24/7 Wall St.

Senior officials of the US Treasury have been spanning the globe to meet with heads of sovereign funds, starting with Singapore and Abu Dhabi. They want the funds to sign a Boy Scout oath which says that they will not use their investments in big US companies, particularly banks and brokerage companies, to push political agendas.

According to The Wall Street Journal sovereign fund investments "have raised concerns in Washington and in European capitals that the funds may be gaining political clout."

Trying to get the funds to sign up for more disclosure is pointless. If US companies want to limit the voting power of these funds, it should go in the provisions of the investments. Non-voting shares will do in most cases. If a company is in such bad shape that outside investors want a say in management, how are sovereign funds different from Carl Icahn or Nelson Peltz. Most companies would rather have the overseas money. The Icahn policy is clear at the beginning. Dump management and the board. Singapore may be more patient.

The Treasury’s fantastic program neglects trying to address one critical factor. When firms like Citigroup (NYSE: C) and Merrill Lynch (NYSE: MER) got into trouble, US private equity firms and pension funds did not step in with capital. Either they felt the investments were too risky or would not pay off for several years. Sovereign funds wrote the checks that others would not write.

Treasury officials should save the jet fuel and stay in the US. Their agenda with sovereign funds lacks teeth.

Douglas A. McIntyre