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The Deal: PERA, Governor Ritter, AIPAC and the Legislature (note see Jan 22, 21, 19, 6, 3 for more coverage of this issue)

January 23, 2008


A deal,  made at the end of last week, was announced yesterday, widely reported in the local press. It was between Colorado’s state pension fund (PERA), Governor Ritter, the Jewish Community Relations Council (in which the main moving force seemed to be AIPAC) and some legislators. It would result in PERA scrutinizing companies that have more than $20 million invested in Iran’s energy sector. Under certain conditions future investments in such funds might be divested.

The agreement capped a campaign to get the state legislature to pass a divestment bill that started around six months ago with a bi-partison op ed in the Rocky Mountain News that called on the legislature to mandate PERA to divest from companies doing business with Iran. This initiative – part of a national political agenda spearheaded by AIPAC over the past few years – was in response from a call to the country’s Jewish citizens and organization from Israeli right-wing politican Binjamin Netanyahu. The divestment campaign began by targetting Sudan last year and moved on to Iran in the current legislative session.

Observing this process closely it is interesting how limited is the focus. This divestment campaign doesn’t focus mutual funds themselves, companies that invest in Iran’s energy sector, only state pension funds. As such it turns out to be yet another attack on public employees and public sector financing and as such is an integral part of the Bush Administration’s attempt to weaken and undermine people working in and for government. It is instructive how willing Democrats have been to join their Republican colleagues in what is little more than a political feeding frenzy at the expense of public employees and their retirement funds.

Evaluating The Deal/Sung and Unsung Heroes.

The agreement reached between the PERA board, AIPAC and some state legislators was a compromise, the main results of which were:

it took the issue out of the legislature where it most likely would have been more politicized. The terms imposed on PERA would have been harsher. (there is debate on this point, but I believe it essential). It was wise of the PERA board to limit the damage of the possible divestment legislation

AIPAC and the legislators involved agreed. They’d come under a great deal of public fire. AIPAC especially begins to get uncomfortable when their little operations come under public criticism or media scrutiny as was beginning to happen in this case. They prefer greater anonymity as they know, the more public attention to their politicking, the more like it will result in some kind of blowback. Indeed, AIPAC’s strong arm tactics in pushing this issue left a somewhat bitter taste in the mouths of many members of the PERA community, which some day could backfire.

once the negotiations were `privatized’ so to speak..taken out of the legislative process – the PERA executive director, Meredith Williams, was essentially able, behind closed doors to limit the potential damages to the fund to a certain extent. (more below)

the process was a `real education’ for groups like Friends of PERA and CSREA. Without a struggle they would have gotten nothing. They didn’t get alot out of the deal, but much more than they would have had they simply went to the mountains and gone snowboarding. Their political activism – if they think hard on the lessons – could serve them well in the coming rounds of attacks on PERA, which are almost certain to come, be it from right-wing motivated divestment schemes or neo-con attacks on access to pension fund assets.

for AIPAC and company, it was a `victory’ – once again it showed their considerable political clout on the state level, its ability to forge together a powerful, politically broad based coalition (strange its social chemistry was) and they did achieve some of their goals no doubt. But the victory was more symbolic than real in some respects and they know it. They can toot their horn – another state has gotten on the Iran-Divestment train – but…but… was harder this time than they expected and they got less out of the deal than they wanted.

To elaborate on this last point a bit…(and in so doing I include some of the many thoughtful insights from Cheryl Flagg of Steamboat Springs, with whom I have been in correspondence these past weeks. There are others from Friends of PERA, CSREA whose activism, insights made a big difference. Among them: Cynthia Rutledge, for example, wrote every single legislator. Beverly Lehrer-Brennan took her Jewish heritage and stood up against divestment, offering alternative solutions. Eileen Coffelt from Hayden helped spread the message deeper into the depths of the western slope. Sandy Green and Don Schaefer..all of whom had the infrastructure and the real guts to confront the prodivestment players face to face and mobilize thousands of meetings, e-mails, letters, and phone calls. Plus all the unsung heroes who worked so hard.

AIPAC came out with a victory of `principle’ for sure, the victory being that it got PERA to agree to the principle that Iran should be subject to divestment on political grounds, essentially on a human rights basis. No small feat in principle but less significant in fact. Flagg notes that the process also creates a cottage industry of for divestment, possibly hiring more staff, buying more lists, using more staff time for analysis and decision making. She also points out that, as far as she can tell, the agreement is open ended. It has no sunset clause stating at which point all this activity and divestment will cease. It seems the only way a country has been removed from the State Department’s terrorist list (and thus as a subject for divestment) is to be invaded, like Iraq. That said, she says the final Iran Divestment Policy adopted by PERA is still a huge relief and everyone’s efforts should be applauded.


It seems the only way a country has been removed from the State Department’s terrorist list (and thus as a subject for divestment) is to be invaded, like Iraq.


Limits of AIPAC’s Victory

The key to understanding the limits of AIPAC’s victory is what it had to give up to PERA in return: the right to monitor the entire divestment process. It is PERA and not the legislature (and certainly not AIPAC or any other outside body) that has the sole responsibility for determining what companies are investing in Iran’s energy sector and also what to do about it. As written the new policy explicitly makes `fiduciary responsibility’ the primary factor in determining whether PERA should or shouldn’t divest from a company. ie. if a possible divestment would hurt the fund, it does not have to do it. I would expect (we’ll see) that this will result in some Iran-related divestments but actually very few and rather small ones whose impact on the fund will be minor and whose impact on Iran will something close to non-existent. (this last point was well understood by even a number of strong Zionist supporter friends of mine underlining the largely political rather than economic impact of this initiative, at least here in Colorado)

Comparing this Iran-divestment agreement with the Sudan divestment passed by the state legislature in the last session, Flagg wisely notes, there are some protections built into the current agreement that gives more PERA stakeholder protection. The agreement speaks of possible ( not mandatory) divestment based upon fiduciary rather than political concern. It calls for taking into consideration `the availability of alternative direct investment providing similar diversity and return expectations. Failing such conditions, divestment is not required. The Sudan divestment bill passed in the last legislative session had none of these protective clause

Colorado AIPAC: Key Player

As it came together nationally – it was far more than some little Colorado hatched scheme – it brought together that bizarre but temporarily cohesive coalition of liberal Jewish organizations (AIPAC) with Christian fundamentalists, Iraq war hawks, Bush neo-cons – that narrow, but politically powerful band within the country’s political spectrum of those hoping to extend the war in Iraq to Iran. Although the press reports formerly refer to the Jewish Community Relations Council as spearheading this effort in Colorado’ Jewish Community – which is technically true, it is AIPAC, a Council member, that directed the legislative drive. In a number of public meetings, emails and the like, PERA leaders and legislators specifically mention negotiating with AIPAC.

This bizarre band of brothers and sisters together has considerable political clout on local levels. Before Colorado’s deal was reached, Iran divestment bills had passed in New Jersey, California and Florida (where the pension funds are much larger than Colorado’s $40 billion fund). Some moves in the direction of divestment also took place in Missouri, Texas and several other states.

Governor on Board

Colorado’s Governor Bill Ritter helped shepard the deal and his office was involved in encouraging the Iran-divestment momentum. Ritter explained his support for the deal arguing that Iran should be punished as `the leading state supporter of terrorism’ . Ritter has accepted line hook and sinker that Iran is supplying Iraq with the roadside bombs that are killing and wounding American military in Iraq. On a trip to Iraq in December he met with two officers in the military, Steve Ward and Joe Rice, both of whom, state legislators here in Colorado, would have sponsored the Iran-divestment resolution. They seemed to have convinced Ritter of the Iran connection to Iraqi road side bombs (ied’s as they are referred to).

In other words, although the logic, excuse for the US military occupation has shifted dramatically over the years since the invasion as each claimed pretext gets undermined and collapses, Ritter is willing to accept the current rationales as gospel truth, this despite the fact that neither accusation has been proven. Far more basic – he accepts the legitimacy of US occupation of Iraq – that has resulted in something close to a million deaths by some sources and the creation of 6 million refugees (4.5 million who fled the country, 1.5 million internal). No surprise here, he is simply following the line of the Democratic Leadership Council whose members in Colorado pretty much control the party.

The Hidden Lobby: The PERA Pensioners

What is missing from the news stories – at least the 4 or 5 – accounts that I read, all not bad by the way in some ways – is what forced the process out of the legislature in the first place: The Iran divestment bill ran into sharp, one might even describe it as `fierce’ resistance from PERA recipients themselves. The fund represents close to 400,000 present and past state employees of whom 75,000 (including me) receive retirement benefits. Having had a broad based and poorly conceived Sudan-divestment scheme essentially forced down their throats in the legislatures last session, with the initiation of a second divestment scheme targeting Iran, pensioners began to wonder where the divestment steam roller would go next, undermining the fiduciary stability of the fund.

Besides Iran is not Sudan.

Perhaps not genocide, but crimes against humanity have been committed in Sudan. One can accuse Iran’s President Ahmadinejab of anti-Jewish, anti-Israel rhetoric – and true enough, there are valid and serious criticisms of the country’s human rights record, but the genocide label just doesn’t stick with Iran. Most serious human rights organizations, despite their criticisms of Irans policies towards gays, secular elements, consider the human rights situation in Iran actually considerably better than what exists in Saudi Arabia or Iraq. Besides, the campaign to vilify Iran, to magnify its human rights short-comings bears many similarities to what happened in the US media prior to the US invasion of Iraq where Saddam Hussein was compared to Hitler and his regime to Nazi Germany. The `it’s 1939 all over again’ logic is a sure sign that the US is targeting a country for war or major military attack.

Organized in two groups – the Friends of PERA and the Colorado State Retired Educators Association, pensioners opposed the proposed Iran-divestment legislation as soon as the initiative became public. They mobilized their forces all over the state – it was quite an energetic and from what I can tell unprecedented lobbying effort that caught the legislators by surprise (some of which is described below: Jan 22, 19, 6, 3). Not accustomed to this level of resistance – legislators responded with avoidance (Ken Gordon), insipid arguments (Romanoff), insults and insipid arguments (Rice and Penry), …that is to say with their usual gutter level of political opportunism. They began to get nervous that an open and much media publicized fight over the legislation would hurt their already not particularly healthy images.

Josh Penry (R-Fruita) seems particularly upset that a compromise has been reached and continues to threaten to introduce legislation despite the compromise agreement, this despite the fact that he received over 1000 emails from constituents opposed to the whole idea of Iran-divestment. The compromise policy deprived him of a cause celebre, a political he probably hoped to ride to higher office. He can’t seem to give up the issue that most thought resolved last week.

Had PERA participants not launched their opposition movement, the result could have been worse. No, it would have been worse.

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