Franklin Templeton Could Feel Darfur's Heat

Take Fidelity in Boston. Yes, its managers dumped 91% of their stake in PetroChina during the first quarter. But Anne Crowley, the company's secretive communications boss, made a rare appearance in print last week to deny the sales were a company-wide decision.

Meanwhile, Fidelity's Bermuda-based sister company, Fidelity International, has kept at least half a billion dollars invested in PetroChina in its offshore Fidelity China Focus fund.

Mutual fund managers are making a big mistake if they think this issue is going to go away soon. The Darfur divestment issue has just gone mainstream.

It wasn't just Danoff's move at Fidelity. Nor, even, the heat that Warren Buffett took over the issue at the annual Berkshire Hathaway BRK shareholders' meeting. Buffett, the largest outside shareholder in PetroChina, is standing firm for now but it has drawn him some uncomfortable attention.

Last week, two presidential candidates -- Democrat John Edwards and Republican Rudy Giuliani -- got some unwelcome scrutiny when their financial records showed they had money in mutual funds that invest in suspect companies.

Edwards says he will dump the relevant funds. Rudy is reviewing the portfolio. It's worth noting that Sens. Barack Obama and Sam Brownback (one Democrat, one Republican) both said they had already dumped mutual funds with suspect investments.

All this comes just a few weeks after British engineering giant Rolls-Royce, which was one of the companies under fire for its involvement with the Sudanese regime, bowed to pressure and said it would pull out of the country.