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Terrorist Treasury: How New York

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Title: Terrorist Treasury: How New York

1
Terrorist Treasury How New Yorks Public
Pension Fund Invests in our Enemies

Senator Jeffrey D. Klein Senator Eric Adams
Deputy Minority Leader Ranking Minority Member
34th Senate District Veterans, Homeland
Security Military Affairs Committee
20th Senate District
June 2007

Senator Jeffrey D. Klein
Deputy Minority Leader, New York State Senate
Senator Eric Adams
New York State Senate
Prepared By
Matthew S. Schneid
Office of Senator Jeffrey D. Klein
Victor Mallison
Office of Senator Jeffrey D. Klein
Shelley Andrews
Office of Senator Jeffrey D. Klein
Special Thank To

3
Letter from Senator Klein
4

SECTION 1
INTRODUCTION

5
Introduction

Since our nation and state was attacked on
September 11, 2001, our country has been awakened
to the real threat of global terrorism on
Americas shores. To that effect, our national
government has engaged in a Global War against
Terror to fight terrorist entities and those who
support them.
While fighting terror is largely seen as a
federal initiative, every government entity has
an important role to play, and there are many
ways that individual states can contribute. At
the top of that agenda is Terror-Free Investing.

6
Introduction, Cont.

Terror-Free Investing is a way for states to
engage and fight the global war on terror by
directing public pension fund investments away
from companies who invest in terrorism or nations
who sponsor terrorist groups.
New York States public employee pension fund is
one of the largest in the nation, with
investments totaling 140 billion. The state
pension fun can have a considerable financial
impact when directed properly.

SECTION 2
ANALYSIS OF
TERRORIST THREATS
TO NEW YORK

8
Analysis of Problem

The US Department of State Identifies five
countries as sponsors of terrorism, and as New
Yorkers we must make sure that our tax dollars
and other public monies dont go to increase
their funding of terrorist organizations.
Although New Yorks pension fund doesnt directly
invest in terrorist groups or terror sponsoring
nations, our fund is invested in multiple
companies that do business with these nations.
New York especially has to be wary because we are
considered the prime target for terrorism in the
United States. In addition to the horrific events
of 9-11, NY was recently the target of a plot to
attack our airports.

9
Country by Country Analysis Threat to United
States

Iran
Iran remains the most active state sponsor of
terrorism. Its Islamic Revolutionary Guard Corps
(IRGC) and Ministry of Intelligence and Security
(MOIS) have been directly involved in the
planning and support of terrorist acts and
continue to exhort a variety of groups,
especially Palestinian groups with leadership
cadres in Syria and Lebanese Hezbollah, to use
terrorism in pursuit of their goals. In addition,
the IRGC was increasingly involved in supplying
lethal assistance to Iraqi militant groups, which
destabilizes Iraq and threatens the lives of
American troops.
Iran continues to be unwilling to bring to
justice senior al-Qaida members detained. Iran
has refused to publicly identify these senior
members on "security grounds." Iran has also
resisted numerous calls to transfer custody of
its al-Qaida detainees to their countries of
origin or to third parties for interrogation
and/or trial.
Iran maintains a high-profile role in encouraging
anti-Israeli terrorist activity -- rhetorically,
operationally, and financially. Supreme Leader
Khamenei and President Ahmadi-Nejad have praised
Palestinian terrorist operations, and provided
Lebanese Hezbollah and Palestinian terrorist
groups -- notably HAMAS, Palestinian Islamic
Jihad, the al-Aqsa Martyrs Brigades, and the
Popular Front for the Liberation of
Palestine-General Command -- with extensive
funding, training, and weapons.
Iran presents a particular concern, given its
active sponsorship of terrorism and its continued
development of a nuclear program. Iran is also
capable of producing biological and chemical
agents or weapons. Like other state sponsors of
terrorism with WMD programs, Iran could support
terrorist organizations seeking to acquire WMD.

10
Country Analysis Cont.

Syria
The Syrian Government continued to provide
political and material support to both Hezbollah
and Palestinian terrorist groups. HAMAS,
Palestinian Islamic Jihad (PIJ), the Popular
Front for the Liberation of Palestine (PLFP), and
the Popular Front for the Liberation of
Palestine-General Command (PFLP-GC), among
others, base their external leadership in
Damascus. The Syrian Government insists that the
Damascus-based groups undertake only political
and informational activities. However, in
statements originating from outside Syria, many
Palestinian groups have claimed responsibility
for anti-Israeli terrorist acts.
The Syrian Government has not been implicated
directly in an act of terrorism since 1986,
although preliminary findings of a UN
investigation into the February assassination of
former Lebanese Prime Minister Rafik Hariri have
indicated a strong likelihood of official Syrian
involvement.
In May 2007the Syrian Government ended
intelligence cooperation with the United States,
citing continued U.S. public complaints about the
inadequate level of assistance to end the flow of
fighters and money to Iraq.

11
Country Analysis Cont.

North Korea
North Korea , the worlds only unreconstructed
Stalinist country, has not been conclusively
linked to a terrorist attack since the bombing of
a Korean Airlines flight in 1987, but it still
has a prominent place in the war on terrorism
because it sells advanced missile technology to
other states that sponsor terrorists. Even more
worrisome is North Korea s October 2002
admission that it has had an ongoing secret
nuclear-weapons program, in violation of its
treaty commitments and a 1994 agreement with the
United States to halt its pursuit of nuclear
weapons. North Korea also claims to have other
more powerful weapons.

12
Country Analysis Cont.

Sudan
Sudan continues its cooperative commitment
against known and suspected international
terrorist elements believed to be operating in
and out of Sudanese territory. The government
undertook actions against security threats posed
by persons either suspected of using Sudan as a
base of operation and/or persons of Sudanese
origin purported to be associated with terrorist
organizations. Sudan produced desired results
against international terrorist elements and the
facilitators that support them.
Sudan's history of having played host in the
mid-1990s to Al-Qaida leader Osama bin Ladin.
The flow of weapons and personnel between Sudan
and most of its western, southern, and eastern
neighbors has weakened international efforts to
stabilize the region. Many of Sudan's borders,
particularly those along the Red Sea coast,
remain porous and penetrable making it an easy
part point of entry for human-trafficking and
other black market elements.
Continued focus has been placed on Sudan for its
role in contributing fighters for the Iraqi
insurgency. Sudanese and foreign nationals who
trained in Sudan have been captured as foreign
fighters in Iraq.

SECTION 3
RESEARCH AND RESULTS

14
Research Methodology

A list of the New York State Common Retirement
Funds assets were compiled as of March 31, 2006,
the end of the 2006 fiscal year.
The list was taken from the 2006 Comprehensive
Annual Report.
The listing of the pension funds equity assets
were then vetted by The Conflict Securities
Advisory Group to assess which companies do
business with terror-sponsoring nations.
Conflict Securities Advisory Groups Global
Security Risk Monitor identifies and profiles
publicly traded companies with business ties to
countries identified by the U.S. State Department
as state sponsors of terrorism.

15
Results

New York has links to 235 companies that do
business with nations that sponsor terrorism.
7 of NYs equity assets are linked to these
companies.
12 billion dollars are invested in the 235
companies.
16 of New York equity investments are tied to
companies that invest in nations that sponsor
terrorism.

16
Companies with 100 Million or More Invested
from New Yorks Pension Fund

Chevron Corporation
Country Connection Sudan
Total NY Investments 537,599,794
ConocoPhillips
Country Connection Iran and Syria
Total NY Investments 402,524,541
Coca-Cola
Country Connection Iran, North Korea, Sudan and
Syria
Total NY Investments 349,280,545
Royal Dutch Shell
Country Connection Iran, Sudan, Syria
Total NY Investment 209,991,294
Total SA
Country Connection Iran, Sudan and Syria
Total NY Investment 165,726,410
ENI SpA
Country Connection Iran
NY Investment 100,774,675

All companies compiled by the Office of Senator
Jeffrey D. Klein
17
Conclusion

New York must amend its investment strategy to
direct funds away from terror sponsoring nations.
In this century we are facing stronger enemies
than in the previous century. Americans should
not be financiers of a war against ourselves. As
citizens of New York we can show that we are
still as united on standing against terrorists
and terrorism as strongly as we were on September
11. We are telling all the terrorists that they
are not only being hunted by our military forces,
but also with our economic strength.

SECTION 4
LEGISLATIVE REFORMS
TO FIGHT TERRORISTS FROM NEW YORK

19
Terror-Free Investing Sweeping the Nation

Multiple state have enacted or proposed
legislation regarding divestment from Iran, which
is a country listed as a state sponsor of
terrorism
California
Florida
Georgia
Kansas
Louisiana
New Jersey
Oklahoma
Oregon
Texas
Missouri

20
Legislative Recommendations

Enact Terror-Free Investing legislation in New
York State
Divest the New York State public employee pension
fund from terror sponsoring nations
Iran, Syria, Sudan and North Korea
Measure the success of the program by having the
Comptroller provide yearly progress reports to
the state legislature

21
Recent Updates in New York

The New York State Comptroller has embraced the
notion of using the investment fund as a means of
influencing foreign policy.
NYS Comptroller has already advocated divestment
of funds from companies who do business with
Sudan.

22
Appendix