STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - May 17, 2007)
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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.
T his bill will enable citizens, institutional investors, and St ate 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.
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.