Reuters: U.S. efforts to force Iran to change its behavior have expanded beyond the White House to Main Street and threaten the broadest financial disinvestment campaign since South African apartheid ended. By Carol Giacomo, Diplomatic Correspondent
WASHINGTON (Reuters) – U.S. efforts to force Iran to change its behavior have expanded beyond the White House to Main Street and threaten the broadest financial disinvestment campaign since South African apartheid ended.
Momentum is growing for a movement that encourages Americans to withdraw investments in companies doing business with the Islamic republic, as well as other states perceived by Washington as security problems — Sudan, North Korea and Syria.
In the 1980s, an international disinvestment campaign helped undermine racial apartheid in South Africa and open the way for black-majority governance after decades of white-minority rule.
Activists believe a similar strategy today could defuse threats from what the United States brands terrorism-sponsoring states. Because of the genocidal war in Darfur, Sudan has been a focus of grass-roots activism for some time but increasing attention centers on Iran and, to a lesser extent, North Korea and Syria.
“Divestment should be part of our strategy to isolate these regimes until they give up their drive for nuclear weapons and/or their support for terror,” said California Democrat Brad Sherman, chairman of the U.S. House of Representatives subcommittee on non-proliferation and terrorism.
Roger Robinson, president of Conflict Securities advisory Group, a Washington, D.C.-based global security risk consultancy, has identified 450 publicly traded U.S. and international companies with business ties to one or more of the four targeted countries.
A report by the Library of Congress’ Congressional Research Service found more than $100 billion in energy investments in Iran since 1999 by such foreign firms as Totalfina ELF of France, Royal Dutch Shell, Italy’s ENI and Inpex of Japan.
The Bush administration, which accuses Iran of building nuclear weapons and funding militant groups like Hizbollah, is gradually raising pressure on Tehran to change course.
It played a lead role in imposing U.N. economic sanctions and implemented an innovative U.S. campaign to blacklist two Iranian banks, thus impairing the leading oil-producing country’s access to the international financial markets.
While the administration says such efforts have had a significant impact, Tehran has continued its nuclear program, claiming it is for energy production not weapons. Many U.S. lawmakers and activists say more pressure is required to force the change that would obviate possible military action.
“It seems strange that we send young men and women to defend us, some of whom pay the ultimate sacrifice, however we have not yet used one of our most powerful weapons — America’s financial markets,” said Sarah Steelman, state treasurer in Missouri.
“We in America are funding the very enemies we’re fighting through our investments — billions and billions of dollars’ worth,” she told Sherman’s subcommittee hearing last week.
Steelman established the nation’s first public investment fund to screen out stocks with ties to terrorism-linked firms. It is managed by State Street Global Advisors, the world’s largest institutional investment company.
Several years ago New York City’s public pension systems began nudging U.S. firms with foreign subsidiaries, like Halliburton, to exit Iran.
Since then, at least eight states — including Texas, California and Florida — have introduced disinvestment legislation. Nationwide Financial and the Roosevelt Investment Group established terror-free mutual funds.
But opponents are fighting back.
William Reinsch, head of the National Foreign Trade Council which represents 300 American firms and successfully challenged an Illinois disinvestment law in court, said such initiatives are unconstitutional because they interfere with the ability of U.S. presidents to conduct foreign policy.
Moreover, he told Reuters, disinvestment penalizes the very European and Japanese allies Washington needs for support at the United Nations and risks decreased returns for investors — a claim Steelman vehemently rejected.
To promote the disinvestment movement, Sherman and other lawmakers plan to introduce new legislation, including a bill that absolves people of tax liability if they sell securities tainted by connections to Iran and other target states.