New York City Comptroller William C. Thompson, Jr. testified today before the U.S. Senate Trade Subcommittee on his efforts to pressure some of America’s largest companies sever their ties with terrorism-sponsoring nations.

“For the safety and security of the United States and other peace-keeping nations around the world, institutional investors must continue to insist that the firms they invest in not attempt to wriggle out of sanctions against state sponsors of terror by acting through subsidiaries not beholden to American law,” Thompson said.

The Committee invited the Comptroller to testify on “Halliburton’s current and past business dealing with Iran, and issues regarding the legal framework that continues to allow foreign subsidiaries of U.S. companies to do business with Iran.” Senator Byron Dorgan (D-ND) chaired the hearing, held in Washington, D.C.

Over the last several years, Comptroller Thompson and the New York City Pension Funds have prodded six Fortune 500 companies to sever their business ties with rogue nations such as Iran and Syria.

In January 2004, CBS’s “60 Minutes” highlighted Thompson’s work pressuring Halliburton to cease conducting business with Iran. Halliburton agreed to fully withdraw from Iran by the end of 2007; the company announced two weeks ago that it has now fully complied with that agreement.

Other firms that have similarly agreed to cease future business ties with terrorism-sponsoring nations are: Aon Corporation of Chicago, ConocoPhillips of Houston, Texas, Cameron International Corporation (formerly Cooper Cameron) of Houston, Texas, General Electric of Fairfield, Conn., and Foster Wheeler of Clinton, N.J.

The resolutions were filed on behalf of the New York City Police Pension Fund, Fire Department Pension Fund, New York City Employees’ Retirement System, Teachers’ Retirement System and Board of Education Retirement System.

Each specifically asks a company to establish a committee of their Board of Directors to review their business ties to Iran with particular attention to potential financial and reputational risks.

“As shareholders, we are concerned that each Company’s business dealings in Iran could expose the Company to negative publicity, public protests, and a loss of investor confidence, all of which could have a negative effect on shareholder value,” the Comptroller said.

“U.S. law currently restricts trade and investment activity by American companies with countries that are designated by the U.S. State Department as sponsors of terrorism. While the sanction does not apply to the foreign or off-shore subsidiaries of U.S. corporations, so long as the U.S. parent companies are neither directly nor indirectly involved, we believe that American companies should nonetheless adhere to the spirit as well as the letter of the law.”

At the hearing Monday, Thompson stressed his support for the “Iran Counter-Proliferation Act of 2007,” legislation sponsored by Oregon Senator Gordon Smith that will close the loophole in Federal law that allows U.S. companies to act through foreign subsidiaries.

“While the companies we identified as doing backdoor business with state sponsors of terror have all signed letters of agreement with our office to end that practice, other companies could choose to engage in such dealings tomorrow or the next day.”

Comptroller Thompson began his second term as New York City’s 42nd Comptroller on January 1, 2006. Since taking office four years earlier, he has used the powers of his office to aggressively safeguard the City’s finances, seeking out savings and rooting out waste. As custodian and investment advisor to all five of the City’s pension funds, Thompson manages a combined portfolio of nearly $100 billion.

Thompson has been a leader among institutional investors in advancing important corporate governance and corporate social responsibility reforms such as the repeal of the classified structure of corporate boards and the annual election of directors, the establishment of a board protocol for addressing shareholder proposals that win majority votes, a prohibition against workplace discrimination based on sexual orientation and gender identity, the adoption of stronger standards of director independence for members of key board committees, as well as the adoption of standards for the protection of the environment and human rights globally. Thompson also worked with leaders of the financial services industry in bringing about reform at the New York Stock Exchange.

You can learn more about the Comptroller’s shareholder resolutions and efforts at www.comptroller.nyc.gov.