Legislation: In 2009, Indiana passed House Bill 1547, a law requiring the Public Employees’ Retirement Fund and the State Teachers’ Retirement Fund to scrutinize their holdings in companies that do business with state sponsors of terror. The law requires the trusts to request that scrutinized companies cease their activities and to divest from companies that do not comply (1). In 2012, Indiana passed Senate Bill 0231, a law prohibiting state agencies from contracting with companies that invest in Iran. The law requires the creation and maintenance of a list of prohibited companies (2).
Effect: PERF and TRF undertook divestment beginning in 2010, selling $22.8 million in holdings with $70 million to be divested thereafter. In 2012, it was reported that the Indiana Public Retirement System would divest holdings in four companies by 2016 and in 12 other companies by 2017 (3).
Key Actors: HB 1547 was prepared by the Pension Management Oversight Commission and introduced by David Niezgodski (D-South Bend) and Douglas Gutwein (R-District 16). Governor Mitch Daniels signed the bill into law. In a 2008 meeting of the Pension Management Oversight Commission, of which Niezgodski is Chairperson, Christopher Holton of the Center for Security Policy advocated that Indiana adopt a divestment policy targeting assets linked to state sponsors of terrorism. The Center for Security Policy has been involved in divestment efforts in several other states (4). SB 0231 was introduced by State Senator Thomas Wyss and signed into law by Governor Mitch Daniels. David Ibsen, Executive Director of United Against Nuclear Iran, testified in support of the bill (5). In 2015, Representative Susan Brooks (R-IN) requested in a letter that the Secretary of State clarify the impact of the Joint Comprehensive Plan of Action on state sanctions. The letter, co-signed by 61 other Representatives, asks several questions, namely whether or not the federal government will take action against states that maintain sanctions and whether or not state sanctions against Iran interfere with federal power (6).
Of note: In 2010, TRF executive Timothy Walsh sent letters to several firms with scrutinized operations, of note Henkel AG, eni S.p.A., Royal Dutch Shell PLC. eni replied that it carried out pre-2001 contracts only, noting that abandonment of existing projects would result in untenable losses and endanger shareholders. eni argued, moreover, that its activities in no way supported terrorism. Similarly, Henkel replied that its operations in Iran supported neither terrorism nor the Iranian energy or military industry. Shell replied that its energy activities were both inevitable given the richness of Iranian hydrocarbon resources and in compliance with US and European regulations. Henkel and eni were removed from the Scrutinized List; TRF divested nearly half of its holdings in Shell, valued at nearly $6 million (7).