The Devil Came on Horseback. Working towards peace in Darfur, Sudan.

In December, Victoria Smith traveled to a Sudanese refugee camp in Chad. A sheik there told her that his village had been attacked by militias several times since 1999. In the fall of 2003, the sheik said, militia members approached on camelback while villagers were harvesting peanuts. The camels began to eat the crops. When the sheik protested, the militiamen replied, “You are our slaves. You do what we tell you to do.”

The sheik responded that the men were “slaves of God.”

Early the next morning, the militia returned with guns. Helicopters started circling overhead. The village evacuated, and the sheik had been in the refugee camp ever since.

Smith, educational outreach coordinator for Global Grassroots, a Lyme-based nonprofit, remembers the sheik when she advocates for a bill before the New Hampshire Legislature that would require the state to divest its retirement assets from companies doing business with Sudan.

“We know the Sudanese government is funding militia groups, helicopters, weapons to conduct attacks on Darfur,” Smith said. “I see this bill as a move to cut off the funding the Sudanese government needs to continue these attacks. It contributes to the possibility for security to return to Darfur so the refugees I met can eventually return to their home.”

Smith is one of numerous state activists, including many young people, who have united around a bill that would require the boards of trustees of the state retirement system and the judicial retirement plan to divest assets from companies supporting Sudan’s government or military.

The retirement system opposes the bill. Chief Investment Officer Jeff Gendron told a house subcommittee Thursday that the assets must legally be held in trust for the “exclusive benefit” of members and beneficiaries. Complying with a divestment statute could jeopardize the system’s tax status, he said.

“It’s something we feel we cannot do,” he said.

According to a prepared statement from the retirement system, trustees are concerned that complying with divestment would breach their legal duty to invest solely in the interest of the fund’s beneficiaries.

“Divestment legislation is a social-investment mandate which does not serve the exclusive interests of the members of the pension fund,” it said. The statement also states that public funds “should not be used as a foreign policy tool.” It says divestment does not have any financial effect on the targeted companies, because other investors will buy those assets.

The bill uses a method called targeted divestment, a way of divesting from companies that have a business relationship with the Sudanese government or with a government-created project, those that are complicit in the genocide, or those that supply military equipment within Sudan. Companies that provide humanitarian services, in fields like medicine, agriculture, religion, journalism or non-oil-related consumer goods, are excluded.

President Bush in December signed a law authorizing divestment by state and local governments. In 2004, Bush characterized the actions by the Sudanese government and the Arab Janjaweed militias against the African villagers as genocide.

Seven other states use different forms of divestment, and every other New England state has divested from Sudan in some way.

The New Hampshire bill would require the retirement system to identify which targeted companies it has investments in and write to those companies encouraging them to end business operations in Sudan. If the company did not take action, the fund would withdraw its investments.

Gendron said the retirement system has not calculated the financial effect of divestment. Gendron said determining that would require hiring a consultant to do an in-depth analysis. The system has said that administrative costs - hiring a consultant, coordinating the efforts and reporting compliance - could exceed $100,000 in 2009.

But supporters say the financial effect would be minimal. Instead of hiring a consultant, the fund could use a list of about two dozen “worst offenders,” available for free from the divestment task force, or could buy a list from a third-party research firm. The companies that the task force lists are all foreign, with several in China, Malaysia and India, and nearly all are in the oil, mineral extraction, power, or defense industries.

Daniel Millenson, national advocacy director for the task force, said in each state already using targeted divestment, less than 0.3 percent of the fund’s holdings were affected. None reported an adverse financial effect. In New Hampshire, that would mean around $20 million.

So far, according to the task force, nine companies have changed their behavior as a result of the divestment campaign.

Gendron called the 0.3 percent figure a “generic number.” He did not know the actual amount of state retirement system holdings that would be affected. He said he had not reviewed the analysis of peer company performance.

“It’s difficult to get a handle on what the companies are and we haven’t been able to ascertain the impact on our portfolio,” he said.

The bill has attracted statewide support. Rep. Pamela Manney, a Goffstown Republican, said at the subcommittee hearing Thursday that she received a “great amount of e-mail from people in the system who don’t want their money used to support the genocidal regime in Sudan.”

At a previous hearing, Helen Crowe, a stay-at-home mom and activist from Exeter, gathered 250 signatures on a petition supporting the bill. Tom White, coordinator of educational outreach at the Cohen Center for Holocaust Studies at Keene State College, brought a petition signed by about 700 state teachers and students.

Much of the support for divestment comes from young people. Jackie Lewis, a University of New Hampshire sophomore, has gathered 1,000 signatures on a petition to encourage the UNH Foundation to divest its assets from Sudan, and testified in support of the house bill.

“It’s a really cool feeling to do something in the state of New Hampshire and realize you’re reaching out to people across other continents,” she said.

Of the bill’s six sponsors, four are younger than 25. The primary sponsor is Jeffrey Fontas, a 21-year-old Nashua Democrat who said he tries to support issues that concern young people.

“Young people growing up with history lessons, we learn about the Holocaust that this is something we would never want to see ever again,” Fontas said.