Iran disinvestment bill

Buckeye State Blog has a silly post up lambasting two Republican Ohio representatives who are sponsoring a state bill (HB 151) that will forbid Ohio from investing public money in companies that do business with Iran. The problem with the two is that they own stock in GE. Yes, it’s shocking.

From the Houston Chronicle story Jerid links to:

Both sponsors of a bill that would pull Ohio’s largest investment funds out of Iran hold stock in General Electric Co., whose business ties to the sanctioned nation have came under scrutiny.

What was that scrutiny? Here’s 60 Minutes back in 2004:

In fact, U.S. law does ban virtually all commerce with the rogue nations, but there’s a loophole that G.E., Conoco-Phillips and Halliburton have exploited: The law does not apply to any foreign or offshore subsidiary so long as it is run by non-Americans.

“These three companies, as far as we were concerned, appear to have violated the spirit of the law,” says [William Thompson, New York City comptroller]. “In the case of Halliburton, as an example, they have an offshore subsidiary in the Cayman Islands. That subsidiary is doing business with Iran.”

That’s not so good. Here’s USA Today in 2005:

“Because of uncertain conditions related to Iran, including concerns about meeting future customer commitments, we will not accept any new orders for business in Iran effective Feb. 1, [2005]” said Gary Sheffer, a GE spokesman. “This moratorium on new orders will be re-evaluated as conditions relating to Iran change.”

The move by the world’s largest company by market value comes just days after another conglomerate, Halliburton Co., announced it will wind down its operations in Iran.

OK. Back to the Chronicle:

State Reps. Shannon Jones and Josh Mandel, both freshman Republicans, reported owning GE stock on state financial disclosure forms last year _ and both said Monday they still hold the shares. Neither said how much they own and didn’t know about GE’s operations in Iran until after they bought the stock.

“What you’re calling about is the crux of the issue,” said Mandel, an Iraq Marine veteran from Lyndhurst. “Until large institutional investors take leadership in this arena, there are not going to be very many opportunities for Joe Citizen to invest terror-free.”

Emphasis mine. Jerid responds:

Is that so Josh? I suppose dropping your GE investments would be “terror-free”, no?

No, Jerid, it would not. As I sit here typing this, I have no idea if I own GE or Halliburton stock or not. There are these things called 401k’s and mutual funds in which “institutional investors”- see that’s where they come in- invest in a wide variety of stocks on behalf of investors, many of whom don’t monitor them. The state government is one of these investors and the law would force the state to monitor and disinvest. Half of Americans own stock this way- state investors can do a lot to change the institutional investors’ behavior.

This effort is bipartisan, so I guess this is a pure Gotcha! move by Jerid.

It’s wickedly delightful watching them squirm.

Imagination is a wonderful thing.