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POLITICS-US:
Neo-Cons Driving Iran Divestment Campaign
Jim Lobe
WASHINGTON, May 10 (IPS) - Neo-conservative hawks who championed the
invasion of Iraq are leading a new campaign to persuade state and
local governments, as well as other institutional investors, to
"divest" their holdings in foreign companies and U.S. overseas
subsidiaries doing business in Iran.
While stressing that U.S. military action against Iran's nuclear
programme should not be taken off the table, they call their
divestment strategy the "non-violent tool for countering the Iranian
threat".
And, like the run-up to the Iraq war, the campaign has attracted
bipartisan support. Democrats, including those who strongly oppose the
George W. Bush administration's Iraq policy, see divestment, as well
as other proposed economic sanctions against Tehran, as a way to look
"tough on Iran" short of going to war.
"I'm not yet ready to suggest the use of military force... but one has
to stay on alert that that time could come sooner rather than later,"
James Woolsey, who served briefly as former President Bill Clinton's
CIA director, told an Ohio legislative committee this week in support
of a bill that would ban investments by the state's pension funds in
companies operating in Iran or in any other country the State
Department lists as a state sponsor of terrorism.
"Terror-free investing will not solve the problems... but I think it's
an important part of the comprehensive package," added Woolsey, a
prominent neo-conservative associated with the like-minded Foundation
for the Defence of Democracies (FDD).
The new campaign, the brainchild of the far-right Centre for Security
Policy (CSP), is designed to put pressure on the Islamic Republic to
abandon its nuclear programme, end its support of anti-Israel groups
like Palestinian Hamas and Lebanon's Hezbollah, and "perhaps even to
push (it) toward collapse," according to FDD president Clifford May,
by depriving it of foreign investment and commercial ties with other
countries.
According to a report released here Wednesday by the neo-conservative
American Enterprise Institute, which is collaborating with the CSP,
Iran has signed more than 150 billion dollars worth of investment and
commercial contracts with foreign companies based in more than 30
countries since 2000, including more than four billion dollars with
U.S. overseas subsidiaries.
The initiative, which is modeled after the anti-apartheid divestment
campaign against South Africa of the 1980s, is also backed by major
pro-Israel and Jewish groups, including the American Israel Public
Affairs Committee, the American Jewish Committee, the Anti-Defamation
League, and local Jewish Community Relations Councils whose membership
is worried that Israel will be threatened by a nuclear-armed Iran.
Potentially at stake are billions of dollars controlled by state
pension funds and other institutional investors that have invested
money in companies -- based mostly in Europe and Asia -- operating in
Iran. According to CSP, New York pension funds alone own nearly one
billion dollars of stock in three Fortune 500 companies tied to Iran.
"Iran's ability to fund its nuclear programme and sponsor terrorism
would come to a grinding halt without revenue gained from foreign
investors," according to CSP, which, along with the American
Enterprise Institute and FDD, was a leading advocate for the 2003
invasion of Iraq.
Last year, Missouri became the first state to order one of its pension
funds to divest its shares of all companies that do business with Iran
and other countries on the State Department's terror list. Last month,
both houses of the Florida legislature unanimously approved a bill
banning the investment of state funds in companies with commercial
ties to Sudan and Iran's energy sector.
Iran-related divestment bills are expected to be approved over the
next month by legislatures in Ohio, Louisiana, Pennsylvania, and
California, according to Christopher Holton, the head of CSP's
"Terror-Free Investing" programme. Similar bills are also being
considered in the legislatures of Texas, Georgia, Maryland, and New
Jersey and will soon be introduced in Michigan and Illinois, he told
IPS.
The sudden proliferation of state divestment measures comes amid
renewed efforts in Congress to tighten and expand the scope of
existing legislation against Iran.
Under the 1996 Iran Sanctions Act (ISA), which, among other
provisions, bans U.S. companies from doing business in Iran, the
president is required to impose a range of economic sanctions against
foreign companies that invested more than 20 million dollars a year in
Iran's energy sector, which accounts for about 80 percent of its
foreign-exchange earnings.
The same law, however, permits the president to waive such penalties
if he deems it in the national interest. Worried that imposing
sanctions would anger key U.S. allies, President Bush has consistently
exercised his waiver authority, as his predecessor, Bill Clinton, did
before him.
But, as tensions with Iran have increased since the election of
President Mahmoud Ahmadinejad nearly two years ago, pressure,
especially from neo-conservative groups and the hawkish leadership of
the so-called "Israel Lobby", which includes the Christian Right, to
take stronger action has grown.
Congress is currently considering several bills that, if passed, would
reduce or eliminate the president's waiver authority and include
language encouraging divestment drives at the state level.
The administration, which is at least rhetorically committed to
working through the U.N. Security Council to impose multilateral
sanctions against Iran to rein in its nuclear programme, appears
ambivalent on both expanding ISA and on the divestment campaign.
On the one hand, State and Treasury Department officials, using the
threat of tougher Congressional action, have informally -- and with
some success -- pressed foreign banks, companies, and governments, to
forgo or freeze new investments in Iran's energy sector over the past
year.
On the other hand, the administration has opposed the pending
legislation both because it would reduce the president's flexibility
in conducting foreign policy and because imposing sanctions will
almost certainly produce a backlash in foreign capitals that would
undermine Washington's ability to sustain a united front with its
allies and other powers against Iran at the U.N. and in other forums.
"We could not support modifications to (ISA) now being circulated in
Congress that would turn the full weight of sanctions not against Iran
but against our allies that are instrumental in our coalition against
Iran," Undersecretary of State Nicholas Burns told a Senate Committee
in late March.
In this position, the administration has been strongly supported by
the National Foreign Trade Council (NFTC), a business lobby created by
many of the nation's biggest corporations, which has long opposed both
unilateral U.S. trade sanctions and state divestment initiatives.
"On one hand, we're asking Europe, Russia, China and Japan to work
together with us on this, and, on the other hand, we're beating their
companies over the head with a stick," NFTC President William Reinsch
told IPS.
In a letter to Ohio lawmakers considering divestment legislation,
Reinsch made much the same argument, noting also that, in a case
brought by the NFTC, a federal court judge recently struck down as
unconstitutional a Sudan divestment law in Illinois on the grounds
that it interfered with the federal government's ability to conduct
foreign policy and regulate foreign trade.
In his weekly column in the Washington Times published shortly after
Reinsch sent his letter, CSP's president, Frank Gaffney, denounced
Reinsch as "Terror's lobbyist", charging that the NFTC "favours doing
business with America's enemies and runs interference for those
determined to do so".
"Iran is already in difficult economic straits; if fully brought to
bear, the power of America's capital markets could mightily affect
corporate behaviour, undermining -- hopefully, helping to bring down
-- the mullahocracy in Iran," wrote Gaffney. (END/2007)
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Yoshie