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POLITICS-US: Terror-Free Investments Gain Momentum
By Khody Akhavi
WASHINGTON, Apr 4, 2007 (IPS) - As the United Nations toughens sanctions on Iran
for its failure to suspend its nuclear activities, a growing number of
U.S. state lawmakers - and a few Congresspersons - are responding to a
grassroots campaign to divest in companies that do business with countries
that the State Department considers state sponsors of terrorism.
In the last year, state lawmakers in California, Missouri, Florida and New
Jersey have introduced bills that specifically seek to ban investment in
Iran's oil and natural gas infrastructure. The "terror-free" investment
movement - spearheaded by the neoconservative think tank Centre for
Security Policy (CSP) - aims to force mutual funds, pension funds, and
endowments to pull their investments from international companies that do
business with Iran.
U.S. companies are already barred from dealing directly with the Iranian
government, but a report from CSP, entitled "Terrorism Investments of the
50 States," claims that, on average, the U.S.'s top 100 pension systems
invest between 15 and 23 percent of their portfolio in "companies that do
business with terrorist-sponsoring states." Of these 100, 73 companies are
doing business with Iran, according to the same report.
"Terror-free investing is an idea whose time has come," wrote Frank
Gaffney Jr., president of CSP, in an op-ed in the Washington Times.
The precedent for divestment was set in the early 1980s, when human rights
advocates launched a campaign to tighten the purse-strings on U.S.
investments in South Africa to protest the country's legally mandated
racial segregation, or apartheid.
More recently, divestment measures have been adopted by several states
against the government of Sudan in response to the government's policy of
large-scale massacres and displacement of local populations in the Darfur
region, where outside observers say 200,000 people have been killed in the
last four years.
The irony is that the current "terror-free" investment movement is being
championed by some of the same Ronald Reagan-era officials who opposed
divestment from South Africa 25 years ago. At the time, the Reagan
administration pursued the controversial policy of "constructive
engagement" - changing the country's apartheid system through dialogue
with the white minority leadership.
Gaffney, the founder of the ultra-hawkish CSP, temporarily acted as
assistant secretary of defence under Reagan before his appointment was
blocked by the U.S. Senate. CSP's advisory council also includes current
and former high-level aides in the George W. Bush administration, such as
Eliot Abrams and Douglas Feith.
The "Divest Iran" campaign is gaining momentum in part as an alternative
for lawmakers weary of a direct military confrontation with Iran. In
Congress, Democratic Representative Tom Lantos, who chairs the House
Committee on Foreign Affairs, proposed a bill to limit pension fund
investment in companies that invest in Iran's energy industry.
"We are far from having exhausted all diplomatic and economic options for
stopping Tehran's headlong pursuit of nuclear weapons," said Lantos at a
committee hearing last month. "Talk of military intervention is unwise and
unsupported by Congress and the American people."
Florida's Ilena Ros-Lehtinen, the top Republican on the House Foreign
Affairs committee, has also introduced legislation that would require
federal pension plans to sell holdings in foreign companies that have put
more than 20 million dollars into Iranian energy development, and would
prohibit private and public pension funds from future investment with
those companies, according to a report from the Congressional Quarterly.
In March, New Jersey lawmakers introduced a bill that would ban state
pension funds from investing in international companies doing business
with Iran. A recent bill introduced by California State Assemblyman Joel
Anderson, a Republican from San Diego, would force two of the nation's
largest pension funds, which includes the state's Public Employees
Retirement System, or CalPERS, to do the same.
In June of last year, Missouri also ordered state employee pension funds
to sell shares of companies with economic interests in Iran, North Korea,
Syria and Sudan, all countries accused of sponsoring terrorism.
However, Gaffney believes that divestment targeted at Iran's energy
industry falls short of the real goal of strangling Iran's economy.
"[It] would leave unaffected the roughly 325 mostly foreign-owned and
operated companies also helping Iran's regime build its infrastructure,
develop dual-use (that is, military and civilian) industrial capabilities,
heavy manufacturing," he wrote in the Washington Times.
Opponents of the divestment effort argue that, while morally commendable,
the campaign could undermine international diplomatic efforts to isolate
Iran.
"The companies that would be divested would be European and Asian
companies," said William A Reinsch, president of the National Foreign
Trade Council, as quoted in the New York Times. "It sticks a stick in the
eye of the very countries we are trying to get to cooperate with us."
For example, Missouri's bill prohibits pension funds from owning shares of
foreign companies that are rebuilding Iran's oil infrastructure, including
Anglo-Dutch giant Shell, France's Total, Italy's ENI, Russia's Gazprom,
Germany's Siemens and China's Sinopec and China National Petroleum -
countries the U.S. needs in order to apply continued pressure on Tehran.
In February, a federal judge struck down an Illinois law that called for
Sudanese divestment, saying it interfered with the federal government's
ability to conduct foreign policy, according to the same report.
The Bush administration has quietly been warning energy companies, as well
as the governments of China, India, Pakistan, and Malaysia, that penalties
are possible if they pursue energy deals with Iran, but has stopped short
of taking action that would divide the U.S. from its allies, according to
a March New York Times report.
The divestment effort has also gained attention because of the involvement
of pro-Israel interest groups. The "Divest Iran" campaign was one the main
messages delivered at the American Israel Public Affairs Committee (AIPAC)
convention in Washington last month.
"Divestment against Iran is right because Iran is openly in contravention
of international law, preaching the destruction of an entire people,"
Likud Party Chairman Benjamin Netanyahu told an audience at the AIPAC
convention.
"It is now being in the Sudan and there's no reason why we shouldn't join
forces with those who want to stop the killings in Darfur and talking
about divestment from Sudan. I say fine; divest Sudan, divest Iran. Invest
in peace."
(END)
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