February 2, 2011
Put some teeth into Iran divestment
Today was a difficult day. I met with Iranian dissidents, former political prisoners who had been tortured by the current regime. Seeing their scars was particularly difficult for me. But the stories of these people just personalized for me what I already understood about modern-day Iran. This is a government that executes a person every eight hours. That backs terrorists throughout the region and the world. That has made statements about Israel that are immensely disturbing.
As a student of history, I’ve often wondered if nations recognized crossroads when they faced them; if past leaders at key points in time understood that decisions about to be made would determine the success or failure of their society, the life or death of their people, the rise or fall of their empire. On the topic of Iran, I think we are at such a crossroads now, and the next actions we take may very well determine whether peace, or persecution and paranoia, prevail in Iran and globally.
Normally, I don’t like it when states or localities involve themselves in international affairs. The U.S. Constitution reserves foreign-relations authority for the federal government, and it is customary to defer to our federal representatives on those issues. On the issue of Iran, we Southern Californians have terrific stalwarts representing our points of view in Congress, namely Congressmen Brad Sherman, Adam Schiff and Howard Berman, among others.
But California is in a unique position to aid our federal representatives in achieving their goals to foster tolerance and civil rights in Iran. As the eighth largest economy in the world, California can impose painful economic sanctions. Our state pension funds send billions of dollars abroad in foreign investment.
In 2007, the California State Legislature decided that Iran will no longer see money from the pockets of state government employees to fund Iran’s reckless nuclear program and hateful agenda. The California Public Divest from Iran Act (CPDIA) called on the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) to divest from all companies operating in the defense, nuclear, petroleum and natural-gas sectors of Iran. We had reached a crossroads, and we had made a decision to demand peace instead of hatred.
If only it were that easy. The years since CPDIA have been disappointing. CalPERS and CalSTRS have not divested from companies operating in Iran, stating that their holdings in those companies were too big to divest from without hurting their funds’ rates of return. CalPERS and CalSTRS have also, for the most part, declined to state how much money was going to companies on the “do not invest” list. And they have stated that the transaction costs related to divestment would be too high, even though leaving money invested in such an unstable country could clearly result in a total loss of capital in future years.
It is frustrating that the will of the people, as expressed through the Legislature, is being ignored. But this does not mean we should retreat. To ensure that the Iranian regime does not profit from business with the State of California, I, and other members of the Legislature, are formulating additional ideas, with teeth, to mandate divestment from Iran.
I ask you to continue the fight too. Ask your friends who are retired state employees if they know their hard-earned investment dollars are being used to invest in a regime that tortures people like the dissidents with whom I recently met. Ask them if they are aware those dollars are being spent to help a regime so diametrically opposed to our foreign-policy interest and values. Then, urge them to write a letter to the relevant retirement fund asking for full compliance with CPDIA.
The California Legislature will keep the pressure on, and I hope you do too.
Assemblyman Mike Gatto (D-Los Angeles) represents the cities of Burbank, Glendale, and parts of Los Angeles, including Los Feliz, Silver Lake, North Hollywood, Toluca Lake, Valley Glen and Van Nuys.
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