Residents of the state of Wyoming know a thing or two, more like several billion dollars a years worth of knowledge, when it comes to international trade. On January 17, 2017, several influential members of the Wyoming legislature filed a bill that reinforces American values by “prohibiting the investment of Wyoming state funds Iran or Cuba.” Over the long run, such investments are bad for America, bad for Wyoming, and simply bad for business. In other words, Wyoming taxpayers are sending a clear message that they will always drink upstream from the herd.
The legislation (HB 0146) is sponsored by Representatives Chuck Gray, Dennis Biteman, Roy Edwards, Mark Jennings and Lars Lone as well as Senator Curt Meier. If HB 0146 were enacted, it would prohibit the spending of Wyoming taxpayer funds in any security (i.e., stocks, bonds, mutual funds, etc.) that invests or does business with Cuba or Iran. The investment ban would not apply to investments in an entity that promotes journalistic or religious activities in Cuba or Iran; this exception is consistent with long-standing U.S. law and policy. HB 0146 text is embedded at the end of this post.
Access to the U.S. market, is a privilege not a right. This access takes many forms including access to the U.S. financial system, access at U.S. ports or U.S. visas, and indirect access such as benefits from investments by third parties in business activities in Iran and Cuba. State legislative measures and laws such as HB 0146 are an important way for Americans to express their values and help advance U.S. national interests. They help block economic benefits that could accrue to rogue regimes such as Iran, Cuba, or North Korea, from direct or indirect foreign investments.
According to the non-profit organization United Against Nuclear Iran (UANI), close to 30 states that have adopted or are considering implementing similar legislation. UANI has an extremely effective campaign underway to deploy these and other divestiture or contracting prohibition laws also known as secondary level sanctions, particularly as these efforts apply to Iran. These sanctions complement federal sanctions programs authorized by the U.S. Congress and/or put in force by the executive branch.
Opponents of secondary level sanctions, such as the Obama administration and other special interests groups, argue that these laws are unconstitutional, unlawful, or otherwise somehow interfere with U.S. foreign policy; however, the courts have ruled otherwise. State taxpayers can direct how state funds are invested in state pensions. State taxpayers can also opt to do business with companies that avoid high-risk markets such Cuba and Iran. Secondary level sanctions, in my book, to the extent that they complement U.S. law and do not infringe on the federal foreign policy powers, are constitutional and help advance U.S. national interests and American values.
If you want to do business in Wyoming, this law says the state is open for business so long as you’re not doing business with certain state sponsors of terrorism, WMD or nuclear proliferators, as well as select serial abusers of fundamental freedoms.
For example in the case of Cuba the Wyoming measure, and others like it, can serve as a catalyst to compel Cuba to compensate Americans for unlawful property confiscations. Cuba owes billions of dollars to scores of American families and corporations whose homes, businesses, lands, artwork, and other property were confiscated, stolen, or looted during the Communist takeover of Cuba in the 1960s. Under well settled international norms and practice, as well as U.S. law, when a foreign nation does this to an American citizen the foreign nation must compensate the victims.
These unlawful takings and expropriations were designed to purge people of certain ideological leanings, including Americans, who refused to go along with the Communist takeover. Since the Cold War, again for purely ideological reasons, Cuba has refused to pay Americans, mostly families, owed billions in principal and interest. By the way, private property remains illegal in Cuba and the Communist government continues to use property as a political weapon against its people.
If Cuba wants less economic sanctions as well as to foster better long-term relations with U.S. taxpayers, among other things, Cuba must pay American taxpayers what it owes them. By requiring payment of property claims as a precondition for access to the U.S. market, it telegraphs to the world, as well as potential property confiscators that, sooner or later, American taxpayers will be made whole for these sort of wrongful acts. And so long as they refuse to pay, Americans will find ways to hold them accountable by imposing federal, state, and local restrictions that help advance these values.
These Wyoming legislators are doing what the Obama administration should have done when it engaged with Cuba in the first place: HB 0146 puts U.S. interests and values first.