The Boston Globe
By Antonio F.D. Cabral and Joan M. Menard
US law has long kept American oil companies from operating in Iran. But foreign companies – including Chinese and Russian oil giants – happily do business with the Iranian government. Iran relies on these companies for most of its export revenues, revenues that help finance terrorist acts and organizations around the world. Moreover, Iran is using its oil revenues to develop nuclear material and technology in direct violation of three unanimous United Nations Security Council resolutions.
The Pension Reserves Investment Management Board's investments are costing citizens plenty. First, we're paying the price as consumers, because the international instability that Iran causes raises the price of oil worldwide.
Second, we're paying the price as taxpayers, because these investments help support Iranian activities that put Americans, including US troops, at risk throughout the world. Countering these activities costs us billions each year.
Finally, we're paying a moral price for supporting the government. The United States has consistently named Iran as the number one state sponsor of terrorism, funding terrorist organizations across the Middle East and fostering instability around the world. Government officials, including Iran's president, have repeatedly questioned whether the Holocaust happened and even hosted a conference of Holocaust deniers in 2006. The government brutally mistreats its own people. Women are suppressed, gays are routinely executed, and ethnic and religious minorities are persecuted. Attempts to form labor unions are quashed. Basic rights of speech and religion are trampled.
That's why a bipartisan coalition of nearly 60 lawmakers in Massachusetts has signed onto legislation to divest Massachusetts' pension fund from companies with active investments in the Iranian energy industry.
We understand that we can't avoid all investments connected to countries or companies that do bad things. The global nature of the economy and equity markets and the increasingly indirect ways in which investments are heldthrough mutual funds, hedge funds, and exotic derivativesrequire that divestment be carefully targeted.
The legislation targets only the handful of foreign oil companies with significant, active investments in Iran's energy sector, and only prohibits direct ownership of their shares. The PRIM Board has testified that this legislation would affect only about 1 percent of the fund's investments and isn't likely to have any impact on the fund's returns: Energy companies that do not operate in Iran are at least as profitable as those that do.
Our pension money is being invested in foreign oil companies that provide Iran with the means to build a nuclear industry that we may soon have to defend ourselves against.
What kind of an investment is that?
Antonio F.D. Cabral is a Democratic state representative from New Bedford. Joan M. Menard is a Democratic state senator from Fall River.
