Jewish World Review Jan. 27, 2004 / 4 Shevat, 5764
Frank J. Gaffney, Jr.
What is a citizen concerned about the proliferation of weapons
of mass destruction (WMD) - and the possibility they will wind up in
terrorists' hands - to do?
Chief inspector David Kay has thrown up his hands after months
of fruitless searches for Saddam Hussein's covert WMD stockpiles, publicly
questioning the competence of U.S. and foreign intelligence agencies who
said significant quantities of such weapons remained in Iraq after the 1991
No less worrisome, other countries - from North Korea to Libya
- are proving that they have successfully pursued this dangerous weaponry,
in some cases exceeding what the intelligence services had thought possible.
Worse yet, Libya's recent disclosures have helped illuminate a
secret, global pipeline for nuclear weapons-related designs and technology.
It appears to have translated Chinese-enabled Pakistani WMD capabilities
into assistance that could well be in the service not only of rogue states,
but perhaps even organizations like al Qaeda.
Just when it appeared that neither intelligence operations nor
inspections nor international arms and export control regimes can be relied
upon to protect us from the nexus of terror and WMD proliferation, concerned
citizens have received some important words of encouragement - from an
unlikely source: CBS' popular TV news magazine, "60 Minutes."
On Sunday night, "60 Minutes" called the attention of its
millions of American viewers to a dirty little secret: "Just about everyone
with a 401(k) pension plan or mutual fund has money invested in companies
that are doing business in so-called rogue states. In other words, there are
U.S. companies that are helping drive the economies of countries like Iran,
Syria and Libya that have sponsored terrorists."
Citing a powerful commercial data base developed by Conflict
Securities Advisory Group (CSAG), the news program established that roughly
400 publicly traded companies - some headquartered in this country, many
more overseas - are effectively enabling terrorism. One of those who told
"60 Minutes" he felt "anger" that investors were unwittingly helping our
enemies was William Thompson, New York City's comptroller, a job that makes
him responsible for $80 billion in city workers' pension funds.
Reporter Lesley Stahl spoke to Thompson about Iran, whose
leaders he notes earn "most of their revenues through their oil industry."
She asked: "So what is the connection between that oil business and
terrorism and weapons of mass destruction?" The Comptroller responded: "The
Iranian Government is receiving dollars from it. And then turning around and
exporting terrorism around the world. It benefits terrorism. At least that's
With the help of CSAG's software, Thompson was able to
determine that several prominent American companies held in his pension
funds' portfolios had subsidiaries in countries like Iran. As "60 Minutes"
noted, he began to investigate their activities "at the request of New York
City's police and firemen, who were outraged when they learned where their
retirement money was going." Thompson said, "The members of the Fire
Department and the Police Department, after September 11th, given the fact
that hundreds of them died in the World Trade Center as a result of a
terrorist attack, had greater sensitivity than almost anybody. And they were
the ones who kind of took the lead on this."
American investors - both individual and institutional - have a
further, compelling reason for following the lead of New York's heroic
police and firefighters: CSAG's President, Roger Robinson (a colleague and
friend from the Reagan White House) warns that investors could see share
value seriously depressed by the negative publicity and popular hostility
that ensues as companies' ties to terrorist regimes come to light.
Robinson told "60 Minutes,": "We're certainly alerting
investors to a genuine new risk category in the markets, every bit as
legitimate as environmental risk was through Three Mile Island, Exxon Valdez
and superfund legislation....Investors, we think, have a right to know.
Remember, this is their retirement dollars. They should have a sense [from]
those who invest on their behalf: Are there genuine risks there?"
In short, Americans with funds in the stock market have an
opportunity to do well while doing good. They can reduce material risk to
their retirement funds while signaling to companies that seek to secure or
retain their investments not to do business - either directly or through
cut-outs - with terrorist-sponsoring and/or proliferating regimes.
As Comptroller Thompson put it: "Those countries depend on
dollars from us to live, to do business also. If we...put pressure on the
companies, and they can't do business there, and others become embarrassed
in doing business or buying oil there, well maybe we can help to force these
countries to change their practices."
Unfortunately, not all institutional investors have been as
principled and responsible as William Thompson and Arizona Treasurer David
Peterson, who was stonewalled by his state's public pension funds when he
sought to compare their investments against Conflict Securities' data base.
The bottom line is clear, however. It is the right of American
investors - and the responsibility of those who manage their funds - to know
whether monies set aside for pensions, retirement savings, life insurance
portfolios, etc. are being used in ways that could be both harmful to their
country's security and to their financial futures. Armed with such
information, each of us can, in effect, privatize and, thereby, greatly
enhance counterproliferation efforts in this War on Terror.
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JWR contributor Frank J. Gaffney, Jr. heads the Center for Security Policy. Send your comments to him by clicking here.
© 2004, Frank J. Gaffney, Jr.