The government of Pennsylvania has a message for businesses operating in the Keystone State: If a company wants to do business with Iran, business with the commonwealth will not be so easy.
That’s the mandate of the newly enacted Iran Free Procurement legislation sponsored by state House Democratic Caucus Chairman Dan Frankel of Allegheny County. HB 201, a bill prohibiting companies that invest in Iranian energy-related activities from entering into certain procurement contracts in Pennsylvania, became law on Tuesday, when it was signed by Republican Gov. Tom Corbett. It had won passage in the General Assembly last week, when the House and the Senate agreed to a marked-up version of the bill.
The new law bars any company that invests more than $20 million in any Iranian energy-related activities from entering into a state procurement contract worth more than $1 million through the Pennsylvania Department of General Services.
Similar laws have been enacted in several other states, including California, Indiana, Maryland, and Florida, according to Hank Butler, executive director of the Pennsylvania Jewish Coalition, which worked with Frankel on the legislation.
“We look at this as the next step in our terror-free investing,” Butler said, a continuation to the 2010 passage of a law prohibiting the commonwealth from investing in companies doing business with Iran and Sudan. That law has proven to be an effective means of curtailing business dealings with countries that sponsor terrorism, according to Frankel.
The new law “is the second part of a two-stage plan for Pennsylvania to take a stand against Iran,” Frankel said in a prepared statement. “In 2010, we passed Act 44, which requires the four state retirement funds — PSERS, SERS, PMRS and the Treasurer’s Office — to divest from companies doing business with Iran or Sudan. A report last year from the state Treasurer’s Office shows that almost 25 companies have ceased business with Iran as a result of Act 44.”
Under the new legislation, DGS is mandated to keep and maintain a list of companies that invest $20 million in Iran’s energy sector and to post this information on its website.
To enter into a DGS contract worth more than $1 million, a company has to file an affidavit with the department certifying that it is not on the list of companies that do business with Iran. The penalty for false certification is $250,000, or twice the amount of the contract, whichever is greater, and suspension of the existing contract for three years. After three years, DGS could terminate the contract.
“This legislation presents a clear choice: Either companies can do business with the terror-sponsoring state of Iran or they can do business with the commonwealth of Pennsylvania. But they can’t do both,” Frankel said.
Through its lobbying efforts, the Pennsylvania Jewish community was instrumental in seeing that the terror-free bill became law, according to Butler.
“The Federations have spoken in one voice,” he said. “When legislators all over Pennsylvania get the same phone calls, it definitely has an impact. It was a great team effort.”
The new law makes a “powerful statement,” according to Gregg Roman, director of the Jewish Federation of Greater Pittsburgh’s Community Relations Council and a board member of the PJC. In assisting the PJC in its lobbying efforts, Roman helped form counter-arguments and explain the fallacies of those entities opposing the anti-terrorism bill, he said.
He credited Frankel, as well as Rep. Mike Turzai (R-Allegheny), Senate Minority Leader Jay Costa (D-Allegheny) and Sen. Joe Scarnati (R-Jefferson), as being instrumental in getting the bill passed.
“They were all friends to the Pittsburgh Jewish community in this effort,” Roman said.
Frankel said he worked closely with Sen. Mike Stack (D-Philadelphia) on the legislation.
Coupled with last summer’s enactment of the Holocaust and genocidal education law, and the progress being made on Pennsylvania’s Educational Improvement Tax Credit program, which would ultimately increase the number of scholarships available to day schools, Butler noted: “It’s been a pretty good session.”
Toby Tabachnick can be reached at email@example.com.