The Securities and Exchange Commission wants investors to have peace of mind. -- "No investor should ever have to wonder whether his or her investments or retirement savings are indirectly subsidizing a terrorist haven or genocidal state," said Christopher Cox, the chairman of the SEC, the Financial Times of London reported Thursday. -- But "companies are infuriated," Jeremy Grant reported, "because the list does not make clear the extent of a company's business in such states, or whether they still have business there." -- BACKGROUND: -- The Financial Times doesn't give the URL, but here it is. -- Three companies earn the distinction of being listed by the SEC as doing business in all five terrorist states: Credit Suisse Group Ltd., HSBC Holdings PLC, and Siemens Aktiengesellschaft. -- A company cannot, by the way, be "infuriated." -- Companies have no emotions. -- Those who should be infuriated are the taxpayers whose taxes fund this neo-Orwellian charade. -- The facts are these. -- The U.S. Department of State compiles a list of "state sponsors of terrorism." -- It is directed to do so by three U.S. laws: the Export Administration Act, the Arms Export Control Act, and the Foreign Assistance Act. -- The designation triggers sanctions that can include restrictions on U.S. foreign assistance, a ban on defense exports and sales, certain controls over exports of dual use items, and miscellaneous others. -- But as has been demonstrated over and over again, this list is a purely political device that bears no relation to the reality of terrorism. -- Indeed, there is overwhelming evidence that, as Noam Chomsky has said, "the U.S. itself is a leading terrorist state" (9-11 [New York: Seven Stories Press, 2001], p. 40). -- He cited well-documented incidents in Nicaragua, Lebanon, Turkey, Sudan, Congo, and Guatemala, and noted more generally that "The U.S. is officially committed to what is called 'low-intensity warfare.' That's the official doctrine. If you read the standard definitions of low-intensity conflict and compare them with official definitions of 'terrorism' in army manuals, or the U.S. Code, you find they're almost the same. . . . Terrorism, according to the official definitions, is simply part of state action, official doctrine, and not just that of the U.S., of course. It is not, as is often claimed, 'the weapon of the weak.' Furthermore, all of these things should be well known. It's shameful that they're not" (ibid., p. 57)....
SEC's ANTI-TERROR TOOL ANGERS COMPANIES
By Jeremy Grant
Financial Times (UK)
June 28, 2007
WASHINGTON -- Some of the world's biggest companies are outraged by a new software tool launched by U.S. federal regulators aimed at exposing which of them could be "indirectly subsidizing a terrorist state."
The Securities and Exchange Commission this week added to its website a function that takes investors to a list of five countries -- Cuba, Iran, North Korea, Sudan, and Syria -- designated by the State Department as "state sponsors of terrorism." By clicking on each country, investors see a list of companies mentioning that country in their latest annual reports. The companies are mostly non-U.S., and include Unilever, Cadbury, Nokia, Siemens, Total, Syngenta, and HSBC.
Christopher Cox, SEC chairman, said the site fell under the commission's investor-protection mission. "No investor should ever have to wonder whether his or her investments or retirement savings are indirectly subsidizing a terrorist haven or genocidal state."
But the companies are infuriated because the list does not make clear the extent of a company's business in such states, or whether they still have business there. Todd Malan, president of the Organization for International Investment, which represents the interests of the roughly 1,200 foreign companies with U.S. stock market listings, said: "My phone has been ringing off the hook. It makes it look like they are sitting around drinking tea in Tehran and writing big checks."
He said that because the list was "had no threshold for judging whether a company does a material level of business in a country," investors would likely trade on the mere appearance of a company on the list. "They aren't going to look at the fine print, and they could well be acting to their financial detriment as a result."
The SEC says a company's appearance on the list does not "in itself, mean that the company directly or indirectly supports terrorism."
John Nester, SEC spokesman, said: "These companies have reported this information to shareholders in their regulatory filings. That's the official record that these companies have reported and that is the record that this tool helps investors access. Nothing more, nothing less."
Mr. Malan said that because the list links to the company's latest annual report -- which could be out of date -- it does not show which companies had started to divest from terrorist-supporting states.
Schlumberger, the Houston-based oilfield services group, is one of 32 companies listed under Sudan, based on its annual report.
Yet since that was published it had committed to expanding its humanitarian activities in the country, says Adam Sterling, director of the Sudan Divestment Taskforce, which has persuaded 18 U.S. states to divest from Sudan. He said the company was not on his group's list. "It's [the SEC's list] spun as a blacklist. Not a single company that we target for their operations in Sudan is covered by the SEC's tool."
The SEC says the information on the site will be "continuously updated to reflect SEC filings as they are received."