Pennsylvania Divests Itself of Companies Working With Iran, Sudan; Somehow Overlooks Israel

Pennsylvania, the home state of myself and frequent coauthor Kevin Funk, passed legislation (Act 44 of 2010) over the summer months that requires the state’s two largest pension funds and its treasury department to divest from investments in companies that have business in Sudan or Iran. We wrote an opinion piece in May, before the legislation (Senate Bill 928) was signed into law by Governor Ed Rendell on July 2nd, criticizing the measure.

However, we were unable to place it in any of the state’s leading daily papers (the Pittsburgh Post-Gazette, Harrisburg Patriot-News, and the Philadelphia Inquirer). Nor, to my knowledge, was a principled, critical note heard from any other quarter.

The blackout on criticism of a ‘good divestment’ serves as an indication that local media can be at least as hostile to unwanted dissenting views as national media when it conflicts with agendas close to home. Certainly, there was no visible opposition from the politicians. Indeed, the bill “received overwhelming support in the Senate and unanimous support in the House of Representatives.” Pennsylvania is not alone — as we note in the piece, many other states have passed similar legislation.

The Inky (Philadelphia Inquirer) reports that:

Pennsylvania’s pension funds resisted past attempts to divest companies in Northern Ireland and South Africa amid concerns that politicizing the underfunded pension plans would hurt investment returns. ….

What made Harrisburg give in this time? “The different Jewish federations throughout the state” mobilized in support of the bill, said Matthew Handel, an executive at Shire Pharmaceuticals in suburban Philadelphia, who is chairman of the Pennsylvania Jewish Coalition.

The America-Israel Public Affairs Committee, which calls itself “America’s Pro-Israel Lobby,” joined to back the bill, said Robin Schatz, director of government affairs for the Jewish Federation of Greater Philadelphia.

The bill also got support, in its early stages, from members of the Darfur Coalition, a group of U.S. activists who oppose the national government in war-torn Sudan, Schatz added. She credited State Rep. Babette Josephs (D., Phila.) for bringing in the Darfur activists.

Why is Pennsylvania taking on the enemies of Israel, a foreign country?

….”here on the banks of the Susquehanna, we can leverage $400 million worth of investments in a way that supports our allies, for example Israel, and isolates our enemies.”….

[Rep. for Abington and Upper Dublin, Josh Shapiro, who sponsored a similar bill in the House] told me he agrees with remarks earlier this month in support of blockades against Israel’s enemies, by U.S. Sen. Charles Schumer (D., N.Y.).

According to Schumer’s speech, Israel’s blockade of the Palestinian Gaza territory “makes sense,” so long as “people [are] not starving to death,” because it seeks “to strangle them economically” until they agree “that a path of living with Israel and the Jews is a better way to go than a path of total and obdurate confrontation.”

The supremely Orwellian character of ostentatiously moralizing in ways that are practically guaranteed to have no effect while simultaneously endorsing the odious doctrine of collective punishment and virtual enslavement reveals much about the nature of power in our society.

Our original opinion piece follows.

State Legislature Doublethink on Genocide Divestment

It’s not every day that one hears the words “moral and fiscally responsible” used in conjunction with the Pennsylvania state legislature. With Democratic Sen. Mike Stack of Philadelphia being paraphrased to that effect in reference to a bill he sponsored to “combat terrorism and genocide,” it merits attention.

The bill in question, “The Protecting Pennsylvania’s Investment Act” (SB 928), recently sailed through the Pennsylvania Senate. It would require divestment of the state’s two largest pension funds and its Treasury Department from companies doing substantial business in Sudan or Iran, and looks to have a clear legislative path forward.

The absurdity of the senate bill is indicated by the conditions that would deactivate the bill, amongst them a declaration by the federal government that genocide is no longer occurring in Sudan.

In fact, the applicability of the genocide label even during the height of the violence in the western Sudanese region of Darfur was doubted by many legal scholars, and Washington’s declaration was admitted to be made to appeal to domestic constituents instead of being an objective assessment of the violence in the region. While Darfur remains the sight of sporadic government violence and millions await a lasting peace that would permit them to return to their homes, virtually no one maintains that actual “genocide” is ongoing in Darfur. Thus, the criteria for satisfying the bill would appear to already be met, at least if one were to rely upon a source more reliable than the federal government.

Unfortunately, despite their loftiness, there is little prospect that Stack’s stated aims will be achieved. While divestment from businesses engaged in flagrantly immoral conduct should be encouraged, there are readily apparent motives beyond humanitarian goodwill in the work of the legislature. For starters, the choice of targets — Sudan and Iran — raises questions.

While we will focus on the case of the former, it is important to note that the Iranian regime, despite being a serious human rights abuser, is a questionable target for a divestment campaign. Washington’s wind-blowing aside, what is the actual evidence suggesting that Iran is a “state sponsor of terrorism”?

Sudan is a somewhat better choice for divestment given that the central government is behind one of the more sizeable bloodbaths of the past decade, in Darfur. However, there too, questions arise. In fact, Sudan is already under U.S. sanctions and so U.S. companies are not legally allowed to operate in the country.

Accordingly, divestment can only be from foreign companies listed on U.S. stock exchanges — that is, very indirect divestment. Though the divestment bill does laudably focus on divesting from military and oil operations, the fact that Sudan is already under U.S. sanctions means that Pennsylvania’s divestment would almost certainly be too inconsequential to make any difference. This is far different from the oft-cited case of the divestment campaign against South Africa, as U.S. companies operated freely under the Washington-allied apartheid regime and thus provided a direct link to the abuses that is simply missing in the Sudan case.

Further questions arise regarding the efficacy of the divestment bill. The Associated Press notes that 28 other U.S. states have already divested from either or both countries. And yet there has been no actual assertion of evidence that such divestment has positively affected the human rights situation in either country. One may further wonder how clearly Pennsylvania’s message to Sudan will come through since Washington has nurtured a close relationship with key intelligence figures in the Khartoum establishment as part of the supposed “War on Terror,” in fact the very same figures implicated in the violence in Darfur.

Assuming Senator Stack’s words are to be taken seriously, one might also ask why far more direct measures to “combat terrorism and genocide” are not contemplated. For several years, a grassroots movement has been building to divest from companies implicated in the illegal Israeli occupation of Palestinian land. Israel is a far more logical target, both for practical efficacy — far more investments are likely to be connected to Israel than Sudan or Iran — and symbolically. Yet neither our State Legislature nor any other state has contemplated such a move.

While the divestment bills are unlikely to have much impact on Iran or Sudan, they do contribute to state propaganda. Moral pieties in the service of power are never a pretty thing to witness, no matter how petty and irrelevant. It is hard to avoid concluding that the current divestment bills under consideration are merely politically opportunistic measures, destined to be as ineffective as they are self-serving.

Kevin Funk and Steven Fake are the authors of “Scramble for Africa: Darfur – Intervention and the USA” (Black Rose Books) and graduates of the University of Pittsburgh. They maintain a website with their commentary at scrambleforafrica.org.