Friday, April 11, 2008

MA Divestment Bill Passes Committee

On April 10, 2008, the Committee on State Administration and Regulatory Oversight in the Massachusetts State Legislature held a hearing for H. 4270, which would require the Pension Reserves Investment Management (PRIM) Board to divest from roughly 20 companies that are involved in Iran’s oil and gas initiatives. Supporters of the bill accuse Iran of being a sponsor of terrorism and a threat to the U.S. because of its pursuit of a nuclear program.

According to PRIM officials, the total value of Iran-related investments is $452 million in securities. In written testimony, Stanley Mavromates, CIO of the pension fund, said it would cost $10,000 to $40,000 a year to hire a consultant to maintain an Iran divestment list and $5 million in Iran-related securities sale transaction costs. According to Mavromates, those costs could pay the annual pension benefit for nearly 200 state employees and teachers.

Rep. Denise Provost (D-Somerville) said: “We need constructive engagement. We need to talk to them.”

Jim Walsh said the Legislature was better off passing a non-binding resolution. He said in his testimony, “My own conclusion is that this legislation, while well intended, is unlikely to be effective and will instead create unintended consequences that actually make it more difficult to achieve a successful resolution of the nuclear issue and other issues in the US-Iranian relationship.”

The Committe, which is co-chaired by the bill’s main sponsor, Rep. Antonio Cabral (D-New Bedford) endorsed the bill, with ten members voting for the bill and no one registering opposition. Six U.S. representatives from the Massachusetts delegation have written a letter of support for the bill to House Speaker Salvatore DiMasi.

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