Campaigners braced for defeat on US stock sanctions

Legislation pushed for by human rights groups, which would close US stock exchanges to foreign companies investing in Sudan and other countries already the target of trade and investment boycotts, was in deep trouble as a result of heavy lobbying from financial services firms, ‘The Washington Times’ newspaper reported on 3 April. After initially shrugging off a House of Representatives vote in favour of the “Sudan Peace Act”, the Bush administration now seemed determined to kill the sanctions included in the bill, according to internal administration documents and industry lobbyists cited by the newspaper.

In June, the House voted 422 to two in favour of a bill designed to increase pressure on the Sudanese government by specifying that no foreign company should be allowed to raise money in the US, or continue an existing public listing, while doing business in Sudan. If enacted, the bill would oust Talisman Inc of Canada, China’s PetroChina, and other firms from the New York Stock Exchange; American companies are already barred from trading with or investing in Sudan by presidential executive orders.

However, the US Senate passed a version of the bill without the sanctions, and the administration of President George W. Bush was preparing to lobby against the sanctions, according to an internal memorandum cited by ‘The Washington Times’ on 3 April. The administration was “concerned that the imposition of the sanctions and restrictions on capital markets at this time will not advance the search for peace, will exacerbate our problems with the Europeans [some European companies are investors in Sudan], and will complicate [diplomatic] efforts”, the report quoted the document as saying. US Federal Reserve Chairman Alan Greenspan said in congressional testimony last week that “the clear outcome of such a law would effectively be to move financing from New York to London”, the paper reported. “If we move in directions which undermine our financial capacity, we are undermining potential long-term growth of the American economy,” Greenspan added.

Roger Robinson, chairman of the William J. Casey Institute, which had lobbied hard for the bill, admitted to campaigners last week that the sanctions “may fall victim to this coordinated political onslaught”, the ‘Washington Times’ reported. Michael Horowitz, a former Reagan administration official also involved in the fight, said the financial services lobby was succeeding in defeating the sanctions, but predicted the rest of the bill would pass.