Legislation: Act 44, passed in 2009, provided for the divestment of state pension funds from Iran’s energy sector, including the State Employees’ Retirement System, the Pennsylvania Municipal Retirement System, and the Public School Employees’ Retirement System (PSERS). (1) The impact of this initiative is disputed – according to Rep. Frankel, “there is also the indication that the overall economic sanctions at every level have had an enormous impact.” (2) Originally, however, the bill was supposed to have a much larger effect. The oil giant Shell was dropped from the list of companies from which to divest pension funds after it argued that the sanctions did not apply to it. (3) Pennsylvania pension funds have shown a propensity to resist divestment for humanitarian and political reasons, specifically objecting to divesting from Northern Ireland and South Africa on the grounds of political rights violations in those countries. (4)
Pennsylvania’s contracting legislation, HB 201, prohibits businesses investing more than $20 million in Iran’s energy sector from entering into contracts with the state worth more than $1 million. (5) The bill provides exceptions for investment activities with Iran before 2010 and for instances in which the state has “no other cost-effective method of obtaining the good or service” than entering into the contract.
Key actors: Rep. Dan Frankel (D-Allegheny) (6) and Sen. Mike Stack (D-Philadelphia) sponsored Act 44 (public trust divestment) and HB 201 (contracting), respectively.