Economy & Budget

Give Me Your Pension

A huge number of Americans own stocks and bonds, but some of the largest investors are company, state and federal pension plans. With the financial power of these pension plans exercised by a few experts, most people have been unaware that the pension plan on which they rely — or in which their state government invests — may be supporting  terrorist governments. 

US law prevents direct investment in terrorist states, but companies that do business with those countries are lawful investments for US pension plans.  To reverse that, Missouri, Louisiana, California and other states are leading a national effort to implement divestment legislation precluding their pension plans from buying stock of companies that do business with nations such as Iran.

The Center for Security Policy’s Divest Terror Initiative promotes divesting from four state sponsors of terrorism: Iran, Sudan, Syria and North Korea. A recent poll conducted by CSP confirmed that 80% of those surveyed said they would discontinue their investment if they knew it was linked to a state sponsor of terrorism. It’s time to get the word out.

California Assemblyman Joel Anderson became a leader in the movement after he introduced an Iran divestment measure that may soon be signed by Republican Gov. Arnold Schwarzenegger, according to reports.

“As a state legislator, my main focus is our fiscal return and protecting our assets,” said Anderson in a phone interview. “The other point is pretty clear…everyone understands that money is the mothers milk of terrorism.”

Anderson said his measure focuses specifically on any company engaging in business in the defense and energy sector or with known terrorist organizations inside of Iran. He cited French energy company Total and Royal Dutch Shell as examples. 

Current divestment policy and pending bills focus mostly on Iran. Increasingly volatile threats including its nuclear weapons program and a historically documented record of not complying with UN sanctions or diplomatic agreements make Iran a critical economic target for the US. Anderson maintained that there is a possibility of up to $200 billion being divested from Iran.

Anderson said that denying Iran these funds “could bring Iran back to the peace table to rejoin the world community” because “right now they are a rogue nation.” 

Most recently, The Iran Sanctions Enabling Act, introduced by Financial Services Committee Chairman Barney Frank (D-Mass), passed through the House of Representatives by a vote of 408 to 6. According to a press release, Rep. Christopher Shays (R-Conn.), a Ranking Member on the Oversight and Government Reform Subcommittee on National Security and Foreign Affairs, said, “No American should have to worry that his or her investments or pension money was earned in support of genocide or terrorism.”

US sanction laws prohibit Americans from direct investment with terrorist-sponsored states but investment with international companies gets around that ban. These companies, over 400 globally according to www.divestterror.org, ignore the possible benefits to the terrorist states and the repercussions they might suffer if investments in them were banned.

History proves divestment an effective weapon against rogue regimes. Divestment campaigns in South Africa helped defeat apartheid and pushed South Africa to end its nuclear weapons program. With Iran, the stakes are even higher for America. One state leader — who is garnering too little attention for her efforts is the State Treasurer of Missouri.

Sarah Steelman (R), first elected in 2004 , told me that America hasn’t been using its most powerful weapon — financial markets — sufficiently to fight terror.

“Iran will start to feel squeeze on their own economy…and then I think we’ll see a different. Iran,” Steelman said in a phone interview. “If America and other countries are not providing money they need, they’re going to act differently towards us. And we don’t want to them to have the capacity to have nuclear weapons.” 

Perhaps the best-kept secret about divestment is that it’s a smart investment strategy.

Missouri launched the terror-free Investment Trust in 2006. According to Divest Terror.org, Missouri’s international terror-free portfolio “has outperformed the benchmark index by 3.9%.” Steelman said there is some reluctance in government to go terror-free but Missouri will continue to promote this policy and possibly move toward legislation.

“It’s about educating the public,” she told HUMAN EVENTS. “No one wants to support terrorism…if we cut off money going to terrorists, it’s going to help and we’ve seen that in Iran with their suffering economy.”

Steelman added that people are shocked to find out that billions of dollars of their money is being invested in these companies.  

“Terror – free investing is about keeping our families and our country safe, and it’s about putting the power where it belongs — with the people,” she said.

Anderson added that the concern over lost returns is not valid. “Some of the best returns we’ve received are from terror-free investments…”

More states are recognizing the importance of this kind of legislation. Last month, a bill authored by Louisiana State Legislator Pete Schneider passed unanimously in both the House and Senate to become the nation’s first terror-free divestment law. The bill, HB 864, establishes a terror free investment index and was drafted and supported by state pension funds.

In June, Florida became the first state to outlaw pension fund investments in any companies doing business with Iran’s energy sector.

“This is what’s right for America, its right for the world…it says that Iran, the world’s leading sponsor of terror, we will not stand idly by anymore,” said Florida Gov. Charlie Crist in the International Herald Tribune.

Strong bi-partisan support connects the states on these measures. The sooner these policies are implemented, the greater the pressure will be on Iran and other terrorist regimes whose economies benefit from these investments.  The pension-holders benefit from increased value of the pension fund. It’s not just good foreign policy:  it’s good financial policy as well.


Sign Up