Legislation: In 2007, Illinois enacted Senate Bill 1621, a law amending both the Illinois Procurement Code and the Illinois Pension Code. The law requires any company submitting a bid or proposal for a state contract to disclose whether or not it had any business dealings with the Government of Iran. Such dealings do not preclude a company from winning a contract; however, the state may take such activity into consideration when awarding a contract. Moreover, SB 1621 requires the managers of state retirement funds (the State Employees’ Retirement System, the Judges Retirement System, the General Assembly Retirement System, the State Universities Retirement System and the Teacher’s Retirement System) to scrutinize their holdings in companies that are active in Iran. The funds must contact those companies and request that they clarify or cease their operations. Companies that continue operations become subject to divestment by the funds. SB 1621 also requires the retirement funds to maintain a list of scrutinized companies and to report annually on divestment action. The law will expire if the United States revokes all sanctions, if the federal government declares Iran not to be a state sponsor of terror, or if the federal government declares that state sanctions infringe on federal power (1). In 2015, Illinois updated its Iran divestment and contracting policies with the enactment of State Bill 1761, a law that places in a prohibited category businesses that boycott Israel, have operations in Iran, and have operations in Sudan. The law establishes the Illinois Investment Policy Board, which will scrutinize companies and will act as a liaison between scrutinized companies and the state retirement system (2).
Effect: The Illinois State Board of Investment provided a comprehensive report in 2015 on its scrutinization and divestment activity since the initial enactment of legislation in 2007. In total, the retirement system has divested approximately $30 million in holdings (3).
Key Actors: The Jewish Community Relations Council supported the enactment of divestment legislation in 2007. State Senator Jeff Schoenberg and State Representative Lou Lang, who sponsored SB 1621, participated in a 2007 conference about Iran organized by the JCRC (4). State Senator Ira Silverstein (D) and State Representative Sara Feigenholtz (D) sponsored SB 1761, which passed without opposition (5).
Of note: Interviewed in August of 2015, Illinois Governor Bruce Rauner reiterated his commitment to preventing state pension funds from investing in companies that do business with Iran (6). Other state legislators have also expressed their opposition to lifting sanctions, citing concerns about Iran’s nuclear program and sponsorship of terrorism. The Illinois State Board of Investment contacted three potential resources for the purpose of scrutinization, the Florida State Board of Administration, the American Israel Public Affairs Committee, and Risk Metrics Group. The Board retained RMG until 2010, when RMG was acquired by MSCI, and in 2014 the Board voted to retain IW Financial (7).