By CHET BROKAW

Source:

February 17, 2010

PIERRE, S.D.

Plans to restrict state investment in companies that do business in Iran and other nations that support terrorism got a boost Wednesday in the South Dakota Legislature.

The Senate State Affairs Committee voted unanimously to approve two bills restricting state investment in companies that do business in Iran, Sudan and other countries sanctioned by Congress. The measures next head to the full Senate for further debate.

The first bill, which is sponsored by nearly half of the Legislature, would require the state to dump stock in companies that do substantial business in Iran and are subject to sanctions under the 1996 federal Iran Sanctions Act. Rep. Dan Lederman, R-Dakota Dunes, the main House sponsor of the bill, told the Senate committee that 19 other states and the District of Columbia have passed similar measures.

“This bill can be summed up in one line: You don’t help your enemies,” Lederman said.

State Investment Officer Matt Clark said that as of last fall, South Dakota held about $60 million in three oil companies identified by federal law as improperly doing business in Iraq. One of those companies has since been removed from the list, and the state now owns only $9 million in stock in two sanctioned companies, Netherlands-based Royal Dutch Shell PLC and France’s Total SA.

Sen. Gene Abdallah, R-Sioux Falls, said the state should get rid of holdings in those two companies because the money is a small part of the total holdings of the South Dakota Retirement System, which has assets of about $7 billion.

“You’re talking about supporting a terrorist country. I don’t care if we lose all $9 million,” Abdallah said.

The second bill was suggested by the Retirement System and the state Investment Office, which is responsible for investing assets of the Retirement System and money from various state government accounts. It emphasizes the Retirement System’s duty to invest in a way that benefits its members, and it would forbid so-called social investing, such as directing state money to promote renewable energy projects or other social goals.

However, the Retirement System’s bill also would require the Investment Office to encourage companies sanctioned under federal law to stop doing business with nations that support terrorism, genocide or other atrocities. The office would take account of the risk of investing in such companies when deciding whether to hold stock in them.

Rob Wylie, director of the Retirement System, said the system opposes having its investments directed to specific social goals. The state might have a bigger effect on investment in Iran if it encourages companies to get out that nation, he said. Wylie and Clark support the bill suggested by the Retirement System and opposed the offering from lawmakers.

Veterans organizations supported the bill requiring the state to get rid of investments in companies involved in Iran. Ken Orrock of Rapid City, representing the American Legion, said companies should be prevented from doing business with Iran because that nation is providing advisers and bombs used to kill and injure U.S. military personnel in neighboring Iraq.

“This is real. This is South Dakota people being harmed,” Orrock said.