With the stroke of a pen, Rhode Island joined more than two dozen states and Washington D.C. in divesting all state funds from Iran as Governor Chafee signed into law legislation sponsored by Senator Joshua Miller and Representative Mia Ackerman at the request of Attorney General Peter F. Kilmartin.
Rhode Island's Iran Divestiture Act requires the state Retirement Board to identify all companies in which the public fund has direct or indirect holdings in companies with business operations in Iran within 90 days upon the Governor's signature. The State Investment Commission will then send written notice of possible divestment to companies found with direct holdings. Each of those companies then has 90 days to cease scrutinized operations or convert them to inactive operations, otherwise leaving the public fund to divest according to a statutory schedule.
The state General Treasurer must follow a similar process with state contracts. Companies that either provide false certification or fail to demonstrate they have ceased business with Iran can be subject to a civil penalty of $1 million or twice the amount of the contract, termination of the contract and ineligibility to bid on a contract for three years.
"Corporations and investors that do business with Iran support and strengthen a dangerous regime that is developing nuclear weapons, brutally represses its own people and sponsors terrorism worldwide," said Attorney General Kilmartin. "Companies that wish to continue 'business as usual' in Iran should be subject to debarment from state government contracts. The prospect of debarment is one of the most effective ways to compel corporations to end their Iran business. I commend Governor Chafee, and the Act's sponsors, Senator Miller and Representative Ackerman, for standing up for what is right. As a state and a country, we cannot support companies that support terrorism."
Almost three years ago, the U.S. Congress passed the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010. It is under the provisions of this act that states like Rhode Island are authorized to pursue divestment from companies that do business with Iran.
Rhode Island has similar divestiture laws outlawing state funds to be invested in companies that do business with Northern Ireland.
Iran divestiture has been an initiative of the National Association of Attorneys General. "The Office of Attorney General is charged with protecting the state of Rhode Island and its taxpayers, and significant taxpayer money is lodged in pension funds, state investments and state contracts. This not only helps our nation's fight against terrorism, but also protects our taxpayer investment and pension funds. Simultaneously it also tells the investment and corporate community to put the interest of the safety of Americans above corporate profits," added Kilmartin.