should at the very least make oil companies pay a price for propping up the rogue regime.

On the other hand, I do get nervous about telling the VRS how to invest, or divest, its money. Today it’s the Sudan. Tomorrow, it’s…. who? The Sudan is not the only objectionable regime in the world — its atrocities just happen to be better publicized than those of others. Should we divest ourselves of companies that do business in Burma? How about Saudi Arabia, the underwriter of radical Islamic madrassas, and a root cause of terrorism, around the world? Or, changing gears, should the VRS divest itself of companies that sell armaments to foreign governments… or emit greenhouse gases…. or fail to pay a “living wage”?

In other words, should VRS investment policies be subject to second guessing by anyone, for any cause, who can mobilize enough votes to get a majority vote in the General Assembly? As the VRS Board of Trustees argues, earnings from investments finance about 70 percent of the retirement system’s benefit payments. Restrictions on those investments could reduce earnings “at a cost to be borne by taxpayers.”

It’s a tough call. My heart sides with Cuccinelli. My reason sides with the VRS.