Reinsch is also working to prevent Ohio from joining other states striving to protect their fiduciaries from what the Securities and Exchange Commission calls “Global Security Risk” arising from investments in companies partnering with the Iranian regime. His team is horrified at the prospect of Ohio compelling Wall Street to create Iran-free accounts, indexes and index-managed products – investment vehicles that would exclude companies doing business with Tehran from many billions worth of state pension fund investments.
In advance of a hearing last week to consider legislation sponsored by State Reps. Joshua Mandel (who knows a thing or two about Iran from his recently completed combat tour as a Marine in Iraq) and Shannon Jones, Reinsch circulated a letter warning the bill “would broadly and indiscriminately harm U.S. and foreign companies as well as individual pensioners” in Ohio. He also claimed that a funding cut-off would be “extremely unlikely to affect the behavior of the Iranian government or help the Iranian people.”
Neither of these can be said of the Mandel-Jones legislation in Ohio. It is targeted legislation that would affect only companies that are doing business in or with our enemies in Iran. In a riveting congressional hearing chaired in Washington last week by Rep. Brad Sherman (Democrat of California), Missouri Treasurer Sarah Steelman testified that her state’s similar efforts to invest terror-free have not harmed pensioners, let alone indiscriminately so. In fact, the Missouri Investment Trust, the first public fund in the country to divest the stocks of companies doing business with Iran, Syria, Sudan and North Korea, has actually performed better since it was taken terror-free.
As to the effect on Iran of such initiatives as those underway in not only Ohio and Missouri but Florida, California, Illinois, Georgia and Louisiana, they actually could prove as dramatic as the divestment campaign mounted twenty years ago against South Africa. That campaign indisputably helped compel the apartheid regime to abandon its racist policy and ultimately contributed to the government’s fall from power. Iran is already in difficult economic straits; if fully brought to bear, the power of America’s capital markets could mightily affect corporate behavior, undermining – and, hopefully, helping to bring down – the mullahocracy in Iran.
Interestingly, Reinsch told a reporter, “You don’t win this particular battle in the hearings; you win the battle in the backroom, where you can explain the consequences of the legislation.” In other words, his clients’ case cannot stand the light of day. Their only chance of success lies in spooking legislators in settings where their constituents and the press cannot monitor the lobbyists’ misinformation and intimidation.
All the more reason for the eyes of Ohioans, and indeed the Nation, to be on Wednesday’s hearing in Columbus of the House Financial Institutions, Real Estate and Securities Committee. It should be there, rather than the “backrooms” preferred by terror’s lobbyists, that the fate of the most effective terror-free investing legislation introduced to date should be determined, clearing the way for its swift approval and enactment and the creation thereby of a model for every state and American investor.
Frank Gaffney Jr. is the founder and president of the Center for Security Policy and author of War Footing: 10 Steps America Must Take to Prevail in the War for the Free World .
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