General Electric and Halliburton begin to divest

Feb 03, 2005

President George W. Bush used the occasion of his 2005 State of the Union address to characterize America’s current view of a nation he once famously called a member of the “Axis of Evil” – the Islamic Republic of Iran:

Today, Iran remains the world’s primary state sponsor of terror – pursuing nuclear weapons while depriving its people of the freedom they seek and deserve. We are working with European allies to make clear to the Iranian regime that it must give up its uranium enrichment program and any plutonium reprocessing, and end its support for terror. And to the Iranian people, I say tonight: As you stand for your own liberty, America stands with you.

It is gratifying that the President’s clear-eyed assessment of the nature of the Iranian regime, and the danger it poses to the United States and its vital interests seems increasingly to be shared by companies that have, until recently, been partnering with that regime. Specifically, in recent days, Halliburton and General Electric have announced their intention to cease business operations with Iran.

Clearly, two factors contributed to these companies’ decisions to reverse their long-held position that such business dealings were both legal and desirable:

1) Efforts in the U.S. Congress led by Senator Frank Lautenberg (D-NJ) to close the loophole whereby American-owned companies can legally do business with sanctioned state-sponsors of terror by utilizing offshore subsidiaries as cut-outs. It is to be hoped that a revised version of the Lautenberg legislation – which was narrowly defeated twice in the Senate last year will be adopted shortly on a bipartisan basis. And,

2) The American people’s heightened awareness about what amounts to “trading with the enemy” by a relatively small number of such U.S.-owned companies and many more foreign-owned and -operated ones. No small contribution to raising this awareness has been made by the Center for Security Policy’s DivestTerror.org campaign (see www.DivestTerror.org).

“The decision by Halliburton and GE to leave terrorist-sponsoring Iran is an important step in the direction of denying our adversaries financial resources they want to use to hurt us,” said Frank J. Gaffney, Jr., the Center’s President. “Unless and until non-American companies stop partnering with the Iranian mullahs, however, the latter will continue to enjoy the fruits of investments these publicly traded companies garner in the U.S. capital markets.”

Gaffney added: “A redoubled effort should now be made to secure accountability, transparency and corporate good governance with respect to activities in Iran – and the divestment of the stocks of all companies found to be directly or indirectly underwriting or otherwise enabling Tehran’s terror and/or weapons of mass destruction programs.”

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