Greg Abbott Keeps Iran Sanctions In Place Despite U.S. Agreement
News Article by SportEar
On the heels of a trade mission to Israel, Gov. Greg Abbott on Wednesday told officials with the state’s retirement funds to maintain bans on investing in companies that do business with Iran, despite the nuclear pact orchestrated by President Barack Obama that is lifting economic sanctions against the Persian Gulf nation.
“These (state-level) sanctions have and will continue to ensure that Texas does its part to prevent taxpayer dollars from aiding and abetting a country that is openly hostile to the United States and its allies abroad,” Abbott wrote in a letter to the directors of five state retirement agencies.
The 2013 Texas Prohibition on Investment in Iran Act says the state’s ban will expire when the federal government “revokes its sanctions against the government of Iran,” but Abbott said that Texas will continue its ban because the nuclear agreement didn’t lift all federal sanctions against Iran.
“It’s a symbolic move on his part in trying to show that he is a stalwart supporter of Israel and to show that he can actually do something concrete to show his support,” said Jeremi Suri, a University of Texas professor of global affairs. “The danger is that it politicizes the way our state agencies invest our money.”
The five retirement funds addressed in Abbott’s letter are the Employees Retirement System of Texas, the Teacher Retirement System of Texas, the Texas Municipal Retirement System, the Texas County and District Retirement System and the Texas Emergency Services Retirement System. Together, they manage almost $200 billion in assets. The 2013 law prohibits them from “investing in companies that conduct business with or supply military equipment to Iran.”
Abbott’s letter comes days after Iran showed it had de-escalated its nuclear program in accordance with the Washington-orchestrated agreement, triggering a prisoner swap with the U.S., lifting oil and financial sanctions and releasing $100 billion in frozen Iranian assets. Israeli Prime Minister Benjamin Netanyahu has opposed the deal and attempted to use his Republican allies in Congress to block it.
From the widely adopted MacBride Principles that govern investment in Northern Ireland to the Sullivan Principles that targeted apartheid-era South Africa, attempts to use large public funds to advance political causes is nothing new. About two dozen other states have enacted their own sanctions against Iran, some of which are tied to federal policy and some of which operate independently.
“It will not have any effect on Iran or Israel. The potential effect it could have would be a negative effect for Texas investors,” he said. “If there are one or two or three investment opportunities that we pass up and California invests in, then we will have missed out.”
The Israel trip was Abbott’s third international jaunt since taking office a year ago. He traveled to Mexico in September and visited Cuba — another country where the Obama administration has made it easier for U.S. companies to do business — in late November.
Unlike with Iran, Abbott took the president’s green-lighting of trade with Cuba as an opportunity for Texas businesses, urging investment and stronger economic ties between the island nation and the Lone Star State.