Official United Nations sanctions are having some effect on Iran but the real power lies in cutting off investment by foreign companies, particularly in the banking and energy sectors. American companies are already prohibited from doing business there, although General Electric may be seeking ways around this prohibition through foreign subsidiaries.
Frank Gaffney, formerly of Reagan’s Pentagon, has pioneered the use of private economic disinvestment in companies that do business with Iran, Syria, North Korea, or Sudan. On his Web site, he has identified almost 500 companies that do business with these terror sponsoring nations. They include such international powerhouses as Sieman’s, Shell, Repsol, BNP Paribus, and Hyundai. He has crafted a terror free mutual fund which can earn good returns while avoiding investment in any of these companies.
Missouri Treasurer Sarah Steelman — now running for governor — pioneered disinvesting pension funds in these companies. Now California, Florida, and Louisiana have followed suit.
We need to let these policies work and global isolation of Iran is the way to do it. Negotiating with Ahmadinejad would simply boost his domestic stature and enhance his political stability, the exact opposite of what we should — and must — be doing.