Statewide NewsTaxes & SpendingTexas to Divest from Russian Businesses, Comptroller Says

The decision from the State of Texas comes as the Russian invasion of Ukraine moves into its second week.
March 4, 2022
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In response to Russia’s ongoing invasion of Ukraine, Texas Comptroller Glenn Hegar announced the state will divest state dollars from Russian-affiliated individuals and businesses.

“For a week, we have witnessed Vladimir Putin’s vicious disregard for international law, national sovereignty and basic human rights,” reads an open letter from Hegar. “We will be acting as swiftly as possible to divest any holdings with ties to the Russian state or Russian nationals.”

The state has a $248.5 billion biennial budget but it’s unclear how much of that is tied to Russian-affiliated businesses. An accounting to narrow that down is underway.

“Earlier this week, I instructed my staff to review every state contract and procurement in our Statewide Procurement Division and every payment made through the Texas Treasury for ties to Russian-owned businesses,” Hegar announced. “The Texas Treasury Safekeeping Trust Company, which manages the Treasury Pool, Economic Stabilization Fund and other endowments and investments, is working to identify any direct or indirect investments with Russia.”

The Treasury Pool currently has a balance of $57 million and it oversees around $65 billion in state assets. The Economic Stabilization Fund (ESF), colloquially called the state’s savings account, has over $10 billion in escrow right now.

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The ESF is funded by severance taxes collected from oil and gas sales.

The federal government has levied economic sanctions on Russia for its actions in Ukraine but has so far withheld further actions.

Texas exported $674 million worth of goods to Russia in 2020 but imported $3.4 billion in goods from the Eastern European country.

The conflict’s ripple effect has benefited Texas, as the state’s oil and gas industry is shipping more liquefied natural gas to Europe to fill in the gaps caused by the continent’s reliance on Russian natural gas for power.

A month ago, movement began within the comptroller’s office toward divestment from companies deemed to have boycotted the oil and gas industry — the office is currently compiling a list of those offending companies which is likely to include BlackRock after Lt. Governor Dan Patrick spotlighted the financial titan.

“This unprovoked war will, unfortunately, cause hardship for the Russian people,” Hegar said. “The blame for that also rests with Vladimir Putin.”

Last week, Governor Greg Abbott requested that Texas businesses voluntarily remove all Russian products from their shelves.

Similar actions to Hegar’s have been initiated by North Carolina, Virginia, New York, Pennsylvania, and other states.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.

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