Reprinted from NewsMax.com
Congress to Pass Tough Iran Legislation
Reprinted from NewsMax.com
Kenneth R. Timmerman
Saturday, July 28, 2007
– Congress is expected to pass legislation on Monday that will make it
easier for state pension funds to divest from companies doing business
in Iran, despite the efforts of fund managers and pro-regime lobbyists
to block their efforts.
Rep. Brad Sherman, D-Calif., who will
run the floor debate next week, told an audience at the American
Enterprise Institute on Thursday that the new bill was designed to moot
the arguments of fund-managers who have opposed disinvestment
legislation now pending in some 15 states on the grounds that it would
open them up to shareholder lawsuits.
"I know of nobody who was sued for
divesting from South Africa," Sherman said. "I can't imagine a judge
saying it is good business to invest in Iran."
While details of the measure were
still being worked out, Sherman indicated that it would provide
protection from lawsuits to state pension funds, grandfather pending
state laws, and change tax basis rules so that individuals or fund
managers shedding stock in companies investing in Iran would not get
stuck with capital gains on their profits.
"I think we should be encouraging disinvestment, not taxing it," Sherman said.
Known as the Iran Sanctions Enabling
Act (H.R. 2347), the bill targets companies with investments of $20
million or more in Iran's energy sector. It was introduced in May by
Rep. Barney Frank, D-Mass., chairman of the House Financial Services
committee, after a joint hearing with Sherman's foreign affairs
subcommittee on April 18.
Support for harsher sanctions against Iran is building in both parties.
The Frank bill has 43 co-cosponsors,
including key Republicans such as Ileana Ros-Lehtinen of Florida, the
ranking member of the foreign affairs committee, Dan Burton of Indiana,
Eric Cantor of Virginia, Joe Knollenberg of Michigan, and Trent Franks
Last week, the House cut off access
to U.S. government export credits offered by the Overseas Private
Investment Corp. to any company selling goods or services to Iran.
And a separate bill that passed
recently, known as the Iran Counter-Proliferation Act of 2007 (H.R.
1400), would make secondary sanctions mandatory against foreign oil
companies doing business in Iran.
Until now, those sanctions –
initially passed in 1996 – could be waived by the president and have
never been imposed by Presidents Clinton or Bush.
"We have a lot of tools in the
toolbox we could use against Iran," Sherman said. "The bad news is, we
haven't had the political will to take them out of the toolbox."
Over the past year, Treasury
Secretary Henry Paulson has pursued a behind-the-scenes effort,
jawboning his foreign counterparts to convince them to scale back their
exposure in Iran.
This has led the German export credit
agency, Hermes, to reduce its export credits for new business in Iran
by 30 percent this year, said Danielle Pletka, AEI's vice president for
foreign affairs and defense programs.
"The Treasury sanctions have made the cost of money to the Iranians almost double," she added.
As a result of these efforts, Iranian
banks are having a hard time clearing international transactions, and
major foreign banks have announced they are pulling out of Iran.
While the Congressional Research
Service has compiled an impressive table showing more than $100 billion
in recent energy contract by foreign companies with Iran, many if not
most of those deals exist only on paper, according to economist Patrick
Clawson of the Washington Institute for Near East Policy.
"New foreign projects have not moved
forward," Clawson said. Without massive injections of foreign oil field
technology, Iran could cease exporting oil by 2015, Clawson added.
The economic pain the United States
and its allies have begun to inflict appears not to faze President
Mahmoud Ahmadinejad, who revels in sticking his finger in America's eye.
"Ahmadinejad's supporters come from
the hinterland, not from the middle classes or the elites," said the
Kenneth Katzman of the Congressional Research Service.
"There is no pressure from his [lower
class] constituents to cave in to international demands" to stop Iran's
nuclear program, Katzman added. "The pressure comes from bazaaris,"
Iran's business and trading class.
Iran's business community has long
sought to get U.S. sanctions on Iran lifted, and has panicked over the
disinvestment campaign now under way in 15 states because it directly
impacts their ability to profit from foreign trade.
The National Iranian American
Council, a recently created group that lobbies Congress against
sanctions, held a separate conference on Thursday to oppose the
disinvestment campaign as well as State Department funding for
pro-democracy groups inside Iran.
"We're tracking disinvestment," NIAC legislative director Babak Talebi told NewsMax. "But there are so many bills."
At least a dozen Iranian-Americans
who accused NIAC of supporting the goals of the Tehran regime were
denied entry to the NIAC event, which was hosted at the Rayburn House
Office Building by Rep. Christopher Van Hollen, D-Md., and Rep. James
"This has all the trappings of a regime-sponsored event," a U.S. government official told NewsMax.
Moran, an outspoken opponent of the
Bush administration and the Iraq war, derided sanctions and dismissed
the State Department efforts to provide funding for pro-democracy
groups inside Iran.
"I think it's stupid to put money
into democracy assistance," he said. "That $75 million is interpreted
[by the Iranian government] as money to overthrow the regime. That's
not an intelligent or productive thing to do."
However, Moran said he would vote for
the disinvestment bill because it also called for disinvestment from
companies doing business in Sudan, a popular cause with the left.
Out in the hallway after the NIAC
event, Iranian-Americans handed out papers calling NIAC founder Trita
Parsi "a consistent advocate of a policy of appeasement" toward the
"Trita Parsi and NIAC do not
represent the Iranian-American community," said women's rights activist
Mandana Zand-Erwin, who was denied entry to the NIAC event.
"They represent the Islamic regime," she told NewsMax.
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