Divestment Doubts

To the extent that you closely monitor the hearings of the Committee on Judiciary of the California State Assembly — and you know you do — you might want to keep anespecially close eye on the upcoming vote on AB 221.

The bill introduced by freshmanAssemblyman Joel Anderson (R-El Cajon) would require the state’s employee pension funds CalPERS and CalSTRS to divest from companies that do business with Iran. Together CalPERS and CalSTRS now invest about $24 billion in such companies.

Last week AB 221 breezed through its hearing at the Committee on Public Employees, Retirement and Social Security on a 4-to-1 vote. Its Judiciary Committee hearing is slated for April 17.

As it rolls along, it has attracted a growing list of supporters in the Jewish community. Groups from Hillel to the Board of Rabbis of Southern California have lobbied for it. Many rabbis have sent e-mails to congregants urging them to call their representatives and support its passage.

And it’s not just Jewish groups that have signed on. The Iranian exile community and assorted anti-terrorism experts and Web sites have all backed the bill.

AB 221 is part of a nationwide effort to punish and isolate Iran economically. The Iran Counter-proliferation Act of 2007 (HR 1400),proposed by Rep. Tom Lantos (D-Calif.), the House Foreign Affairs Committe Chair, and Rep. Ileana Ros-Lehtinen (R-Fla.), would, among other measures, expand existing sanctions against third parties that still deal with Iran.

And at least 10 states are considering their own measures to curtail employee pension investments in Iran. The effort was spearheaded by Missouri Treasurer Sarah Steelman. The soft-spoken, telegenic Steelman — not a Jew — was a featured speaker at the American Israel Public Affairs Committee (AIPAC) annual policy conference in Washington, D.C., in March, where she wowed delegates with her straightforward appeal for “terror-free investing.” Just why in the world, she said, are her state’s investments supporting the very governments trying to kill her?

If you read AB 221 and these other measures, one word that doesn’t pop up often, if at all, is the “D” word. But make no mistake, whether the legal language speaks of “prohibiting investment” as in AB 221 or of requiring “foreign subsidiaries of U.S. companies to cease all business activities in Iran,” as in the Lantos bill, what they really mean is divestment.

On the one hand, divestment can be our friend. It worked to bring down the apartheid regime in South Africa, and Jews, non-Jews and even George Clooney lined up late last year to support another California Assembly bill calling for divestment from companies doing business with Sudan in light of its support of genocide in Darfur.

And there is no question divestment is politically and emotionally satisfying. Former Israeli Prime Minister Benjamin Netanyahu has long roused crowds with his vision of an economically sanctioned Iran: “Fewer and fewer companies will enter Iran,” he said at AIPAC. “More and more will leave. Investment dollars and the technology it buys will dry up. The lifeline of a hated regime will be cut, its future imperiled.”

But it might be wise to pause to consider two questions before we leap on this bandwagon.

Can sanctions backfire? We Jews had better have a strong and convincing answer when the inevitable question arises: If companies and institutions can punish Iran through divestment, why not Israel? Why are nukes OK for Israel but not Iran? Why not divest from both. After all, Israel’s critics have been pushing for divestment with significant success and the backing of people like South African Bishop Desmond Tutu. Intelligent, moral beings should have no trouble discerning between Israel and a regime that has made public promises of nuclear genocide — “Israel should be wiped off the map” — but the challenges will come.

Former Democratic Assemblyman Paul Koretz, who sponsored last year’s Darfur divestment legislation, told me even he isn’t sure he’d support AB 221.

“I’d have to think long and hard about it,” he told me over the phone. “I don’t know how far one pushes it. At some point you weaken the statement if you do it in 15 different cases. In the case of active genocide, it was a no-brainer.”

Will sanctions work? An analysis by Israel’s Re’ut Institute says maybe not. Iran has been working hard to develop a web of economic ties with Eastern European and Asian countries to soften any economic blows. It is too simplistic, argues Re’ut, to attribute Iran’s economic woes to sanctions, when poor but correctable economic policies may be to blame.

And, most troubling, even if the economy goes south, that’s no guarantee it would affect Iran’s nuclear ambitions.

“Iran’s nuclear aspirations are driven by various factors including the desire for regional hegemony and international recognition,” a Re’ut report said.

“Thus, it is not clear that Iran will cease enriching uranium because of economic pressure.”

Remember, sanctions failed miserably against Fidel Castro’s Cuba, and that country just sells Macanudos, not oil.

“Isolating Iran like Castro’s Cuba has produced only the same result as in Cuba: strengthening Iran’s ‘Castros,'” wrote New York Times columnist Tom Friedman in January. “But for talks with Iran to bear fruit, we have to negotiate with Iran with leverage.”

Friedman called for economic measures targeted at Iran’s hardliners, for bringing down the price of oil, for making clear “that Iran can’t push us out of the gulf militarily,” for restoring our embassy in Teheran and for allowing Iranian students visas to study in the U.S.

When it comes to Iran, Leon Wieseltier said, “a reasonable level of hysteria” is justified. It just might be that a divestment campaign, especially one divorced from outreach and incentives, is unreasonable.