Iran is the leading state sponsor of terrorism. The mullah regime is providing weapons to kill our soldiers in Iraq. It is working furiously to develop nuclear weapons. We certainly do not want to go to war against Iran -- though perhaps we could do a more aggressive job of keeping the mullahs' minions out of Iraq. But we have other weapons that are being deployed now -- not by the military, the federal government or officials in Washington, but by state government officials and legislatures in state capitals, who are working to divest their pension funds of stocks in companies that do business in Iran.
The divestment movement has been gaining speed during the past year. In 2006, Missouri State Treasurer Sarah Steelman ordered the Missouri Investment Trust to divest stock in companies that do business in Iran. The California Assembly has passed a divestment bill, and it is now before the state Senate; Gov. Arnold Schwarzenegger has promised a major signing ceremony if it passes. A bill limited to Iran's energy sector has been passed into law in Florida. A divestment bill has been passed in committee in the Pennsylvania House, and a divestment resolution was passed by the Georgia Senate. In Louisiana, a bill to set up a "terror-free international index" has been passed into law. Divestment bills have been filed in Ohio, New Jersey, Michigan, New York, Massachusetts, Maryland and Texas.
Many of these bills have met with opposition. Pension fund administrators, such as those at California's giant CalPERS, have opposed them. They argue that divesting would cost them money. But the fact is that U.S.-based companies already are prohibited from doing business in Iran. Firms that do the most business in Iran are French (Alcatel, BNP Paribas, Total), Italian (ENI), Korean (Hyundai), Chinese (PetroChina) and Russian (Statoil). The potential losses to pension funds are almost certainly minimal; a fund can find plenty of international stocks for its portfolio without touching those who do business in Iran.
At the same time, divestment can hurt the targeted companies enough to persuade them to change their ways. We learned this 20 years ago from the divestment movement directed against apartheid South Africa, which targeted many U.S.-based firms. Some of them withdrew from South Africa -- a fact that helped persuade South Africa's white rulers to end apartheid.