The West Virginia Investment Management Board voted Thursday to adopt a policy to divest from Chinese-owned companies, earning praise from Gov. Patrick Morrisey and State Treasurer Larry Pack. (Photo Provided)

CHARLESTON — The board that manages West Virginia’s long-term investments is joining the state Board of Treasury Investments in divesting itself from Chinese-linked companies.

The West Virginia Investment Management Board (IMB) voted Thursday to adopt a policy to divest from Chinese-owned companies, following a similar policy adopted by the Board of Treasury Investments (BTI).

“The Chinese Communist Party poses a threat to our national security, dodges transparency and legal oversight, and represents a financial risk that we cannot take,” said Gov. Patrick Morrisey in a statement.

Morrisey serves as chair and an ex officio member of the IMB.

“With the passage of this resolution, the West Virginia Investment Management Board will not invest in CCP owned or controlled companies and seek to prudently divest of those investments,” Morrisey continued.

Chinese divestment was first proposed in February by State Treasurer Larry Pack, who also serves as a non-voting member of the IMB and chairs the BTI, which adopted a Prohibited Foreign Investment Policy during its quarterly meeting at the end of February.

“The board made the right choice today by adopting this new policy that will ensure that we do not put American dollars at risk and that state tax dollars are not used to bankroll a nation that is completely against our way of life,” Pack said in a statement. “We must do everything in our power to hold bad foreign actors accountable. This is another tool at our disposal to do just that.”

The policies call for reviews of all state short-term and long-term investments, identify any investments in Chinese owned or controlled companies, and divest state tax dollars from those companies.

“This is an issue we’ve been talking about at the Investment Management Board for over a year, so this is a really good day,” Pack said in a video statement Thursday afternoon.

Pack served previously as interim cabinet secretary of the Department of Revenue under former governor Jim Justice.

“We’re going to do everything we can to protect the investments of West Virginians and make sure we don’t invest in companies owned by the Communist Chinese Party,” he said.

The IMB was created by the Legislature in 1997 to provide fiscal administration, investment and administration for the pension funds, workers’ compensation and coal workers’ pneumoconiosis funds, and other state funds. The BTI was created by the Legislature in 2005 to manage the state’s short-term investments.

According to the most recent financial statements, the BTI had more than $10 billion in net assets minus liabilities between the three pools it manages. The IMB manages more than $23 billion in investments from 11 defined benefit retirement plans, as well as insurance and risk pool funds, endowment funds, municipal pensions, and trust funds.

Several states have either adopted similar measures or are considering similar divestment policies. Texas is the most recent where Gov. Greg Abbott issued an order in November to state agencies to begin divesting funds from Chinese companies.

Also in November, state financial officers from 15 states wrote a letter to the manager of public pensions to begin divestment, citing unreliability of financial audits and statements from Chinese-linked companies, alleged stock manipulation by the Chinese government and the placement of military and intelligence officials in Chinese companies, among other issues.

Last week, the State Treasurer’s Office joined two state financial officials, in writing a letter to Paul Atkins, chairman of the U.S. Securities and Exchange Commission, asking for the commission to investigate delisting China-based issuers of stocks on U.S. exchanges.