Florida poised to lead with Divest Terror law; Florida poised to lead with legislation divesting pension funds from Iran-Partnering Companies

(Washington, DC:) Friday afternoon, the Florida State Senate unanimously joined the growing nationwide movement to divest from Iran.  (The Center for Security Policy has just released a Fact Sheet on Terror-Free Investing, including a list of a number of the most prominent companies doing business in Iran.)  The Senate vote to pass the "Protecting Florida’s Investments Act" was 39-0.  The Florida House is expected to vote on a companion measure as early as today.

The Florida bill – introduced by Sen. Ted Deutch (D–Boca Raton) – joins other terror-free investing (TFI) initiatives in California, Georgia, Texas, Missouri, Louisiana, Pennsylvania, Michigan, Vermont and New Jersey aimed at divesting public pension funds doing business in one or more terror-sponsoring states.   This legislative action in Tallahassee could make State of Florida the first in the country to pass a bill designed to have its pension plans divest from companies investing in Iran’s energy sector. The Florida bill would also direct the state’s pension systems to divest from companies doing business with the government of Sudan.

Responding to critics of the bill who claimed the legislature is improperly meddling in financial matters, Florida Sen. Don Gaetz (R–Fort Walton Beach) said, "Any uncertainty over whether public policy should have a moral basis was resolved, on this continent at least, by Jefferson, Adams, Madison and later, Lincoln. When functionaries of government decide to put our retirees’ savings into the war-making capabilities of our enemies, they’re making bad public policy and elected lawmakers have a moral obligation to try to stop it."

Frank J. Gaffney, Jr., President of the Center for Security Policy which sponsors the DivestTerror.com, a national campaign to promote terror-free investing, applauded the Senate’s action in Florida: "This landmark legislation signals that Americans are beginning to vote with their wallets – by refusing to invest in countries that support and encourage terror. It is certain to prove to be but the first of many such initiatives across the nation and, taken together, these bills hold the promise of bringing about change in the targeted countries in the same way as the disinvestment effort that helped end apartheid in South Africa twenty years ago."

Meanwhile, in Ohio, the House Financial Institutions, Real Estate and Securities Committee seems likely to make the Buckeye State the next to adopt an Iran-specific divestiture act. Former CIA Director James Woolsey and Deputy Missouri Treasurer Doug Gaston are scheduled to testify in favor of the bill.

The concept of divestment from Iran and other terror-sponsoring countries enjoys broad public support in the United States. A recent survey by Luntz, Maslansky Strategic Research, found the 81 percent of Americans believe that the public pension funds of fire fighters, police officers, teachers and other government employees "definitely should not" invest in companies that do business with countries that sponsor terrorism.

As to questions about the fiduciary impact of such divestments, Missouri State Treasurer Sarah Steelman and her Deputy, Doug Gaston, have demonstrated that terror-free investing need not entail lowered return on investment. Since the Missouri Investment Trust became – thanks to Ms. Steelman and Mr. Gaston – the first public fund in the nation to divest companies doing business with state-sponsors of terror, the terror-free portfolio has outperformed its benchmark by 3.9 percent.

There are important developments at the federal level, as well. Representatives Brad Sherman (D-CA) and Barney Frank (D-MA) plan to clear up any questions concerning the tax and legal aspect of divestment, Rep. Sherman, chairman of the International Terrorism, Nonproliferation and Trade Subcommittee, will introduce legislation in the near future to allow taxpayers to defer paying the capital gains tax on any investment they sell due to connections to terrorism. And Rep. Frank, who chairs the Financial Services Committee, is planning to move legislation soon that would provide explicit authorization for states to conduct divestment from companies doing business in Sudan, Iran and possibly other countries that support terrorism.

The cumulative effect of these efforts to use the Nation’s financial power to change the policies and perhaps even the governments of terrorist-sponsoring states hold out the prospect of accomplishing such important objectives without having to resort to military means.   Those responsible deserve our thanks – and support.

Key Contacts on the Florida Legislation

Sen. Ted Deutch
Room 324 Senate Office Building
404 South Monroe Street
Tallahassee, FL 32399-1100
(850) 487-5091
Senate VOIP 5091
SunCom 277-5091
[email protected]

Sen. Jeff Atwater
Room 406
Senate Office Building
Tallahassee, FL 32399-1100
(850) 487-5100
Senate VOIP 5100
SunCom: 277-5100
[email protected]

Rep. Adam Hasner
322 The Capitol
402 South Monroe Street
Tallahassee, FL 32399-1300
(850) 488-2234
[email protected]

Rep. Ari Porth
1301 The Capitol
402 South Monroe Street
Tallahassee, FL 32399-1300
(850) 488-2124