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Chairmen try to tighten screws on Iran |
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By Ian Swanson
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Posted: 03/13/07 07:42 PM [ET] |
Two powerful House committee chairman are preparing legislation to press pension plans and mutual funds to divest from foreign entities invested in Iran’s energy sector.
House Foreign Affairs Committee ranking member Ileana Ros-Lehtinen (R-Fla.) introduced the divestment bill last week, and cosponsor and committee Chairman Tom Lantos (D-Calif.) said he expected it to be included in a broader financial services bill that House Financial Services Committee Chairman Barney Frank (D-Mass.) is preparing.
“I expect that legislation to be a Barney Frank bill with Ileana’s and my support,” Lantos said in an interview. Business sources said they understood Frank and Lantos had talked about the bill.
Frank’s support would add political momentum for the legislation, which was referred to Financial Services and two other committees, Oversight and Government Reform and Education and Labor.
Iran divestment appears poised to take off as a political issue, as former Israeli Prime Minister Benjamin Netanyahu has campaigned in the U.S. for the idea and GOP presidential candidate Mitt Romney has written to New York’s comptroller to have its state pension funds divest from companies invested in Iran.
The American Israeli Public Affairs Committee (AIPAC) is lobbying for divestment amid a climate of growing concern that pressure should be intensified because of Iran’s threat to Israel. House Speaker Nancy Pelosi (D-Calif.) did not mention divestment in an address to AIPAC’s annual meeting yesterday, but did say Iran must not be allowed to obtain a nuclear weapon and endorsed a second bill increasing Iran sanctions.
H.R. 1357, the Ros-Lehtinen bill, would require the Office of Global Security Risks in the Securities and Exchange Commission to publish a list of U.S. and foreign entities that have more than $20 million invested in Iran’s energy sector since Aug. 5, 1996. Thirty days after publication, managers of U.S. government pension plans would be required to divest from any entities on the list.
The bill also includes non-mandatory sense-of-Congress language calling on managers of private pension plans and mutual funds to divest from any entities listed. It would prohibit such funds from future investments in those on the list, a GOP committee aide said.
The intention of this language is to create public pressure on private pensions and mutual funds to divest, Ros-Lehtinen said, adding, “So it’s not a mandate but yet it is, because once you inform, a lot of people say, ‘I don’t want my money going there.’”
A Republican committee aide said state pension funds would be treated the same way as private pension funds.
Business groups oppose the legislation and say it would make U.S. diplomatic efforts against Iran more difficult. One business lobbyist noted that the $20 million investment threshold would likely target companies in France, Germany, Great Britain, Japan, Russia and possibly China, which are precisely the countries the administration needs to convince to put pressure on Iran.
“It doesn’t make sense to me that if we’re trying to make people come around to our point of view, to take out a two-by-four and beat them over the head,” said Todd Malan of the Organization for International Investment (OFII).
Business groups also oppose the Iran Counter-Proliferation Act of 2007 introduced by Lantos last week. It would prevent the president from using waiver authority in existing Iran-sanctions law to avoid sanctioning foreign companies invested in Iran. If approved, business sources predicted it would hamper U.S. efforts to win partners for its Iran policy, and could also lead to World Trade Organization challenges.
In an interview, Lantos said eliminating this waiver is important because existing law has proved “utterly meaningless” since no sanctions have yet been imposed on foreign companies doing business in Iran. In a March 12 speech to AIPAC members that received a standing ovation, Lantos called the bill the single most important piece of legislation members of Congress will consider this year.
“Everybody has his own priority,” Lantos told The Hill after his speech. “It seems to me that the possibility of nuclear war in the Middle East probably trumps a few issues.”
Among other provisions, the act would also end all Iranian exports to the U.S. and prevent the U.S. from implementing a nuclear cooperation agreement with Russia or any other country until that county ceases all nuclear cooperation with Iran.
Similar legislation was approved by the House last year but was watered down in the Senate by Foreign Relations Committee Chairman Richard Lugar (R-Ind.). Business and congressional sources said the same thing could happen this year with Foreign Relations Committee Chairman Joseph Biden (D-Del.).
Companion legislation is expected to be introduced soon in the Senate, and Norm Coleman (R-Minn.), facing a tough reelection campaign next year, told AIPAC members he would support it. “The single biggest threat to Israel is Iran,” Coleman said.
In a March 6 letter to Pelosi, several associations representing U.S. companies and subsidiaries of foreign countries said parts of the bill could do unintended damage to U.S. policy. Imposing sanctions on companies in Europe and Asia would undercut, not support, diplomatic efforts to increase worldwide pressure on Iran, it said.
Signatories include OFII, the Emergency Committee for American Trade and the National Foreign Trade Council.
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