[Congressional Record Volume 153, Number 123 (Monday, July 30, 2007)]
[House]
[Pages H8855-H8861]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IRAN SANCTIONS ENABLING ACT OF 2007
Mr. SHERMAN. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 2347) 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,
as amended.
The Clerk read the title of the bill.
The text of the bill is as follows
H.R. 2347
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Iran Sanctions Enabling Act
of 2007''.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) The Convention on the Prevention and Punishment of the
Crime of Genocide, completed at Paris, December 9, 1948
(commonly referred to as the ``Genocide Convention'') defines
genocide as, among other things, the act of killing members
of a national, ethnic, racial, or religious group with the
intent to destroy, in whole or in part, the targeted group.
In addition, the Genocide Convention also prohibits
conspiracy to commit genocide, as well as ``direct and public
incitement to commit genocide''.
(2) 133 member states of the United Nations have ratified
the Genocide Convention and thereby pledged to prosecute
individuals who violate the Genocide Convention's prohibition
on incitement to commit genocide, as well as those
individuals who commit genocide directly.
(3) On October 27, 2005, at the World Without Zionism
Conference in Tehran, Iran, the President of Iran, Mahmoud
Ahmadinejad, called for Israel to be ``wiped off the map,''
described Israel as ``a disgraceful blot [on] the face of the
Islamic world,'' and declared that ``[a]nybody who recognizes
Israel will burn in the fire of the Islamic nation's fury.''
President Ahmadinejad has subsequently made similar types of
comments, and the Government of Iran has displayed
inflammatory symbols that express similar intent.
(4) On December 23, 2006, the United Nations Security
Council unanimously approved Resolution 1737, which bans the
supply of nuclear technology and equipment to Iran and
freezes the assets of certain organizations and individuals
involved in Iran's nuclear program, until Iran suspends its
enrichment of uranium, as verified by the International
Atomic Energy Agency.
(5) Following Iran's failure to comply with Resolution
1737, on March 24, 2007, the United Nations Security Council
unanimously approved Resolution 1747, to tighten sanctions on
Iran, imposing a ban on arms sales and expanding the freeze
on assets, in response to the country's uranium-enrichment
activities.
(6) There are now signs of domestic discontent within Iran,
and targeted financial and economic measures could produce
further political pressure within Iran. According to the
Economist Intelligence Unit, the nuclear crisis ``is imposing
a heavy opportunity cost on Iran's economic development,
slowing down investment in the oil, gas, and petrochemical
sectors, as well as in critical infrastructure projects,
including electricity''.
(7) Targeted financial measures represent one of the
strongest non-military tools available to convince Tehran
that it can no longer afford to engage in dangerous,
destabilizing activities such as its nuclear weapons program
and its support for terrorism.
(8) Foreign persons that have invested in Iran's energy
sector, despite Iran's support of international terrorism and
its nuclear program, have provided additional financial means
for Iran's activities in these areas, and many United States
persons have unknowingly invested in those same foreign
persons.
(9) There is an increasing interest by States, local
governments, educational institutions, and private
institutions to seek to disassociate themselves from
companies that directly or indirectly support the Government
of Iran's efforts to achieve a nuclear weapons capability.
(10) Policy makers and fund managers may find moral,
prudential, or reputational reasons to divest from companies
that accept the business risk of operating in countries that
are subject to international economic sanctions or that have
business relationships with countries, governments, or
entities with which any United States company would be
prohibited from dealing because of economic sanctions imposed
by the United States.
SEC. 3. TRANSPARENCY IN CAPITAL MARKETS.
(a) List of Persons Investing in Iran Energy Sector or
Selling arms to the Government of Iran.--
(1) Publication of list.--Not later than 6 months after the
date of the enactment of this Act and every 6 months
thereafter, the President or a designee of the President
shall, using only publicly available (including proprietary)
information, ensure publication in the Federal Register of a
list of each person, whether within or outside of the United
States, that, as of the date of the publication, has an
investment of more than $20,000,000 in the energy sector in
Iran, sells arms to the Government of Iran, or is a financial
insitutiton that extends $20,000,000 or more in credit to the
Government of Iran for 45 days or more. To the extent
practicable, the list shall include a description of the
investment made by each such person, including the dollar
value, intended purpose, and status of the investment, as of
the date of the publication.
(2) Prior notice to persons.--The President or a designee
of the President shall, at least 30 days before the list is
published under paragraph (1), notify each person that the
President or the designee, as the case may be, intends to
include on the list.
(3) Delay in including persons on the list.--After
notifying a person under paragraph (2), the the President or
a designee of the President may delay including that person
on the list for up to 60 days if the President or the
designee determines and certifies to the Congress that the
person has taken specific and effective actions to terminate
the involvement of the person in the activities that resulted
in the notification under paragraph (2).
(4) Removal of persons from the list.--The President or a
designee of the President may remove a person from the list
before the next publication of the list under paragraph (1)
if the President or the designee determines that the person
does not have an investment of more than $20,000,000 in the
energy sector in Iran, does not sell arms to the Government
of Iran, and is not a financial insitutiton that extends
$20,000,000 or more in credit to the Government of Iran for
45 days or more.
(b) Publication on Website.--The President or a designee of
the President shall ensure that the list is published on an
appropriate government website, updating the list as
necessary to take into account any person removed from the
list under subsection (a)(4).
(c) Definition.--In this section, the term ``investment''
has the meaning given that term in section 14(9) of the Iran
Sanctions Act (50 U.S.C. 1701 App.).
[[Page H8856]]
SEC. 4. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST
FROM CERTAIN COMPANIES INVESTED IN IRAN'S
ENERGY SECTOR.
(a) Statement of Policy.--It is the policy of the United
States to support the decision of State governments, local
governments, and educational institutions to divest from, and
to prohibit the investment of assets they control in, persons
that have investments of more than $20,000,000 in Iran's
energy sector, persons that sell arms to the Government of
Iran, and financial insitutitons that extend $20,000,000 or
more in credit to the Government of Iran for 45 days or more.
(b) Authority to Divest.--
(1) In general.--Notwithstanding any other provision of
law, a State or local government may adopt and enforce
measures to divest the assets of the State or local
government from, or prohibit investment of the assets of the
State or local government in--
(A) persons that are included on the list most recently
published under section 3(a)(1), as modified under section
3(a)(4);
(B) persons that sell arms to the Government of Iran;
(C) financial insitutitons that extend $20,000,000 or more
in credit to the Government of Iran for 45 days or more; and
(D) persons that are included on any list of entities with
investments in Iran, entities doing business in Iran, or
entities doing business with the Government of Iran, which is
issued pursuant to a law that--
(i) authorizes a State or local government to divest from,
or prohibits a State or local government from investing
assets in, the persons; and
(ii) is enacted by a State or local government on or before
the first publication of a list under section 3.
(2) Definitions.--In this subsection:
(A) Investment.--The ``investment'' of assets includes--
(i) a commitment or contribution of assets; and
(ii) a loan or other extension of credit of assets.
(B) Assets.--The term ``assets'' refers to public monies
and includes any pension, retirement, annuity, or endowment
fund, or similar instrument, that is controlled, directly or
indirectly, by a State or local government.
(c) Preemption.--A measure of a State or local government
that is authorized by subsection (b) is not preempted by any
Federal law or regulation.
SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY
MUTUAL FUNDS.
Section 13 of the Investment Company Act of 1940 (15 U.S.C.
80a-13) is amended by adding at the end the following new
subsection:
``(c) Safe Harbor for Changes in Investment Policies.--
Notwithstanding any other provision of Federal or State law,
no person may bring any civil, criminal, or administrative
action against any registered investment company or person
providing services to such registered investment company
(including its investment adviser), or any employee, officer,
or director thereof, based solely upon the investment company
divesting from, or avoiding investing in, securities issued
by companies that are included on the most recent list
published under section 3(a)(1) of the Iran Sanctions
Enabling Act of 2007, as modified under section 3(b) of that
Act. For purposes of this subsection the term `person' shall
include the Federal government, and any State or political
subdivision of a State.''.
SEC. 6. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY
EMPLOYEE BENEFIT PLANS.
Section 502 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1132) is amended by adding at the end the
following new subsection:
``(n) No person shall be treated as breaching any of the
responsibilities, obligations, or duties imposed upon
fiduciaries by this title, and no action may be brought under
this section against any person, for divesting plan assets
from, or avoiding investing plan assets in, persons that are
included on the most recent list published under section
3(a)(1) of the Iran Sanctions Enabling Act, as modified under
section 3(a)(4) of such Act.''.
SEC. 7. RULE OF INTERPRETATION.
Nothing in this Act shall be interpreted to limit the
authority of any person to divest, or avoid investment in,
any asset, or to adopt or enforce any measure to do so.
SEC. 8. DEFINITIONS.
In this Act:
(1) Iran.--the term ``Iran'' includes any agency or
instrumentality of Iran.
(2) Energy sector.--The term ``energy sector'' refers to
activities to develop petroleum or natural gas resources, or
nuclear power.
(3) Person.--The term ``person'' means--
(A) a natural person as well as a corporation, business
association, partnership, society, trust, any other
nongovernmental entity, organization, or group;
(B) any governmental entity or instrumentality of a
government, including a multilateral development institution
(as defined in section 1701(c)(3) of the International
Financial Institutions Act); and
(C) any successor, subunit, or subsidiary of any entity
described in subparagraph (A) or (B).
(4) State.--The term ``State'' includes the District of
Columbia, the Commonwealth of Puerto Rico, the United States
Virgin Islands, Guam, American Samoa, and the Commonwealth of
the Northern Mariana Islands.
(5) State or local government.--
(A) In general.--The term ``State or local government''
includes--
(i) any State and any agency or instrumentality thereof;
(ii) any local government within a State, and any agency or
instrumentality thereof;
(iii) any other governmental instrumentality; and
(iv) any public institution of higher education.
(B) Public institution of higher education.--The term
``public institution of higher education'' means a public
institution of higher education within the meaning of the
Higher Education Act of 1965.
SEC. 9. SUNSET.
This Act shall terminate 30 days after the date on which
the President has certified to Congress that--
(1) the Government of Iran has ceased providing support for
acts of international terrorism and no longer satisfies the
requirements for designation as a state-sponsor of terrorism
for purposes of section 6(j) of the Export Administration Act
of 1979, section 620A of the Foreign Assistance Act of 1961,
section 40 of the Arms Export Control Act, or any other
provision of law; and
(2) Iran has ceased the pursuit, acquisition, and
development of nuclear, biological, and chemical weapons and
ballistic missiles and ballistic missile launch technology.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
California (Mr. Sherman) and the gentleman from New Jersey (Mr.
Garrett) each will control 20 minutes.
The Chair recognizes the gentleman from California.
General Leave
Mr. SHERMAN. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and include
extraneous materials on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection
Mr. SHERMAN. Mr. Speaker, I yield myself so much time as I may
consume.
Mr. Speaker, at Natans, the centrifuges are turning. Iran is perhaps
half a decade away from a nuclear weapon. Iran, however, is not without
its Achilles heels. The mullahs have mismanaged the economy to the
point where they are rationing gasoline in Tehran. Iran has a vibrant
political culture in which the behavior of the elites and the behavior
of the people can indeed be influenced by outside information. The key
is to be able to broadcast into Iran on RadioFarda a message. That
message is that Iran will be diplomatically and economically isolated
around the world, and especially from the United States, unless it
drops its nuclear weapons program. The problem is, I can't lie that
well in Farsi. The fact is we have not yet begun to use the economic
and diplomatic levers available to the United States. And it is not yet
true that Iran's nuclear program subjects it to the possibility of
economic and diplomatic isolation.
The bad news, Mr. Speaker, is that we have not had the political will
to reach into our economic and diplomatic tool box. The good news is
we've still got a lot of tools lying there in the tool box. One of the
best is divestiture. Divestiture needs to be part of a bigger economic
and diplomatic strategy to isolate the government in Tehran. If we can
dry up, however, Iran's access to foreign investment, if we can sever
the ties between the multinational corporations and the government of
Iran, we may be able to increase the cost of Iran's behavior and put
enough pressure on that regime so either it decides, or its people
insist, that it abandon its nuclear program.
Now, the key is to change the behavior of these multinational
corporations, and the best way to do that is with American policies
that make them choose between the benefits of doing business with the
American people, American investors on the one hand, and the so-called
benefits they might get from doing business with Tehran on the other.
So what does this bill do to begin and continue the divestment
process? The bill mandates nothing except for the creation of a list by
the administration, which I will get to in just a second. It provides a
clear authorization from Congress for States to divest from companies
conducting the certain identified activities in Iran, and it would
shield both private pension plan managers, mutual funds and public
sector pension plan managers from harassing lawsuits should they decide
on their
[[Page H8857]]
own initiative to divest from those companies carrying out certain
activities in Iran. In doing so, this bill sweeps away an excuse from
those investment managers who, up until now, haven't wanted to be
bothered to divest, even though their beneficiaries are demanding it.
This bill also provides some standards. I mentioned this in the
discussion of the Sudan bill. First, people want to know what
activities should cause them to divest. Now, I have more than sympathy
with those who say one penny of activity, sell one candy bar in Tehran
and I don't want my money invested in your company. That's a purist
approach. That's an approach some may choose to take. I think the
better harnessing of America's economic power and the power of
individual investors, individual decisionmakers, pension plans, mutual
funds, et cetera, is to focus on three activities, and that is what
this bill does.
It requires that 6 months after enactment, the U.S. Government, the
administration, probably the Treasury Department but whichever
department is identified by the President, produce a list of those
international corporations that engage in any one of these three
activities. The first is to invest $20 million in the energy sector of
Iran. That is a standard we have adhered to for a long time since the
adoption of what was then called the Iran and Libya Sanctions Act, now
the Iran Sanctions Act.
{time} 1330
The second are those firms selling munitions to the government in
Tehran. And the third are those who extend credit of $20 million or
more to the Iranian Government.
And at this point, let me pause, because the question arises, what is
it to extend credit to the Iranian Government when the Iranian
Government issues a long-term bond?
Is it just the company that buys the bond or the financial
institution that buys the bond, or is it directly from the Iranian
Government, or is it those that provide a secondary market by buying
those bonds from the original purchaser?
Mr. FRANK of Massachusetts. Will the gentleman yield?
Mr. SHERMAN. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. I thank the gentleman for making this
point. The gentleman from California is a very careful student of the
intertwined legal and economic issues, and the point he is making now
is very important. We expect this to be subjected to a sensible
economic analysis; that is, if you are providing real value to that
government, then you are covered. Clearly, if you have a secondary
market for bonds, you've enhanced the value of the initial instrument.
So people who support a secondary market for a particular instrument
are clearly investing in the underlying issuer. They know that. It is a
conscious act. No one is going to be trapped.
So the gentleman is making a very important point, and we want to be
very clear. We will be expecting the administration, in preparing this
list, to use the same kind of economic analysis we would use in any
other case. If an activity, a purchase, an investment, a loan, any
financial activity is contributing to the financial enhancement of the
Iranian Government, then it triggers, we would believe, this bill.
Mr. SHERMAN. I thank the gentleman and agree with him completely.
This bill is designed to cause the list prepared by the administration
to include those who invest in bonds issued by the Government of Iran.
I should point out that in identifying the three activities that are
going to cause multinational corporations to be listed, that we are
paralleling what we did just last week when this Congress passed the
bill dealing with the Overseas Private Investment Corporation, which
also focused on pretty much the same standards and said those
multinational corporations engaged in those activities with the
Government of Iran would not be able to be partners of OPIC in its
activities around the world.
Now, the bill also provides that any State statute enacted prior to
the publication of the first list of firms by the administration would
be grandfathered. States do not have to wait and should not wait for
the publication of this list by the administration.
States such as Florida, Ohio and California, which are proceeding
with divestment measures, and any other States which might consider a
divestment program need not wait for the Federal list, and whatever
they choose to do will be grandfathered in this legislation.
Now, this bill states explicitly what I think was clearly true of
both the Sudan bill we just discussed and this bill, and that is it
provides a safe harbor but does not imply that that which lies outside
the safe harbor is somehow forbidden. Section 7 of this bill would make
it clear that the authorization that's been provided by this bill is
just that, a safe harbor, that this bill in no way implicitly restricts
or takes away whatever authorities the States, the pension managers and
mutual funds already have
Mr. FRANK of Massachusetts. Will the gentleman yield?
Mr. SHERMAN. I yield to the gentleman from Massachusetts (Mr. Frank).
Mr. FRANK of Massachusetts. I thank the gentleman once again for
helping clarify a point. Sometimes when we do legislation I wish we had
a clause that we could automatically print out that says ``this bill
does not do what this bill does not do,'' because people are forever
reading into legislation things that aren't there.
We have some people who have claimed that they do not now have the
legal authority to do the divestment. When this bill becomes law, as I
hope it will be, and its companion bill, that argument won't be able to
be made at all.
I agree with the gentleman from California. I don't think it's a good
argument now. But we do want to make clear, in absolutely nailing this
down, we in no way want to give any support to the argument that, in
the absence of this bill, the authority isn't there. So I thank the
gentleman for once again helping us be very clear about what we're
doing.
Mr. SHERMAN. I thank the gentleman and agree with him completely.
I believe that divestment is already clearly authorized in the terms
of the fiduciary trying to meet their fiduciary obligation. Investing
in terror is bad business for States. I don't think they have an
obligation to, in making their own investment policy, to conform to
some Federal foreign policy. But if they do, Federal foreign policy for
a long time has been very clear: don't invest in Iran. That's why we've
had the Iran-Libya Sanctions Act, now the Iran Sanctions Act for quite
some time.
So this bill will eliminate an excuse for those who do not want to,
that have not yet, divested. It will provide a safe harbor, and it will
provide guidance for those who want to use their investments to get
multinational corporations to take the actions that will be most
effective.
It provides a list of companies not to invest in, and it provides a
standard to define what particularly it is we want the business
community worldwide to desist from doing.
Ms. JACKSON-LEE of Texas. Will the gentleman yield?
Mr. SHERMAN. I'll yield to the gentlelady from Texas (Ms. Jackson-
Lee).
Ms. JACKSON-LEE of Texas. I thank the distinguished gentleman. Let me
quickly thank you for your leadership and thank the ranking member of
our Committee on Foreign Affairs, who I know is involved in this
action.
And let me applaud the approach. That's what I want to reaffirm.
Diplomatic and economic sanctions have not been used effectively
against Iran. And with the more publicized National Intelligence
Estimates that indicates that terrorism is franchising around the
world, the troubling activities of Iran with Iraq and the actions that
seem to be moving Iran toward nuclear creativity, if you will, warrants
a strong statement by the United States. And it also is warranted
because of the active middle class who wants a democratic and free
Iran.
This is a right way to go. It is a different approach from a military
strike and the representations of this administration about attacking
Iran militarily. The American people want to see us act, and I believe
that this legislation dealing with a list of those investing and giving
guidance to the economic sector is the right direction to take.
And I am also grateful that this does not preempt State law and
States that
[[Page H8858]]
have already gone further in divestment.
So I thank the gentleman for yielding, and I hope my colleagues will
support this legislation
Mr. SHERMAN. Mr. Speaker, I reserve the balance of my time.
Mr. GARRETT of New Jersey. Mr. Speaker, I also thank again the
distinguished chairman of the committee for bringing this important
legislation to the floor. I yield myself such time as I may consume.
I rise today in support of H.R. 2347, the Iran Sanctions Enabling
Act. The radical hard-line Islamic leadership of Iran presents one of
the most serious threats today to peace and stability throughout the
world. First, their quest to acquire nuclear weapons technology, when
you combine that with comments by the Iranian President such that the
Nation of Israel should be ``wiped off the map,'' make it clear that
the Iranian leadership is unpredictable and dangerous.
The Iranian President has gone even farther by speculating that the
collateral damage of attacking Israel with nuclear weapons would be
worth the cost to the Muslim world. So for a regime that is developing
nuclear capabilities, these are truly extraordinary words, and the
world must take notice.
The Iranian President and the Ayatollah's supreme wish is the
destruction of Israel and all of her people. They have not tried to
mask their goal. They doubt that the Holocaust ever occurred in the
past, and now they're making plans for the Holocaust of the future. And
there is no doubt about it. Their fresh Holocaust will stretch far
beyond the borders of Israel. They will encompass all whom they
consider a threat to their values and to their plans. So to confront
Iran now is not only in the national interest, it is also in our
interest because the U.S. will surely sometime be a target itself.
There is much talk at the U.N. about preventing wars and genocide,
but, unfortunately, there is so too little action. The world should not
ignore these words now of aggression. Because of the lack of success
the U.N. has had in keeping the nuclear technology out of the hands of
these radicals, the United States must now take the appropriate
measures and work directly with all of our allies to do everything in
our power to prevent Iran from obtaining those weapons.
And so that is why I'm here today. I am pleased with H.R. 2347, for
this act will do several important measures. First, as indicated, it
permits, permits, not mandates, the divestiture from companies with
investments of $20 million or more in Iran's energy sector.
Secondly, it directs the Federal Government to produce a list of such
companies that qualify for such investment.
Thirdly, it authorizes State governments, local governments and
public educational institutions to divest even their pension fund
assets from companies on that list.
Fourthly, it permits private investment and pension plan managers to
divest from companies listed, as the chairman states, without breaching
their fiduciary responsibilities.
As the committee report herein notes, companies based in the U.S. are
already barred from doing business with Iran. But these trade
investment sanctions do not extend to foreign companies which operate
legally. Foreign persons that invested in Iran's energy sector, despite
Iran's support of international terrorism and its nuclear program, have
provided additional financial means for Iran's activities in these
areas, and many United States persons have unknowingly invested in
those same persons.
So Mr. Speaker, in conclusion, it is my hope that by allowing U.S.
companies to divest their financial interests from any foreign-owned
companies doing business with Iran, we will continue to put that
pressure on that radical Iranian leadership to end their stated goals
of acquiring nuclear weapons and encourage other countries to bolster
their trade and economic restrictions on Iran as well.
So I urge my colleagues to support this small but very important step
in reining in this extremist regime.
Mr. Speaker, I reserve the balance of my time.
Mr. SHERMAN. I yield 1 minute to the gentleman from Massachusetts
(Mr. Frank).
Mr. FRANK of Massachusetts. Mr. Speaker, again, I want to thank the
bipartisan leadership and staff of both committees, because the Foreign
Affairs Committee, under the leadership of the gentleman from
California and the gentlewoman from Florida, have worked on this.
I, in my remarks on the Darfur bill, really spoke about both bills.
Let me just reiterate, this is a chance for us to make very clear the
overwhelming opposition, staunch opposition of the American people to
the nuclear weapons plans of the regime in Iran and other aspects of
that regime.
And I hope that we will, I'm told it will be tomorrow, have two
overwhelming rollcalls in this House which will be, in themselves, an
expression of the American people's views on both the genocide in
Darfur and the nuclearization of the Iranian military, and that will
then be followed by a widespread demonstration across this country of
people's determination as Americans that we will do what we can to stop
both of those. So I think this is a very good day for the bipartisan
legislative process
I submit the following correspondence.
Committee on Education and Labor,
Washington, DC, July 27, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing to confirm our mutual
understanding with respect to the consideration of H.R. 2347,
the Darfur Accountability and Divestment Act.
As you know, Section 7 of H.R. 2347 amends the Employee
Retirement Income Security Act of 1974 to provide a safe
harbor for changes of investment policies. I am writing to
confirm that this provision falls within the jurisdiction of
the Committee on Education and Labor.
Given the importance of moving this bill forward promptly,
I do not intend to object to its consideration in the House.
However, I do so only with the understanding that this
procedure should not be construed to prejudice my Committee's
jurisdictional interest and prerogative in H.R. 2347 or any
other similar legislation and will not be considered as
precedent for consideration of matters of jurisdictional
interest to my Committee in the future. The Committee also
asks that you support our request to be conferees on the
provisions over which we have jurisdiction during any House-
Senate conference.
Sincerely,
George Miller,
Chairman.
____
Committee on Financial Services
Washington, DC, July 27, 2007.
Hon. George Miller,
Chairman, Committee on Education and Labor
Washington, DC.
Dear Chairman Miller: Thank you for your recent letter
regarding the consideration of H.R. 2347, the Iran Sanctions
Enabling Act of 2007. I agree that the amendment to the
Employee Retirement Income Security Act of 1974 to provide a
safe harbor for changes of investment policies falls within
the jurisdiction of the Committee on Education and Labor.
I appreciate your willingness to allow this bill to move
forward today; and I agree that this procedure in no way
diminishes or alters the jurisdictional interest of the
Committee on Education and Labor.
Sincerely,
Barney Frank,
Chairman.
______
Congress of the United States, Committee on Oversight and
Government Reform,
Washington, DC, July 27, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
Washington, DC.
Dear Chairman Frank: I am writing to confirm our mutual
understanding with respect to the consideration of H.R. 2347,
the Iran Sanctions Enabling Act of 2007.
As you know, on May 23, 2007, the Committee on Financial
Services ordered H.R. 2347 reported to the House. The
Committee on Oversight and Government Reform (Oversight
Committee) appreciates your effort to consult regarding those
provisions of H.R. 2347 that fall within the Oversight
Committee's jurisdiction, including matters related to the
federal workforce.
In the interest of expediting consideration of H.R. 2347,
the Oversight Committee will not separately consider this
legislation. The Oversight Committee does so, however, with
the understanding that this does not prejudice the Oversight
Committee's jurisdictional interests and prerogatives
regarding this bill or similar legislation.
I respectfully request your support for the appointment of
outside conferees from the Oversight Committee should H.R.
2347 or a similar Senate bill be considered in conference
with the Senate. I also request that you include our exchange
of letters on this matter in the Financial Services Committee
Report on H.R. 2347 or in the Congressional Record during
consideration of this legislation on the House floor.
[[Page H8859]]
Thank you for your attention to these matters.
Sincerely,
Henry A. Waxman,
Chairman.
____
Committee on Financial Services,
Washington, DC, July 27, 2007.
Hon. Henry Waxman,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
Dear Chairman Waxman: Thank you for your letter concerning
H.R. 2347, the ``Iran Sanctions Enabling Act,'' which the
Committee on Financial Services has ordered reported. The
bill was also referred to the Committee on Oversight and
Government Reform. This legislation will be considered by the
House shortly.
I want to confirm our mutual understanding with respect to
the consideration of this bill, I am pleased that our
committees have reached an agreement regarding matters within
the jurisdiction of the Oversight Committee, specifically
those involving the federal workforce. I appreciate your
cooperation in moving the bill to the House floor
expeditiously. I further agree that your decision to not to
proceed on this bill will not prejudice the Committee on
Oversight and Government Reform with respect to its
prerogatives on this or similar legislation. I would support
your request for conferees in the event of a House-Senate
conference.
I will include this exchange of correspondence in the
Committee report and in the Congressional Record during the
consideration of the bill. Thank you again for your
assistance.
Barney Frank,
Chairman.
Mr. GARRETT of New Jersey. I now yield such time as she may consume
to the gentlelady from Florida (Ms. Ros-Lehtinen).
Ms. ROS-LEHTINEN. Mr. Speaker, I also rise in support of the bill
before us, H.R. 2347, the Iran Sanctions Enabling Act, introduced by
the distinguished chairman of the Financial Services Committee, Mr.
Barney Frank of Massachusetts.
And I'm proud to cosponsor this bill, Mr. Speaker, because it's based
on language that I drafted, and was adopted by the House last
Congresses past as part of the Iran Freedom Support Act.
As all of us have heard from the great discussions this morning,
Iran's rogue regime has sworn to destroy us, has sworn to destroy
Israel, and has throughout decades. It's demonstrated the will and the
capacity to do so. It has a long record of pursuing nuclear
capabilities and of supporting the extreme elements of Islam, including
Hamas, Hezbollah and those who kill and maim Americans in Iraq.
In fact, some have reported that Iran is providing the deep-buried
IEDs that are indeed increasing the carnage in Iraq.
No amount of handholding, no amount of dialogue will be able to deter
Tehran.
As part of an effort to prevent foreign funds from going to the
Iranian regime, the bill before us authorizes State and local
governments to direct divestiture and prevent investment in companies
with investment of $20 million or more in Iran's energy sector.
And furthermore, the bill requires that a list of those companies
that have invested $20 million or more be published biannually.
Furthermore, it protects investment companies and managers from being
sued for divesting from companies included in the published list.
And although I fully support this bill, Mr. Speaker, and I commend
Chairman Frank for his efforts on this critical issue, as well as Mr.
Sherman, who's been a leader on all the bills related to Iran, I'm
concerned that this bill merely authorizes divestment from companies
investing in Iran, rather than making divestment from those companies
mandatory.
{time} 1345
H.R. 1357, a bill I introduced earlier this year, along with Minority
Whip Roy Blunt, would require divestment of all government pension
plans or Thrift Savings Plans. Moreover, H.R. 1357 prohibits all future
investments of government and private pension plans.
I strongly believe that we must increase the pressure aimed at
isolating Iran's extremist regime, and the bill authored by Chairman
Frank is an important step toward achieving this goal, and I commend
him for it.
There are currently, also, Mr. Speaker, multiple measures dealing
with putting further pressure on Iran including the Iran Counter-
Proliferation Act, authored by Congressman Tom Lantos, the chairman of
our Foreign Affairs Committee; and we have got to work to have those
bills passed and build upon them in order to derail the dangerous
ambitions of Iran.
So I urge my colleagues to support this measure. It is part of the
effort of many of us to prevent U.S. dollars from enabling and
facilitating the murderous efforts of radical extremists who intend to
destroy us and our allies.
I thank the gentleman from New Jersey for yielding me the time, and I
thank the chairman, Mr. Frank of Massachusetts, for this bill.
Mr. SHERMAN. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
Mr. GARRETT of New Jersey. Mr. Speaker, I yield such time as he may
consume to the gentleman from Connecticut (Mr. Shays)
Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding and for
his work on this legislation and the ranking member of the Foreign
Affairs Committee for her work, and, clearly, Chairman Barney Frank and
Tom Lantos.
I rise in strong support of H.R. 2347 and am grateful to have worked
on this legislation with Congressman Tom Lantos and Barney Frank as the
chief Republican sponsor.
This legislation will require the U.S. Government to publish a list
of companies with investments of more than $20 million in Iran's energy
sector and will authorize State and local governments to divest the
assets of their pension funds and other funds under their control from
any company on the list.
In addition, H.R. 2347 provides safe harbor from litigation by
shareholders for pension fund managers, managers of mutual funds, and
corporate pension funds who divest from companies on this list.
When Americans invest, it seems to me they want to know their dollars
are not going to prop up the regime in Tehran, a sponsor of terrorism
and an avowed enemy of American interests. By allowing State pension
funds and mutual funds to more easily divest from energy companies
doing business in Iran, this legislation will give investors more
choice in directing their investments.
Because I believe military action against Iran, while not off the
table, must be an absolute last resort, it is critical our government
utilize the tools at our disposal including economic sanctions and a
divestment campaign to deter the threat Iran poses to global security.
Iran is pursuing nuclear capabilities and is one of the world's most
egregious exporters of terrorism. The seriousness of these facts was
made clear when Iran's President threatened to ``wipe Israel off the
map.''
In addition, last April Ayatollah Khamenei told another of the
world's worst human rights abusers, Sudan, that Iran would gladly
transfer nuclear technology. He stated: ``The Islamic Republic of Iran
is prepared to transfer the experience, knowledge, and technology of
its scientists.''
The bottom line is, in defiance of its assurances to the contrary,
Iran remains committed to a nuclear weapons program. The United States
must be unequivocal in its rejection of these ambitions and the
financial support they require
Mr. SHERMAN. Mr. Speaker, I ask unanimous consent to reclaim my time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
Mr. SHERMAN. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Texas (Ms. Jackson-Lee)
Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the distinguished
gentleman for yielding.
And I again want to emphasize that we are taking a monumental step
forward in getting America's foreign policy on record opposing the
actions in Iran. I would say almost irresponsible actions by the
government.
I wanted to rise and thank Chairman Frank and Mr. Sherman, whose
leadership on both the Financial Services Committee and Foreign Affairs
Committee is well evident, this commitment to a free and democratic
Iran.
But I speak to the Iranian community here in the United States, who,
every day that I see them in my own community, want this peaceful and
democratic Iran. We have to join with
[[Page H8860]]
them, and I think these sanctions raise the ante on the economic
divestiture and also the opportunity for diplomacy
Mr. Speaker, I rise today in strong support of H.R. 2347, the Iran
Sanctions Enabling Act of 2007. I would like to thank my colleague,
Chairman Franks, for introducing this important legislation, as well as
for his leadership on the Financial Services Committee.
According to the Administration's ``National Security Strategy''
document released on March 16, 2006, the United States ``may face no
greater challenge from a single country than Iran.'' I find Iran's
support of terrorist organizations, pursuit of nuclear weapons, and
dismal human rights record to be extremely worrisome. I have long been
an advocate of a free, independent, and democratic Iran. I believe in
an Iran that holds free elections, follows the rule of law, and is home
to a vibrant civil society; an Iran that is a responsible member of the
community, particularly with respect to the proliferation of nuclear
weapons. An Iran that, unfortunately, we do not see today.
This legislation is a very important step because it uses diplomacy
and economic tools effectively. We must not move to join the
representation of the Bush Administration to begin another non-declared
war. The President should work diplomatically and economically without
provoking war or an offensive attack without the constitutional
authority.
Mr. Speaker, this bipartisan bill authorizes state and local
governments, as well as educational institutions, to divest from
companies which invest in Iran's energy sector. Because estimates
indicate that these companies account for 80 percent of Iran's hard
currency, they directly allow Iran to fund its illicit nuclear weapons
program.
The Iran Sanctions Enabling Act of 2007 directs the Secretary of the
Treasury to publish biannually in the Federal Register a list of each
person, whether within or outside of the United States, that has an
investment of more than $20 million in the energy sector in Iran and to
maintain on the Web site of the Department of the Treasury the names of
the persons on such list. It shields any registered investment company
from civil, criminal, or administrative action based upon its divesting
from, or avoiding investing in, securities issued by companies included
on such most recent list.
Additionally, this legislation expresses the sense of Congress that
the Federal Retirement Thrift Investment Board should initiate efforts
to provide a terror-free international investment option among the
funds of the Thrift Savings Fund. Federal employees should have the
opportunity to prevent their retirement savings from being invested in
companies that support terrorism.
Mr. Speaker, Iran cannot be permitted to develop nuclear bombs.
Although most experts believe that Iran is at least several years away
from developing a nuclear weapon, the fact that Iran has begun the
process is a very clear and disturbing signal. The United States must
recognize that it is dangerous to do nothing. But it is equally
dangerous to take actions that are rash, unwise, or ineffective.
We have ignored the inflammatory rhetoric of President Mahmoud
Ahmadinejad. But we cannot ignore Iran's breaking of the U.N. seals on
its uranium-enriching facilities in January. The U.S. government
immediately understood the severity of the situation. This is not just
a minor diplomatic nuisance--this is a serious security threat. The
safety of the Iranian people, the safety of the Middle East, and even
our own security is at risk. I firmly believe that we must utilize
multilateral diplomatic channels to persuade Iran that it is not in its
best interest to pursue nuclear weapons programs. I strongly support
economic and diplomatic efforts to reign in Tehran, and I believe that
we can work to resolve this crisis without resorting to the use of
force.
I strongly support this important legislation, and I urge my
colleagues to do the same.
Let me just add, in my final comments, my support for H.R. 180, and I
thank Congresswoman Barbara Lee and Chairman Frank for raising to the
level of prominence the importance of divestiture in Sudan. There is
not one day when we are not accounting for the numbers who die, the
numbers who are suffering in Chad, and I want to rise to thank my
State, the State of Texas, for being one of those States that has
approved legislation that has divested our State funds from Sudan.
As I close, let me say as Secretary Paulson makes his way to China, I
am hoping that he will have on his agenda the divestiture by China out
of Iran and out of Sudan. It is, I believe, an international
embarrassment but, more importantly, lives are being lost. And I think
it is an important diplomatic, if you will, crisis that China continues
to support Sudan through its energy purchases. I hope that is a
discussion, and I ask my colleagues to support both bills
Mr. GARRETT of New Jersey. Mr. Speaker, I commend the gentleman and
gentlewoman on the other side of the aisle for their efforts on this
legislation
Mr. HOYER. Mr. Speaker, I strongly support this legislation, the Iran
Sanctions Enabling Act of 2007 (H.R. 2347), which would authorize state
and local governments to direct divestiture from and prevent investment
in entities with investments of $20 million or more in Iran's energy
sector.
As Iran continues to pursue its nuclear agenda--in defiance of UN
sanctions and international pressure--the United States must leverage
not only its diplomatic resources but its economic influence when it
comes to Iran. Simply put, we must act aggressively to ensure that we
are not providing Iran with money to develop nuclear weapons.
This legislation will help us do that.
Among other things, this bill would require the publication of
entities, both inside and outside the United States, that have an
investment of more than $20 million in Iran's energy sector. Any entity
designated on this list could delay publication of its name if it
demonstrates that it is taking steps to divest from Iran.
Furthermore, the bill provides a safe harbor for investment and
pension fund managers from lawsuits alleging that divestment would
lower a fund's profits.
Mr. Speaker, Iran's support for terrorist groups such as Hezbollah is
well known and it is listed as a state sponsor of terrorism by our
State Department.
In addition, the President of Iran, Mahmoud Ahmadinejad, has made
repeated outrageous statements toward the United States and our ally,
Israel, even calling in October 2005 for Israel to be ``wiped off the
map.''
Given Iran's continued hostility and defiance of the international
community, it is imperative that we use all the tools in our national
security arsenal to attempt to change Iran's behavior. And, state-level
divestment campaigns are an essential way for state officials to
prevent retirement funds from helping Iran pursue nuclear weapons and
fund terrorism.
Although U.S. companies have been barred from directly investing in
Iran since 1996, there are investment avenues not covered by those
restrictions. This bill would close some of the loopholes in previous
legislation and executive orders by prohibiting public pension funds
from investing in foreign companies that do more than $20 million in
business in Iran's oil and gas sector.
Iran is already struggling with domestic instability, gas rationing
and falling foreign investment. This legislation provides a useful
diplomatic and economic tool to further push Iran toward complying with
international pressure, both to stop its nuclear activities and to
cease its sponsorship of terrorist groups.
I urge my colleagues to support this bill.
Mr. LANTOS. Mr. Speaker, I commend the Chairman of the Financial
Services Committee, my good friend Congressman Barney Frank of
Massachusetts, for authoring this critical piece of legislation, of
which I am proud to be a principal cosponsor. This bill, H.R. 2347 the
Iran Sanctions Enabling Act of 2007, is a critical element in a network
of efforts intended to prevent the realization of a nightmare, a
nuclear-armed Iran.
Several of us in this body have been working ceaselessly to achieve--
by peaceful means--an end to Iran's quest for nuclear status. We have
produced several pieces of legislation to achieve that end. The goal of
all of this legislation is to deprive Iran, insofar as possible, of the
benefit of its cash-cow, oil sales. And the means of doing this is to
deter foreign investment in Iran's energy industry.
Mr. Speaker, the primary purpose of this bill, H.R. 2347, is to allow
state and local governments to contribute to this effort by divesting
their pension plans of any foreign entity that invests in Iran. This
legislation does not require them to divest, but it would certainly
seem to be a wise course for them to choose, since foreign entities
that invest in Iran's energy industry are subject to U.S. sanctions and
therefore liable to lose a significant part of whatever their prior
value may have been.
Iran's bid for nuclear arms is the challenge of our age. Iran already
seeks to dominate the Middle East through intimidation, including
sponsorship of terrorist groups like Hezbollah and Hamas. If it
achieves nuclear status, Tehran will greatly enlarge its sway in this
volatile region and will likely touch off a regional nuclear arms race
as well. Worse, at least one of Iran's leading political figures has
intimated that Iran would be willing to use those arms to advance its
well-known, reprehensible aims, and there is good reason to believe
that other Iranian leaders subscribe to the same view.
H.R. 2347 helps to fortify the barrier we are trying to erect to
deter all foreign investment in Iran's energy sector and therefore
deprive Iran's theocratic regime of the funds it needs to pay for its
horrific nuclear goals.
[[Page H8861]]
Mr. Speaker, I strongly support this legislation, and I urge all my
colleagues to do likewise.
Mr. PAUL. Mr. Speaker, I strongly oppose any move to initiate further
sanctions on Iran. Sanctions are acts of war, and expanding sanctions
on Iran serves no purpose other than preparing the American people for
an eventual attack on Iran. This is the same pattern we saw in the run
up to the war on Iraq: Congress passes legislation calling for regime
change, sanctions are imposed, and eventually we are told that only an
attack will solve the problem. We should expect the same tragic result
if we continue down this path. I urge my colleagues to reconsider.
I oppose economic sanctions for two very simple reasons. First, they
don't work as effective foreign policy. Time after time, from Cuba to
China to Iraq, we have failed to unseat despotic leaders or change
their policies by refusing to trade with the people of those nations.
If anything, the anti-American sentiment aroused by sanctions often
strengthens the popularity of such leaders, who use America as a
convenient scapegoat to divert attention from their own tyranny.
History clearly shows that free and open trade does far more to
liberalize oppressive governments than trade wars. Economic freedom and
political freedom are inextricably linked--when people get a taste of
goods and information from abroad, they are less likely to tolerate a
closed society at home. So sanctions mostly harm innocent citizens and
do nothing to displace the governments we claim as enemies.
Second, sanctions simply hurt American industries, particularly
agriculture. Every market we close to our nation's farmers is a market
exploited by foreign farmers. China, Russia, the Middle East, North
Korea, and Cuba all represent huge markets for our farm products, yet
many in Congress favor current or proposed trade restrictions that
prevent our farmers from selling to the billions of people in these
areas.
We must keep in mind that Iran has still not been found in violation
of the Non-Proliferation Treaty. Furthermore, much of the information
regarding Iran's nuclear program is coming to us via thoroughly
discredited sources like the MeK, a fanatical cult that is on our State
Department's terror list. Additionally, the same discredited neo-
conservatives who pushed us into the Iraq war are making similarly
exaggerated claims against Iran. How often do these ``experts'' have to
be proven wrong before we start to question their credibility?
It is said that we non-interventionists are somehow ``isolationists''
because we don't want to interfere in the affairs of foreign nations.
But the real isolationists are those who demand that we isolate certain
peoples overseas because we disagree with the policies of their
leaders. The best way to avoid war, to promote American values, and to
spread real freedom and liberty is to engage in trade and contacts with
the rest of the world as broadly as possible.
I urge my colleagues to reconsider this counterproductive and
dangerous move toward further sanctions on Iran.
Mr. GARRETT of New Jersey. Mr. Speaker, I have no further requests
for time, and I yield back the balance of my time.
Mr. SHERMAN. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from California (Mr. Sherman) that the House suspend the
rules and pass the bill, H.R. 2347, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. SHERMAN. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________