Louisiana takes important step toward divesting terror

(Baton Rouge, Louisiana): Building on the momentum of the Center for Security Policy’s Divest Terror campaign, the State of Louisiana this week enacted a new law entitled Act 9 designed to increase transparency with respect to investments by the State’s public pension systems in companies that do business in and with terrorist sponsoring nations.

The Center’s President, Frank J. Gaffney, Jr. responded to this development with the following statement: "Louisiana now leads the Nation with respect to assuring that its public pension funds and their beneficiaries are not unwittingly contributing to the financial resources of our enemies in the War on Terror. Gov. Kathleen Blanco and the State Legislature – which took this step at the initiative of Rep. Pete Schneider (R-Slidell) – are to be strongly commended, both for the contribution they are making to mitigate these funds’ exposure to what the Securities and Exchange Commission calls ‘global security risk’ and, we hope, to denying state sponsors of terror the wherewithal they could use to harm Americans."

The new Louisiana law has three important aspects:

• It requires portfolio managers doing business with the state’s 13 pension systems to screen for companies that do business with terrorist-sponsoring nations, as defined by the U.S. State Department in "Patterns of Global Terrorism: Iran, Syria, Libya, Sudan and North Korea."
• It requires state public pension funds to report semi-annually to the legislature on those companies in portfolio that have business ties in Iran, Syria, Libya, Sudan and North Korea.
• The law also authorizes the state’s 13 pension funds to divest from companies doing business in and with the terrorist-sponsoring nations.

The Center for Security Policy hopes that Louisiana public pension funds and/or state officials will utilize the disclosures mandated by this legislation to take the step it also authorizes: Divestment of shares held by these funds issued by companies partnering with state-sponsors of terror. By so doing, Louisiana could further provide leadership to other states and localities whose public pension systems are currently holding such shares in portfolio – a tie to terrorism unknown to virtually all the funds’ beneficiaries.

Since its launch last August, the Center’s Divest Terror initiative has been actively engaged in educating the American people and their leaders about the extent – and the financial, as well as strategic, implications – of the exposure U.S. institutional and individual investors have in companies doing business with terror-sponsoring states. For example, the Center’s August 2004 report entitled The Terrorism Investments of the 50 States documents that the Nation’s 100 leading public pension funds have invested roughly $188 billion in companies operating in such rogue states.

The Center for Security Policy believes that these companies materially contribute to the capacity of governments that support terror, albeit indirectly, via their business relationships with those regimes by providing the latter vital revenues and advanced equipment and technology. It calls on all American investors to follow Louisiana’s lead and, in so doing, to diminish this ominous contribution by divesting terror – thereby forcing the companies in question to choose between doing business in these countries and their standing in the U.S. capital markets.

More information about the Center’s Divest Terror campaign can be found at www.DivestTerror.org.