Iran, The New South Africa
Missouri took the first steps among the states to divest their portfolios of any foreign corporations doing business with Iran, a move they started last year. Now eight other states have begun to follow suit, and the latest state may make the biggest impact of all. California has just passed legislation that would transfer billions of dollars away from foreign investments:
It is the kind of political movement that fits handily on a bumper sticker: Divest Iran.Over the past year, one state, Missouri, has opted to do just that, while several others, including New Jersey, have also begun to write or to consider legislation to divest.
But the nascent movement took on decidedly more weight last week with the preliminary success of a bill in the California Legislature. The measure would force two of the nation’s largest pension funds — devoted to the state’s public employees and its teachers, with combined holdings of nearly $400 billion — to remove their money from any foreign company doing business in Iran. American companies are already barred from such dealings.
The author, Assemblyman Joel Anderson, a Republican from San Diego County, said the bill was meant to protect the $24 billion he estimates the two funds currently have invested in international companies with ties to Iran. Mr. Anderson said his concern was Iran’s potential economic instability, not its current standoff with the West.
“They’ve got a president that is talking one day about having nuclear bombs and saying he’s not the next day, and taking hostages,” he said on Friday, referring to the Iranian capture of 15 British sailors and marines. “I’m not saying that we should take a foreign policy stance; I’m saying it’s not a good place to invest our money.”
I'm not going to knock this idea, because I think it sends an important message of American unity. After all, we have made it US policy to restrict business with Iran; American corporations cannot trade with the mullahcracy as a result. Having state funds invested in foreign corporations that can take advantage of restrictions on domestic rivals seems significantly less than patriotic, and the states who have corrected that should be commended.
However, why now? We have had restrictions on Iranian trade ever since 1979, when the current government held our diplomatic personnel hostage for 444 days. Iran has consistently backed terrorists that attacked Americans and American assets. Their proxy group, Hezbollah, abducted several Americans in Lebanon, killing at least one for his connection to the CIA. They have supported radical-Islamist terrorists ever since Ruhollah Khomeini seized power in February 1979.
It took 28 years for the states to realize that Iran is a threat to American security? While many of these same states demanded divestment from South Africa for their apartheid policies, they continued to invest in companies that did business with one of America's enemies. Now they want a pat on the back for divesting from those who deal with the mullahs more than five years after 9/11.
Well, OK. Congratulations on finally catching up with reality.
Addendum: You have to love the argument given in the article to oppose divestment:
William A. Reinsch, president of the National Foreign Trade Council, with offices in New York and Washington, which filed suit against the Illinois law, said divestment bills — while morally laudable — could sabotage diplomatic efforts to isolate Iran.“The companies that would be divested would be European and Asian companies,” Mr. Reinsch said. “It sticks a stick in the eye of the very people and the very countries we are trying to get to cooperate with us.”
Uh, yeah. That would be those same European countries that declined to impose sanctions on Iran after the mullahcracy abducted 15 British sailors and Marines, right?
Posted by Ed Morrissey on April 2, 2007 6:52 AM | Comments (16) | TrackBacks (2)
Comments (16)
Posted by stackja1945![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 7:12 AM
Many felt warm and fuzzy about bad white in good black Africa. Same warm and fuzzy about Iran. Now we are to believe not warm and fuzzy. Pigs flying again it seems.
Posted by dave_rywall![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 7:23 AM
Halliburton’s Dubai-based subsidiary is developing Iran's South Pars natural gas fields. Through some extreme bu**shittery, foreign subsidiaries of the mother ship are allowed to operate in enemy states as long as they operate "independently".
Where's the American outrage over that?
I guess it's buried under all the hypocrisy and the shareholders' profits.
Typical.
Posted by rbj![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 8:00 AM
And dave's comment is typical of the left. Mention anything bad about anyone other than Bush or his friends and they reflexively shout "Haliburton!"
And
1) I applaud divestiture
2) This should apply to subsidiaries -- no help to Iran under the mullahocracy.
Posted by ao1David![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 8:13 AM
If you were black, the old South Africa was a very bad deal. If you were white, the old South Africa was a democracy. Whites were 25% of the population. The reason sanctions worked, was because a minority that large could not isolate itself from the effects of the sanctions. Iran and all of the other sadsack dictatorships we are facing a run by tiny minorities. Those tiny minorities can isolate themselves from the effects of the sanctions and don't give a damn about the rest of the population
Posted by dave_rywall![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 8:58 AM
rbj - if typical means stating a fact, then yes I am most certainly being typical.
No doubt many, many American companies have huge business dealings with Iran. The only one I know of at the moment is Halliburton. It's just deliciously convenient (and ironic) that they're in the position to be shat upon.
If the call for divestment has any teeth, we'll soon see who else has their hands dirty in Iran. And people will be outraged, and then lawyers will legally distance alll those American companies from the mothership, and then this call for divesting will go nowhere.
THAT is what's typical here. And THAT is what people should worry about. Not right this or left that.
Posted by patrick neid![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 9:07 AM
"free tibet".........
Posted by DavePA![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 9:24 AM
France, Germany and Russia won't go along with economic sanctions against the Mullah Dictatorship for the same reasons they wouldn't go along with economic sanctions against Saddam.
They are making huge amounts of money trading with Iran, as well as getting a lot of oil from Iran.
Same old, same old: EUro and Russian hypocrisy and putting money before morality and international law.
Posted by pilsener![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 9:38 AM
I don't like either socially-conscious, or politically-targeted investment decision making by public entities, so I can't applaud this one.
The responsibility of the people managing a state's investment assets is to maximize the return for the taxpayers. Inserting other considerations into the process can cause the original goal to be subverted.
Socially-Conscious: Women, Minorities, Green, Unionized, Equalized Pay, Underprivileged, Humanitarian.
Politically Acceptable: China?, Saudi Arabia?, Venezuela?, Cuba?, Pakistan?, Libya?, France? Zimbabwe? Russia? I don't no where to draw the lines between friend and foe.
My choice would be not to invest in high-risk companies, and to set-up criteria outlining high-risk.
Posted by richard mcenroe![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 9:40 AM
Good Lord! This could RUIN the EU arms industry...!
Posted by Cynic![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 11:14 AM
Your title Iran, The New South Africa looks at the situation from one perspective but if one includes 'and' to produce
"Iran and The New South Africa" (post Apartheid South Africa) then it could serve well to disclose the massive co-operation between the two which America would do well to consider in connection with any sanctions it hopes to apply.
And South Africa is a big producer of "yellow cake" amongst other minerals.
Posted by Cynic![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 11:22 AM
"France, Germany and Russia won't go along with economic sanctions against the Mullah Dictatorship for the same reasons they wouldn't go along with economic sanctions against Saddam."
The Eu refused to help one of their own, the UK's Blair, with a stoppage of trade to pressure the return of the 15 sailors.
The only way the US will get anything going will be to boycott those companies doing business as usual with Teheran.
Posted by crosspatch![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 11:50 AM
One of the major developers of Iranian oil infrastructure is Royal Dutch Shell. That's why I don't do business with their US subsidiary, Shell Oil.
Posted by Adjoran![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 12:15 PM
I believe investment decisions for public pension funds should be made by professionals, not by tinhorn politicians who ride the latest news cycle and wouldn't know what EPS meant if you gave them "Earnings" and "Per" and a 30-minute head start to google the rest.
Pension fund investing should be protected from political influence. While I am sympathetic to the goal of this effort, allowing it in this case only opens the door to future mischief whenever an elected official of some state sees potential political points to be scored.
Decisions on economic sanctions are best left to the federal government, unless you want 51 different foreign policies operating simultaneously.
Posted by crosspatch![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 4:07 PM
"I believe investment decisions for public pension funds should be made by professionals"
Which is what a famous communist meant when he said that a capitalist would sell you the very rope you would use to hang him with.
While I agree with you in a general theoretical sense, in a more practical sense there is no reason to improve Iran's infrastructure even if doing so might make us a few bucks in the short term. Those few bucks made in investment might cost us more in bullets and lives later.
To profit on the strengthening of our rivals who have made war with us their policy for nearly 30 years is plain foolish.
Besides, the entire point is to make companies think twice about doing business there. Once they stop those specific business practices, they would again be available as an investment opportunity. If Iran has trouble finding contractors to bid on upgrading their oil infrastructure, that's fine with me.
Posted by Davod![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 5:22 PM
A littled off topic, but does anyone know the legal and PR and lobbying firms representing Iran.
I recall a few years ago both Kerry and Hillary had Iranian money and advisers.
Posted by conservative democrat![[TypeKey Profile Page]](http://www.captainsquartersblog.com/mt/nav-commenters.gif)
| April 2, 2007 5:59 PM
Haliburton subsidiaries DO have deals with Iranian oil and gas interests. I won't lie, I enjoy bashing Haliburton, but that doesn't change the facts in this instance. Isolate Iran, but the sanctions only hurt the masses, not the ruling Mullahs and Clerics. Like the previous poster said, Russia won't go for sanctions, they hate us. Lets not get naive though, we can whip Iran militarily, but it will get ugly especially with 150,000 of our boys next door. But hey if its got to be done, do it.