The national debate over attempts to force government-run pension funds to divest from rogue nations — whether or not legislation should focus solely on Iran, Sudan or a handful of other countries, and whether the overall approach should be broad or narrow in scope — has found its way to Harrisburg.
On one side is State Rep. Josh Shapiro (D-District 153), who in April introduced three bills that each call for a multibillion dollar reshuffling of several Pennsylvania pension systems. If passed, the measures would mandate that fund managers divest assets from roughly 400 foreign-owned companies that do any business with nations on the U.S. State Department list as sponsors of terror (Iran, Syria, North Korea, Sudan and Cuba).
On the other side is State Rep. Babette Josephs (D-182), who later that same month introduced her own, far narrower bill aimed at halting what the U.S. government has called a genocide taking place in the Darfur region of Sudan.
Following the model established by the Washington, D.C.-based Sudan Divestment Task Force, Josephs' bill would apply to less than 12 foreign companies that engage in business activity deemed to be directly or indirectly abetting the Sudanese government in its Darfur campaign.
But Josephs has an edge in the legislative standoff, because she chairs the State Government Committee, the body in part will determine the fate of both bills.
At present, she's waiting to build support for her own bill before bringing it to a vote, and is blocking attempts to have Shapiro's bill moved forward in the process.
Frank Gaffney, founder and president of the Center for Security Policy in Washington, D.C., has said that Shapiro's legislation could serve as a model for the entire country, and at the same time, substantially harm Iran's finances and its ability to produce nuclear weapons.
At a June 11 program at Har Zion Temple in Penn Valley sponsored by the Jewish Federation of Greater Philadelphia, Gaffney blasted Josephs for putting a freeze on Shapiro's efforts.
"It's all about politics," he said, adding that he believed Josephs simply wants to take the credit for having her own item passed.
Josephs said that she and Shapiro simply differ over strategy.
"I'm very interested in having all of this legislation pass," said Josephs. "It's a judgment call. I've watched the legislature a long time, and this is how I want to play it."
Specifically, she argued that the legislature would be reticent to pass all three of Shapiro's bills at once — each of which deals with a separate state pension fund — and that fund managers vociferously oppose the House's attempts to meddle in the investment process.
Evelyn Tatkovski, spokesperson for the Public School Employees Retirement System, one of the funds that would be affected by both the Shapiro and Josephs legislation, said that it had not yet weighed in on the matter.
Violates a Principle
Some think that any kind of divestment is bad policy.
Bill Reinsch, president of the National Foreign Trade Council, said that not only can it financially harm individuals who depend on their pensions, but it violates the constitutional principle of having the federal government set foreign policy.
He added that divestment laws "encourage anybody who is mad at any particular country to start a movement."
Reached via e-mail, Shapiro wrote that he remains "hopeful that the House Committee will soon report out my divestment legislation, and I am confident that once it reaches the House floor that it will have the support of a majority of the members."