[Congressional Record (Bound Edition), Volume 153 (2007), Part 15]
[Senate]
[Pages 20994-20995]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            IRAN DIVESTMENT

 Mr. OBAMA. Mr. President, I want to bring to the attention of 
the Senate an important article that appeared in today's Baltimore Sun. 
It describes the progress States are making in passing laws that divest 
their pension funds of companies that invest heavily in Iran's oil and 
gas industry. As highlighted in the article, Florida enacted a 
significant law along these lines, and other States, including my State 
of Illinois, are on the verge of doing so.
  The need for these laws is clear. Iran uses the revenue it generates 
from its energy sector to finance its pursuit of nuclear weapons and 
support for terrorist groups like Hezbollah and Hamas. Along with a 
sustained diplomatic effort and toughened multilateral sanctions on 
Iran, divestment is a useful tool that State and local governments can 
use to increase economic pressure to persuade Iran to end its dangerous 
policies.
  But, as the article points out, past Supreme Court decisions have 
called into question whether States have the constitutional authority 
to pass such laws. For that reason, Congress needs to pass the Iran 
Sanctions Enabling Act, S. 1430, which I introduced in May. This bill 
would clarify that States have the authority to pass divestment 
legislation with respect to Iran, and it would provide information from 
the Federal Government to make it easier for them to do so. I am proud 
that 14 of my colleagues have cosponsored this bill so far, but Iran's 
seemingly unbridled drive for nuclear weapons makes this a matter of 
considerable urgency. I urge the rest of my colleagues to join us in 
working to pass this legislation without delay.
  I ask unanimous consent that the article in today's Baltimore Sun be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                 [From baltimoresun.com, July 26, 2007]

                      Let States Divest From Iran

                (By Jonathan Schanzer and Howard Slugh)

       Last month, Florida Gov. Charlie Crist signed a bill 
     ordering his state to divest its pension fund from businesses 
     that work with Iran's energy sector. The legislation, led by 
     Adam Hasner, Republican majority leader of Florida's House of 
     Representatives, passed unanimously in both chambers of the 
     Legislature.
       Unfortunately, the state legislation is unconstitutional. 
     Only new federal legislation can legally allow states to 
     divest from Iran.
       In 1996, Massachusetts restricted state businesses from 
     working with companies that dealt with Myanmar, formerly 
     called Burma. Massachusetts sought to press Myanmar's 
     military junta to take steps toward democracy and provide 
     better treatment for dissidents. In 2000, the Supreme Court 
     unanimously struck down the Massachusetts law in Crosby v. 
     National Foreign Trade Council.
       The problem was that the state legislation conflicted with 
     a federal statute that enabled the president to impose 
     sanctions on Myanmar. The court argued that the president 
     ``has less to offer and less economic and diplomatic leverage 
     as a consequence'' of the Massachusetts law. According to the 
     Constitution's supremacy clause, federal sanctions must trump 
     state law.
       Florida's sanctions against Iran could face a similar fate. 
     Under federal law, only Congress and the president can 
     implement federal tools--such as the Iran Freedom Support 
     Act--to deter Iran from nuclear proliferation and terrorism. 
     As in the Myanmar case, the Florida divestment plan conflicts 
     with federal sanctions.
       Florida has attempted to distinguish its statute from 
     Massachusetts' by adding wording claiming that the law aims 
     to lower fiduciary risk, not create an alternate foreign 
     policy. But just because a state claims its law doesn't 
     conflict with federal law doesn't

[[Page 20995]]

     make it so. The Florida law could be struck down if 
     challenged--unless Congress does the right thing.
       The House and Senate are considering the Iran Sanctions 
     Enabling Act to authorize states to pass divestment laws 
     aimed at Iran's energy sector. The bill would cure any 
     constitutional conflict. It would integrate the state 
     sanctions as an element of congressional sanctions, rather 
     than leaving them outside the congressional framework.
       Broad bipartisan support of this bill is a sign that 
     Congress sees sanctions--on both the state and federal levels 
     as an important tool to weaken Iran. It also shows that 
     Congress understands that divestment is a tool that Americans 
     broadly support. Indeed, the growing ``terror-free 
     investing'' movement is gaining traction nationwide. It 
     echoes grass-roots efforts to divest from South Africa in the 
     1980s, which eventually brought the apartheid regime to its 
     knees.
       Despite the bill's wide popularity, some in Washington 
     oppose it. William Reinsch, former commerce undersecretary in 
     the Clinton administration and current president of the 
     National Foreign Trade Council, claims that ``a unified U.S. 
     foreign policy--not multiple state sanctions or divestment 
     laws--is best suited to address'' the Iran challenge. Those 
     who join Mr. Reinsch in opposing the bill claim that 
     divestment would create economic tensions with our allies, 
     making it more difficult to act multilaterally.
       Opponents of the bill fail to understand that the lack of 
     enforcement of federal sanctions in the past is exactly why 
     the American people have taken matters into their own hands. 
     They have lobbied their state legislatures because they want 
     to punish Iran. They do not care whether their states offend 
     our allies who continue to do business with Iran.
       A handful of states are considering their own divestment 
     bills, including Maryland, where Del. Ron George, an Anne 
     Arundel County Republican, has proposed legislation that 
     would bar the state pension fund from investing in companies 
     tied to Iran. Other states are weighing different divestment 
     options. In Ohio, state Rep. Josh Mandel reports that he and 
     his colleagues led an effort for ``state pension funds to 
     divest the retirement dollars of policemen, firefighters and 
     teachers from an Iranian regime that is calling for the 
     destruction of America and Israel.''
       The House and Senate have deliberated over the Iran 
     Sanctions Enabling Act since May. It is imperative that 
     Congress pass the bill quickly, to ensure that these state 
     efforts are constitutional.
       This is an effective way to push Iran to cease developing 
     nuclear weapons and to encumber its efforts to support 
     terrorism.
  (At the request of Mr. Reid, the following statement was ordered to 
be printed in the Record.)

                          ____________________