hat tip-Christopher H.
Bill targets companies working with terrorist nations
By Brad Bumsted
STATE CAPITOL REPORTER
Monday, June 23, 2008
HARRISBURG — The state House is expected to vote this week on a measure that would require the state’s pension funds to divest from companies doing business in Iran and Sudan, both of which are on the U.S. State Department’s list of terrorist regimes.
Deputy Speaker Josh Shapiro, D-Montgomery County, began the effort proposing divestment in all countries on the State Department’s list, which includes North Korea and Syria. But Shapiro, the sponsor, said he was able to garner the most support by targeting Sudan and Iran.
“Among terrorist nations, Iran is the 800-pound gorilla,” said Christopher Holton, an analyst for the Center for Security Policy in Washington.
Shapiro said he will offer an amendment to his bill, narrowing the legislation to the two countries.
“We need to use the economic power of the commonwealth to isolate our enemies and support our allies,” Shapiro said.
Holton said he supports the Pennsylvania bill.
“It’s not perfect,” he said. “There is need to address Syria and North Korea. But this bill is better than a lot of bills introduced around the country.”
Genocide in the Darfur region of Sudan and Iran’s funding of terrorist groups and its nuclear program fuel the concern.
Eight states have approved terror-free investment bills that vary in scope, according to a tally by the center. In Missouri, the state treasurer put a broad divestment policy in place for state funds. Legislation is pending in many states.
States invest billions of dollars in companies that do business in the countries supporting terrorism.
Historically, some state pension funds, including Pennsylvania’s, have resisted divestiture efforts, saying they have a “fiduciary responsibility” to earn as high a rate of return as possible for retirees.
Pennsylvania has two large funds: the State Employees Retirement System and the Pennsylvania Public School Employees Retirement System. A SERS spokeswoman said the agency is analyzing the legislation and has taken no position. A spokesman for the school retirement system could not be reached for comment.
Shapiro said he doesn’t expect those organizations to agree with him philosophically but he has worked with fund officials over the past year and incorporated many of their suggestions.
In January, state Treasurer Robin Wiessmann announced that she was divesting holdings in an oil company that did work in Sudan. She did not need legislative approval for changing investment of Treasury Department funds.
“I appreciate the efforts Rep. Shapiro’s proposal puts forth,” Wiessmann said Friday.
She said she demonstrated with divestment in China Petroleum and Chemical Corp. that “properly structured divestment” doesn’t have to adversely impact state holdings.
“I believe that any sound divestment action must identify acceptable investment alternatives that will result in comparable financial returns,” Wiessmann said.
If Shapiro’s bill passes the House, the outcome is uncertain in the Senate. Erik Arneson, communications and policy director for Senate Majority Leader Dominic Pileggi, R-Delaware County, said he is not aware of any similar bill introduced in the Senate and hasn’t heard much talk about it.