Consul General Shai Bazak Testifies at State House for Iran Divestiture Legislation

Consul General Shai Bazak, Consul General of Israel to New England recently testified before the Rhode Island Senate Committee on Finance in support of Attorney General Peter Kilmartin’s legislation to divest any and all state pension funds from companies that directly or indirectly do business and prohibit the state to enter into any contracts with companies doing business with Iran. 

Speaking to the Committee, Consul General Bazak noted the importance of the legislation to the security of the United States and to Israel.

Counsul General Bazak and AG Kilmartin

Reflecting on the proposed legislation, Consul General Bazak said "I am very pleased to see Attorney General Kilmartin spearheading efforts in Rhode Island to divest public funds from companies doing business with Iran," adding, "This legislation sends a message to the world that the people of Rhode Island stand with the world against Iran's pursuit of nuclear weapons."

Counsul General Bazak speaking to the committee

 

Attorney General Kilmartin introduced the Consul General and urged the Committee to join the 24 other states and the District of Columbia that have already passed similar legislation.  “We cannot support corporations and investors that support a dangerous regime that is developing nuclear weapons, brutally repress its own people and sponsor terrorism worldwide,” Attorney General Kilmartin told the Committee.  “Companies that wish to continue ‘business as usual’ in Iran should be subject to debarment from state government contracts.  We must join those states across the country and reject terrorism and the investment of Rhode Island dollars that could further terrorist needs.  This not only helps our nation’s fight against terrorism, but also protects our taxpayer investment and pension funds.  Simultaneously it also tells the investment and corporate community to put the interest of the safety of Americans above corporate profits.”

Senator Joshua Miller, sponsor of the legislation in the Senate (S0521), praised Consul General Bazak for advocating in person for the passage of the bill, “The Consul General brings with him a personal perspective of someone whose nation is directly threatened by the irresponsible and dangerous regime in Iran. Adding Rhode Island to the growing number of states that have taken legislative action to divest, instead of the approach of rules and regulation, will place us united with our fellow states and federal government in tightening the financial noose around Iran.”

In July 2010, the US Congress passed the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010, representing the most stringent sanctions regime the United States has imposed on Iran.  The bill targets companies selling refined petroleum products to Iran, as well as international banks with ties to the extreme Revolutionary Guard and other nefarious actors within Iran.  The Act gave states express legal permission for state and local governments to divest from companies that do business with Iran, specifically noting that such efforts do not run afoul of the Employment Retirement Income Security Act. The Act also provides safe harbor for private asset managers who divest in a similar manner.

Since Congress extended this legal permission to the states, divestiture and disbarment from Iran has been an initiative of the National Association of Attorneys General. 

Counsul General Bazak testifying

The legislation would require, within 90 days of the effective date, the State Retirement Board to identify all companies in which the public fund has direct or indirect holdings in companies with business operations in Iran.  If the company has direct holdings, the State Investment Commission must send written notice that the company may become subject to divestment.  Such a company has 90 days to cease scrutinized operations or convert them to inactive operations.  If not, the public fund shall divest according to a statutory schedule. 

 

The legislation would also create a new chapter that would prohibit bidding or entering into contracts with the State for goods or services with entities determined to engage in investment activities in Iran.  Within 90 days of the effective date, the General Treasurer must develop a list of entities who engage in investment activities in Iran.  The General Treasurer must provide such entity with written notice of its addition to the list and an opportunity to respond.  Entities who seek to bid or enter into contracts with the State must certify that the entity is not engaged in investment activities with Iran.  An entity who provides a false certification or fails to demonstrate that it has ceased its investment activities are subject to a civil penalty of one million dollars or twice the amount of the contract,  termination of the contract and ineligibility to bid on a contact for three years.

 

The bill was held for further study by the Senate Committee and is scheduled to be heard in the House Committee on Finance on April 30, 2013. Representative Mia Ackerman is the sponsor of the House bill, H5620.