New Jersey is slated to become the first state in the country to divest its pension funds from Iranian-linked companies if the governor signs legislation that passed out of the state legislature earlier this week.
The bill received a push from NORPAC, the Englewood-based Israel lobby, which had been promoting the divestiture for six months. Dr. Mort Fridman, NORPAC’s vice president, led the divestment effort.
"We’ve been working together with our Jewish organizations to educate the members of the Senate and Assembly to the dangers to the state of New Jersey investing pension funds in companies that do business with Iran," Fridman said. "Iran is a dangerous and unstable regime."
As the result of a law passed last year, the state divested $’.16 billion from 17 companies linked to Sudan. Divestment has been a tool for New Jersey since it led divestiture efforts against South Africa in the 1980s. New Jersey’s state pension fund is worth about $80 billion, making it the ninth largest in the country.
"The passage of this legislation would [mean] that we can’t put any of these large amounts of money into funds that would directly benefit Iran," said state Sen. Loretta Weinberg (D-Dist. 37). "It’s our way in the state of New Jersey of making a statement, as well as putting our money where our collective mouths are on an issue of international importance."
Weinberg cited the success of divestment in South Africa and hoped this would have a similar effect.
The Assembly passed the divestment legislation in the summer. Assemblyman Gary Schaer (D-Dist. 36) said he was certain the governor would sign the bill into law. Calls to the governor’s office were not returned by press time. Weinberg and Fridman shared the assemblyman’s optimism that the bill would become policy.
Iranian President Mahmoud Ahmadinejad’s anti-Israel rhetoric and Holocaust denial have no place in world politics, Schaer continued.
"New Jersey is standing up at this point very clearly in refuting everything the president of Iran has said and done," he said.
Although New Jersey is a small state, its multi-billion-dollar pension fund gives it a formidable voice.
Tom Vincz, the state treasury’s communications director, said that should the governor sign the bill, the treasury will hire an outside firm to review the state’s portfolios and determine which businesses would be affected. He is unsure of the exact amount of money that is tied up in companies linked to Iran, but he estimated $750 million to $1 billion is at stake.
"We won’t have a clear understanding until we contract with a research firm and it decides how those holdings match up," he said.
Alongside the state’s push toward divestment, UJA Federation of Northern New Jersey passed a resolution at a September board of directors meeting calling for divestment from Iran and Sudan.
"Whereas, companies conducting non-humanitarian business in Iran serve to prop up and allow the government of Iran to continue its nuclear weapons program as well as its policy of sponsoring terrorism " the resolution read.
UJA-NNJ declared it "morally unacceptable for it to profit from or support the two countries, the regimes in Sudan and Iran, through investment in companies conducting non-humanitarian business ."
The federation will direct its investment committee to divest its endowment and pension funds of all direct investments in companies conducting non-humanitarian business in either country. The resolution also directs the Jewish Community Relations Council to promote similar policies among other Jewish and multi-faith organizations. JCRC’s Israel affairs committee will next week to "fine tune" its strategy, said JCRC director Joy Kurland.
"The JCRC is basically going to begin an effort to reach out to the various Jewish agencies to encourage them to take up this divestment issue as we have and look into their respective portfolios to replicate the same type of initiative."
According to a recent National Intelligence Estimate report, Iran had discontinued its nuclear weapons program in ‘003, striking a blow to the Bush administration, which has been seeking tougher sanctions based on Iran’s nuclear ambitions. Israel maintains that Iran is pursuing nuclear weapons. NORPAC’s Fridman also discounted the report, arguing that Iran is still a danger.
There are three aspects to a nuclear weapons program, he said. While Iran may have discontinued the process of trying to attach a nuclear device to a missile, it still continues uranium enrichment and has an arsenal of missiles that can carry a nuclear detonator.
"If they did cease the weaponization aspect, we don’t know whether they have restarted it," he said. "In any event, they have continued with two out of the three steps."