[Congressional Record Volume 153, Number 82 (Thursday, May 17, 2007)]
[Senate]
[Pages S6309-S6310]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. OBAMA (for himself and Mr. Brownback):
  S. 1430. A bill to authorize State and local governments to direct 
divestiture from, and prevent investment in, companies with investments 
of $20,000,000 or more in Iran's energy sector, and for other purposes; 
to the Committee on Banking, Housing, and Urban Affairs.
  Mr. OBAMA. I rise today, along with Senator Brownback, to introduce 
the Iran Sanctions Enabling Act of 2007. Before proceeding, I want to 
commend Chairman Frank for introducing similar legislation on the House 
side--he is a major force behind this legislation and should be 
recognized for his work on this issue.
  This bill will enable citizens, institutional investors, and State 
and local governments to ensure that their money is not being used by 
companies that help develop Iran's oil and gas industry. This would 
place additional economic pressure on the Iranian regime with the goal 
of changing Iranian policies.
  The Obama-Brownback legislation does this in three ways:
  First, this legislation requires the U.S. government, every 6 months, 
to publish a list of companies that are investing more than $20 million 
in Iran's energy sector. This sunshine provision accomplishes two 
important objectives. It provides investors with the knowledge they 
need to make informed decisions about the consequences of their 
investments. And, since it is already illegal for U.S. companies to 
make such investments, it provides a powerful incentive for foreign 
companies to discontinue investments in Iran.
  Second, this legislation authorizes State and local governments to 
divest the assets of their pension funds and other funds under their 
control from any company on the list. Several states, such as Florida 
and Missouri, have already taken actions to achieve these ends. But the 
States' authority to undertake these measures is unclear, so an 
explicit authorization from Congress, contained in this bill, will 
resolve this issue.
  Third, this legislation seeks to give fund managers safe harbor and 
also provide investors with more choices. For fund managers who divest 
from companies on this list, the Obama-Brownback bill helps protect 
these managers from lawsuits brought by unhappy investors. The bill 
also expresses the sense of Congress that the government's own 401(k) 
fund, the Thrift Savings Plan, should create a ``terror-free'' and 
``genocide-free'' investment options for government employees.
  We need this bill, as Iranian actions have been well-documented. 
Iran's pursuit of a nuclear program, and its unwillingness to allow 
comprehensive international oversight, pose unacceptable risks to the 
United States and our allies. The international community has voiced 
its opposition to Iran's nuclear ambitions. For example, the U.N. 
Security Council passed resolutions last December, and again in March 
of this year, increasing sanctions on Iran for its failure to suspend 
uranium enrichment.
  The Iranian regime has been actively sowing the seeds of instability 
and violence in Iraq, with deadly consequences for American soldiers. 
Beyond Iraq's borders, Iranian leaders are exporting militancy, 
sectarianism, and rejectionism throughout the Middle East. Fueled by 
the billions of dollars it earns from oil and gas exports, Iran has 
been pumping money into radical Islamist terror groups like Hezbollah 
and Hamas. Every bit as worrying is the rhetoric of President Mahmoud 
Ahmadinejad publicly calling to ``wipe Israel off the map.''
  It is quite a list. But in the midst of all of this, there are signs 
that some Iranians understand the impact their regime's behavior is 
having on Iran's national interests. Conservatives in Iran look where 
the radicals are trying to take the country--more confrontation and 
more radicalism, and they are worried.
  We should send a message that, if Iran wishes to benefit from the 
international system, it must play by international rules. If it 
chooses to flout those rules, then the world will turn its back on 
Iran. Pressuring companies to cut their financial ties with Iran is an 
important piece of that process, and we should allow pension funds to 
do so.
  For all of its bluster, Iran is not a strong country. Its oil 
infrastructure is weak and badly in need of investment. The economy 
lurches under the weight of quasi-state run industries, and billions of 
dollars in Iranian cash sit offshore because Iranians have so little 
faith in their government's management of the economy. This is 
precisely why we need legislation along the lines of what I am 
introducing here today.
  In general, we need to think carefully about allowing divestment, 
which is a tool that can be misused. However, I believe that Iran is a 
special case. And, in this case, divestment legislation can dissuade 
foreign companies from investing in energy operations whose profits 
will be used to threaten us. It is not a magic bullet--there is none in 
this situation--but is one of a menu of actions, each of which can help 
us to deter Iranian aggression.
  We are currently involved in one ruinous war, and we need to avoid 
indiscriminate saber-rattling which could involve us in another. This 
administration's failure in Iraq has emboldened and empowered Iran, and 
the forces allied with it, including Hamas and Hezbollah. And while we 
should take no option, including military action, off the table, 
sustained and aggressive diplomacy combined with tough sanctions should 
be our primary means to deal with Iran. It is incumbent upon us to find 
and implement ways to pressure Iran short of war, ways that demonstrate 
our deep concern about Iran's behavior, and ways that will help us to 
exert leadership on this issue. This bill is one of those ways.

[[Page S6310]]

  I have called for direct engagement with Iran over its efforts to 
acquire nuclear weapons. But, direct dialogue, as we conducted with the 
Soviet Union during the Cold War, should be part of a comprehensive 
diplomatic strategy to head off this unacceptable threat. So should the 
legislation Senator Brownback and I are introducing today.
  I hope my colleagues will cosponsor the Obama-Brownback legislation. 
On the House side, I hope my colleagues in that Chamber sign on to the 
Frank bill. I look forward to working with others to get this bill 
signed into law.
  In closing, I want to thank Daniel McGlinchey and James Segel of 
Chairman Frank's staff for their work on this bill. They were 
extraordinarily helpful in putting together this legislation, and I 
would be remiss I did not recognize their efforts.

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