By: SARAH STEELMAN
Dozens of states have passed laws forbidding state and local governments from doing business with companies invested in Iran, but one short paragraph in the nuclear deal negotiated by President Obama appears to shatter these efforts.
In 2006, as treasurer of Missouri, I decided to divest state funds—including in employee pensions—from any bank, company or financial institution doing business with a terrorist-sponsoring state. At that time the list included Iran, North Korea, Syria and Sudan.
I believed it was my constitutional and fiduciary responsibility to the people of Missouri to prevent their money from potentially helping support terrorist activities. At least 30 other states have undertaken similar initiatives.
Remember that U.S. sanctions were initially imposed because Iran was designated as a state sponsor of terrorism, so the law prohibited Americans from doing business there. Yet at that time American money was flowing into publicly traded companies that were flouting the sanctions. States’ efforts clearly helped stanch this flow of money. Why else would Iran specifically enumerate the lifting of these state laws in the recently negotiated agreement?
Paragraph 25 of the agreement (formally known as the Joint Comprehensive Plan of Action) reads: “If a law at the state or local level in the United States is preventing the implementation of the sanctions lifting as specified in this JCPOA, the United States will take appropriate steps, taking into account all available authorities, with a view to achieving such implementation. The United States will actively encourage officials at the state or local level to take into account the changes in the U.S. policy reflected in the lifting of sanctions under this JCPOA and to refrain from actions inconsistent with this change in policy.”
We are left to wonder how the Obama administration intends to proceed against these sanctions at the state level. Federal law of course pre-empts state law, but does this agreement, which still lacks congressional approval, trump state laws and constitutions? What kind of consequences might the president suggest for state officials who continue to follow the divestment and sanctions programs duly enacted by their states?
The battle to enact sanctions was a long and difficult one at every level of government. In Missouri, opponents of divestment stonewalled requests for investment information, used scare tactics and called names. It was a constant grind over several years, mainly because pension-fund managers told people that divestment would decrease their returns. This same kind of opposition was encountered in other states, such as Florida, Indiana, California, Ohio and South Dakota, that followed Missouri’s lead.
The highly advertised “snapback” provision that puts sanctions back in place if Iran violates the agreement is a figment of Mr. Obama’s imagination. Once the sanctions are gone, they are not coming back.
No taxpayer wants his tax dollars to help those who have killed our soldiers, as Iran has. This agreement undermines the will of the people in the states that adopted these policies and will allow billions of dollars of taxpayer money to flow to Iran’s Revolutionary Guard Corps.
Americans can blunt the damage this agreement will do by contacting state officials and demanding that present legislation that prohibits doing business with companies invested in Iran continues to be enforced. The bottom line is always the bottom line: Money talks and the ayatollah listens. Now, while the president is urging a dangerously bad deal, is not the time to stand idle.
Ms. Steelman, formerly the state treasurer of Missouri, is an assistant professor of economics at Missouri University of Science and Technology.
WALL STREET JOURNAL
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