Files (pdf): Halliburton Resolution - Conoco Resolution - General Electric Resolution

Prompted by heightened concerns about corporate ties to states sponsoring terrorist activity, New York City Comptroller William C. Thompson, Jr. is calling for a review of three U.S. companies that conduct business with terrorist-linked countries. Thompson has submitted shareholder resolutions on behalf of the New York City Police and Fire Department Pension Funds to the Halliburton Company, ConocoPhillips and the General Electric Company.

The resolutions call on shareholders to vote to establish a Board of Directors' committee to review the corporation's operations with reference to "potential financial and reputational risks."

"If we are trying to eradicate terrorism, we must ensure that companies in our portfolio are not using off-shore subsidiaries to legally evade United States sanctions against terrorist-sponsoring states," Comptroller Thompson said. "This is an issue of paramount importance."

"We believe their use of off-shore and United Kingdom subsidiaries to establish operations with countries that sponsor terrorism violates the spirit, if not the letter of the law," he added. "These actions also expose the companies to the prospect of negative publicity, public protests, and a loss of consumer confidence, all of which can have a negative impact on shareholder value."

Halliburton opened an office in Iran under the name Halliburton Products and Services Ltd., its Cayman Islands subsidiary, in February 2000. The resolution requests the following statement be put before shareholders for a vote at Halliburton's annual meeting on May 21: "The Iranian government has actively supported and funded terrorist operations against innocent civilians outside its own borders. These activities led to the imposition of government sanctions that provide that virtually all trade and investment activity with Iran by U.S. corporations is prohibited."

The Police and Fire Department funds have more than $18 million in holdings in Halliburton. In total, the city's five pension funds have invested more than $23 million in the corporation.

Halliburton has challenged the resolution. The firm has asked the U.S. Securities and Exchange Commission to refrain from sanctioning the company if Halliburton omits the proposal from its 2003 proxy materials. The SEC has not yet responded to the request.

General Electric conducts business operations with the Iranian government through its Canadian subsidiary, General Electric Hydro. The two funds have more than $205 million in holdings in General Electric. The city's five funds have invested $951 million in General Electric. Discussions began between the Comptroller's Office and General Electric last week to examine the issue.

ConocoPhillips has operations in Iran and Syria through its UK subsidiary, Conoco, Ltd.
The two funds have more than $31 million in holdings in ConocoPhillips. The city's five pension funds have invested more than $124 million in ConocoPhillips. ConocoPhillips has not challenged the resolution.

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