State Rep. Dan Frankel Lauded a new report, which shows a state law requiring public pension funds to divest from companies doing business with Iran and Sudan is working.
But the Squirrel Hill Democrat said more must be done to pressure Iran to decide against building nuclear weapons. In fact, he is backing a bill to limit companies with ties to Iran form bidding on state contracts.
A report just released by the Pennsylvania Treasury Department shows Act 44 of 2010 is prompting many companies to cut its ties with Iran and Sudan to avoid divestment by the state’s public “Four Funds” — Public School Employees’ Retirement System (PSERS), State Employees’ Retirement System (SERS), Pennsylvania Municipal Retirement System and the Treasury Department.
According to the report, 24 companies with ties to the state’s pension plans were determined to have divested operations in Sudan and/or Iran since July 2011. And as of July 2012, 50 companies remain scrutinized for having financial interests in one or both of the rogue nations. That means they must divest by next summer or the state’s public pensions will sever ties with them.
State Sen. Mike Stack (D-Philadelphia) authored Act 44, and Frankel supported the measure.
While Iran continues to defy Western demands that it stop enriching uranium, a critical step to making a nuclear weapon, “there is also the indication that the overall economic sanctions at every level have had an enormous impact,” Frankel told the Chronicle. “There is clearly an economic crisis in Iran, that is certainly something many of us hope will bring them to their sanity, so that armed intervention will not be necessary.”
In a prepared statement, Stack said, “We are making significant progress toward becoming a commonwealth that has absolutely no financial ties with these two nations that promote terrorism and genocide. The fact that one-third of these scrutinized companies have divested from Iran and Sudan shows that Pennsylvania is standing up to these volatile countries and to the companies that unwisely choose to do business with them.”
Frankel believes global sanctions are having an impact on Iran. He noted that $60 billion in construction projects in Iran have stopped and 70 percent of Iranian bank assets have been frozen.
“Quality of life for Iranian citizens is deteriorating,” Frankel said, “so I think there’s still some hope the impact of these [sanctions] will bring the Iranian government to its senses, or its citizens will be more effective in demanding a change.”
But Stack and Frankel are supporting further state action.
Next year, they plan to reintroduce bills in both houses of the legislature bill that would prohibit companies with direct investments in Iran’s energy sector from bidding for state contracts.
The proposed measures would prohibit individuals, financial institution or companies that provide goods and services or a line of credit worth at least $20 million to the energy sector of Iran from entering into a contract of $1 million or more with the Pennsylvania Department of General Services.
“This is being modeled on legislation being implemented in other states. There was some pragmatic issue of what that threshold is.”
(Lee Chottiner can be reached at email@example.com.)