View ConocoPhillips' Feb. 3rd Letter to Comptroller's Office
View ConocoPhillips' Dec. 16th Letter to Comptroller's Office
View Shareholder Proposal

New York City Comptroller William C. Thompson, Jr. today announced that, in response to pressure from two New York City Pension Funds, ConocoPhillips has adopted a policy that limits its domestic and foreign subsidiaries’ future business activities with terrorist-linked countries.

In a letter sent to Thompson last week, the Houston, Texas-based integrated energy company disclosed that it will make sure that its business activities do not violate “the spirit and the letter of U.S. law.

“ConocoPhillips will not approve business ventures in sensitive countries unless it is convinced that it can do so legally and within the spirit of U.S. law,” the letter read. “Accordingly, our policy would not permit the commencement of business activities in a sanctioned country by either a domestic or foreign subsidiary.”

The announcement comes after Thompson, on behalf of the New York City Fire Department Pension Fund and the Police Pension Fund, submitted a shareholder resolution urging the company to review its operations in Iran and Syria through its UK subsidiary, Conoco Ltd.

“ConocoPhillips has taken the necessary steps to ensure shareholders that the company will not in any way advance the reach of terrorism through its business activities,” Thompson said. “I am also glad that ConocoPhillips has offered assurances that it has already ended any business connections with Iran, and will end its connections with Syria in the future.”

“I hope that these decisions will encourage other companies to thoroughly examine their relationships with rogue nations, and end any ties that can promote terrorism. Over the next few months, my office will expand the scope of our efforts and increase pressure to ensure responsible relationships.”

"As this announcement is made, there are hundreds of New York City police officers serving double duty in the military in Iraq,” noted Patrick J. Lynch, President of the New York City Patrolmen’s Benevolent Association. “It is simply wrong to have their pension money invested where it might support terrorism. The New York City Patrolmen's Benevolent Association appreciates the work done by Comptroller Thompson in obtaining an agreement with ConocoPhillips."

Early last year, Thompson submitted shareholder proposals on behalf of the New York City Police and Fire Department Pension Funds with ConocoPhillips, the Halliburton Company, and the General Electric Company to prompt them to examine relationships with terrorist-sponsoring nations. The proposals called on shareholders to vote to establish a Board of Directors' committee to review each corporation's operations with reference to "potential financial and reputational risks."

“Only through the proxy power of a large shareholder like the combined New York City pension funds can such significant corporate governance changes occur so quickly,” said Stephen J. Cassidy, President of the Uniformed Firefighters Association, representing NYC’s firefighters. “New York’s Bravest tip their helmets to the comptroller for aggressively attacking this cause and we urge GE and Halliburton to follow ConocoPhillips’ lead.”

“Many of our fire officers gave their lives protecting New Yorkers from terrorism and many more put themselves at risk of potential terrorist activity every day,” said Peter Gorman, president of the New York City Uniformed Fire Officers Association. “Our officers' pension funds should not be invested in companies doing business with terror-linked nations. We applaud ConocoPhillips and believe other companies should follow suit.”

Thompson, in the proposals, noted that these activities could expose the companies to the prospect of negative publicity, public protests, and a loss of consumer confidence.

Thompson was troubled by ConocoPhillips’s business ties with Iran and Syria through its UK subsidiary, Conoco, Ltd. ConocoPhillips appealed to the Securities and Exchange Commission (SEC). The SEC stated that it would take no action against the company if it did not put the proposal before shareholders because of a recent merging that had reestablished the company as ConocoPhillips, which meant that Thompson could resubmit the resolution after ConocoPhillips existed for more than one year.

ConocoPhillips nevertheless agreed to examine its operations and report to Thompson and on December 16 – 13 days after Thompson resubmitted the proposal - filed that document. In the report, and in last week’s letter, the company assured Thompson that it on longer engages in any business with Iran and that it has a partial interest in a small gas-processing project in Syria, a contract that will end as early as next year. Officials told the Comptroller’s Office that, over the last few months, they have phased in a policy to strengthen oversight to ensure that it does not approve any business in sanctioned countries unless it can do so in compliance with the letter and spirit of U.S. law.

The Police Fund has 386,120 shares worth $25.4 million in holdings in ConocoPhillips, while the Fire Fund has 142,784 shares worth more than $9.4 million in ConocoPhillips. The city's five pension funds currently have 2,497,643 shares worth more than $164 million the company.

While praising ConocoPhillips’s action, Thompson expressed displeasure that the two other companies have not undertaken similar measures. Thompson recently submitted, for the second time, a proposal with Halliburton. His office currently expects to submit another shareholder resolution with GE later this year.

Besides Thompson, Stark, Cassidy and Gorman, the trustees on the Fire Department Pension Fund are: Mayor Michael Bloomberg; Nicholas Scoppetta, Chair, New York City Fire Commissioner; James Slevin, and Kevin McAdams, Treasurer, and Robert Straub, Bronx Trustee, Uniformed Firefighter's Association of Greater New York; Arthur Parrinello, Chief's Rep., and Stephen Carbone, Lieutenant's Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

Thompson, Stark and Lynch are joined on the Police Pension Fund board by: Mayor Bloomberg; Commissioner Stark; Raymond Kelly, Chair, New York City Police Commissioner; Mubarak Abdul-Jabar and Scott Williamson, Chair of the Board of Trustees, Police Benevolent Association; Thomas Scotto, Detectives Endowment Association; Edwin Mullins, Sergeants Benevolent Association; Anthony Garvey, Lieutenants Benevolent Association; and John Driscoll, Captains Endowment Association.

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