14 Jun The (Not So United) States Divests From Iran
The WSJ($) reports on Page One today about various state legislatures (14 so far) passing or considering the passage of legislation requiring their public pension funds to divest from companies doing business with Iran. U.S. companies are already barred from doing business with Iran, but many foreign companies still do.
Although this sounds like small peanuts, the article suggests that for Ohio alone, divestment from Iran-linked foreign companies would require dumping “shares in more than 170 international companies and require the funds to sell, by one estimate, more than $9 billion in holdings.” Overall, the article estimates that public pension funds in the U.S. states control about $1 trillion in assets.
Surprisingly, the federal government in the U.S. is opposed to these sorts of state activities, despite its own position against Iran. But as a matter of U.S. law, I doubt that state investment decisions (these aren’t sanctions, but simply investment decisions) can be seriously challenged as a violation of the federal foreign affairs powers, but such challenges do appear to be in the works. In any event, Senators Barack Obama and Sam Brownback appear to be ready to introduce legislation shielding such legislation from federal preemption challeges so it seems likely these state efforts to influence foreign policy on Iran will continue to survive in the near future.