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California vs. Sudan

September 14, 2006

THE GOONS WHO RUN SUDAN have proved deaf to appeals from the Western world that they stop slaughtering tribespeople in Darfur. The only change in attitude produced by years of diplomacy has been a shift from sullen foot-dragging to open defiance. The best response, short of intervention, is to hit them harder in a place that will really hurt: their wallets. The state of California is poised to do just that.

On Gov. Arnold Schwarzenegger's desk is a bill patterned on a divestment program approved this year by the University of California. It directs the boards of the two large state retirement funds to identify companies in their investment portfolios that do significant business with the government of Sudan or sell it the weapons used to cut a bloody swath through Darfur. The boards then must notify these companies that they have 90 days to end their involvement with Sudan. If they don't, or fail to respond, the pension funds must divest.

Five states have passed similar divestment plans, two more have nonbinding resolutions and about 15 others have legislation pending. Not all have handled the matter well. First off the divestment block was Illinois, which passed an absurdly broad law forbidding state investment in any company with ties to Sudan, no matter how remote. The law is so all-encompassing that it applies to U.S. companies such as Coca-Cola and Xerox, which have no direct business with Sudan. (In fact, Americans have been forbidden to do business directly with Sudan since 1997.)

California's AB 2941 avoids the Illinois law's pitfalls. It applies only to those companies identified as the worst offenders, all of which are foreign -- mainly Chinese -- and are well known to have deep financial ties to Khartoum while bringing little benefit to the Sudanese people.

The United Nations has been powerless to halt a government-sponsored program of murder and rape in Darfur that President Bush has rightly labeled genocide. Although the Security Council on Aug. 31 approved a resolution calling for a U.N. peacekeeping force for Darfur, it can't be deployed without permission from the Sudanese government, which refuses to grant it. The crisis is coming to a head because the only peacekeeping force now in the country -- 7,000 troops from the African Union -- will see its mandate expire at the end of this month.

It's unknown how much money California stands to divest under AB 2941, but it's thought to be in the hundreds of millions of dollars. That might be enough to make Khartoum, and the Chinese interests that do business there, stand up and take notice.

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