South Dakota bill would require state divestment from companies doing business in Iran

SD bill bars state investment in companies in Iran

PIERRE, S.D. — Gov. Mike Rounds said Thursday he supports the idea of restricting state investment in companies that have significant involvement in Iran.

Rounds did not endorse any particular bill, but he said he could support a measure that was properly worded and could be enforced to prevent investment in Iran or other nations that support terrorism or other efforts to harm U.S. military personnel.

“If any of that money is going a country that is turning around and using it against our soldiers and our citizens, then that’s where we draw that line,” the Republican governor said.

A bill filed Thursday and sponsored by nearly half the members of the Legislature would require the state to get rid of its investments in companies that do substantial business in Iran and are subject to sanctions under the 1996 federal Iran Sanctions Act.

The measure would require the state and its public retirement system to pull money out of three oil companies that are heavily involved in projects with Iran’s national oil company, said one of the main sponsors, Rep. Dan Lederman, R-Dakota Dunes. Those companies are Petrobras, Royal Dutch Shell and Total, he said.

Iran sponsors terrorists, Lederman said, and explosive devices used against U.S. troops in Iraq that have traced back to Iran.

“I think we’d be hard pressed to find any state employees that would agree with investing in a foreign oil company that is aiding Iran and providing dollars that end up killing our sons and daughters,” Lederman said.

Lederman is the lead House sponsor of a Senate bill whose main sponsor is Sen. Stan Adelstein, R-Rapid City.

The Senate State Affairs Committee will hold a hearing in the next week or so on the bill and a competing measure suggested by the South Dakota Retirement System and the state Investment Office, which is responsible for investing the assets of the retirement system and money from various state accounts.

The language supported by the Retirement System and Investment Office emphasizes their duty to invest in a way that provides benefits to members of the Retirement System. It would require the Investment Office to talk with companies, specifically the three oil companies, to encourage them to comply with federal laws. The office would also recognize the risk involved in doing business in Iran when deciding whether to invest in companies.

Rob Wylie, director of the Retirement System, said the state might have a greater effect on investment in Iran if it encourages the oil companies to get out of Iran.

“It doesn’t mean we support what goes on in these countries that are so contrary to good citizenship. They’re horrid,” Wylie said.

Lederman said 20 other states have passed similar laws or policies regarding investment in Iran.

Lederman’s bill would give the three oil companies 15 months to get out of Iran or the state would get rid of its investments in the companies.

Aside from the moral issues, the state also is taking a big risk in holding stock in the oil companies because Iran might nationalize those companies’ operations in the country, Lederman said.