Published in the New York Post on September 27, 2007.
Columbia University this week managed to hand a PR victory to Iran’s President Mahmoud Ahmadinejad. It’s time for another New York institution – the state Office of the Comptroller – to join the drive to undermine this evil and dangerous regime.
California Gov. Arnold Schwarzenegger is set to sign a new law aimed at banning Golden State public pension funds – which includes the two largest ones in America – from investing in companies that are involved in developing Iranian petroleum or natural-gas resources. Florida’s public-employee-retirement fund is divesting nearly $1.3 billion invested with 21 companies doing business in Iran or Sudan. (California already hit Sudan’s pocketbook last year.) Missouri and Louisiana have similar policies in place.
The blow to Iran’s rulers should be huge. The California system alone has assets totaling $350 billion – much of it invested in companies that do business with Iran such as Sieman’s, Total, Respol and Shell.
Here in New York, state Comptroller Thomas DiNapoli has total power over the state pension funds. He could add materially to the pressure on Iran simply by the stroke of a pen. City Comptroller William Thompson Jr. could help, by pushing to move Gotham pension funds away from Iranian-investing companies.
City Council Majority Leader Joel Rivera (D-Bronx) is sponsoring a resolution calling on the state and the city to disinvest in companies that do business with Iran. He says that more than $100 billion of the holdings by New York public pension funds are invested directly or indirectly in Iran.
Thompson has sent letters to eight companies that have business ties to Iran, asking them to mitigate “the significant risks that could negatively impact the company’s stock price and reputation” by their investments in Iran.
In one of the letters, Thompson warned the Spanish oil giant Respol that its investments in Iran pose “significant risks to the company, and by extension, to our investments and that of other share-owners of the company.” DiNapoli also signed the letter, as did officials of the Illinois, North Carolina and California pension systems.
DiNapoli should take the further step of disinvesting in Iran, as California and Florida have done.
Eighty-five percent of Iranian government revenues come from the energy industry – a total of $55 billion in 2006. Already, falling oil production (down by a third since the 1979 revolution) and rising domestic demand will cut government energy revenues by an estimated 20 percent over the coming year.
Less government revenues mean reductions in subsidies to the restive Iranian population. Gasoline, for example, may no longer sell for 35 cents a gallon in Tehran if the government runs into financial difficulty.
The Iranian regime is increasingly unpopular, with stories circulating of clerics afraid to go out in public in their religious attire for fear of being attacked. Financial pressure on the government can be the key element in forcing a change of course. Disinvestment, after all, helped forced South Africa to abandon apartheid.
With its large Jewish population, one would expect New York to take the lead in cutting off funding to a government that denies that the Holocaust ever happened. The state that took the biggest blow on 9/11 should also join campaign against a terror-sponsoring government that’s developing nuclear weapons.
A spokesman for DiNapoli says that his office is “studying” the issue of disinvestment in Iran – and notes that they’ve already moved on Sudan, and co-signed the “warning” letters like the one quoted above to Respol.
DiNapoli’s office also said that the comptroller “has a fiduciary duty to retirees to get the best possible return on pension investments” and fears lawsuits by retirees or unions should he disinvest – and that “we want to do what’s right, not what is political.”
What could be more right than slowing Iran down in its drive to acquire nuclear weapons?