Contracting legislation: The New York legislature enacted the Iran Divestment Act in 2012, prohibiting the state from entering into contracts with businesses interacting with Iran’s energy sector, and financial institutions extending credit to those businesses. (1) Thirty-three companies are earmarked by the legislation to be sanctioned. (2) The bill was amended later in the year to include more state entities, including the State University of New York, City University of New York, and other state and local public authorities. (3) A second amendment in 2013 rendered the investments of domestic insurers in such companies “nonadmitted assets.” (4)
Divestment legislation: A2978 is currently moving through the New York legislature. The bill provides for complete divestment of all state pension fund assets from companies doing business in or with Iran. (5) A2978 contains some of the strongest language of any state legislation. Section 8 reads, “It is is unconscionable for this state to invest in foreign companies with business activities benefiting foreign states such as Iran that commit egregious violations of human rights and sponsor terrorism.” The bill was referred to the Assembly Governmental Employees Committee on January 6.
Key actor: Assemblyman Michael J. Fitzpatrick (R-Smithtown) is the sponsor of A2978.
Effect: New York’s first state action against the government of Iran was the 2008 divestment of $86.2 million of the state’s pension fund from nine oil companies doing business there. (6) The action was taken by the State Comptroller on the heels of a “risk mitigation program,” a comprehensive audit of companies identified as doing “substantial business” with Iran.
Key actor: State Comptroller Thomas P. DiNapoli.
Of note: Two Republican lawmakers, Rep. Robert Ortt of Tonawanda and Rep. Tom Croci of Suffolk County, recently authored a letter to DiNapoli urging the continuation of divestment and referring to Iran as a “terrorist state.” (7)