Law to limit investment in Sudan

CRAWFORD, TEXAS — President Bush signed legislation Monday intended to restrict U.S. investment in Sudan, despite his administration’s concern that it improperly gives state and local governments a hand in foreign policy.

The House and Senate, ignoring the administration’s objections, approved the bill unanimously, and Bush signed it at his home near here. But the president reserved the right to enforce it “in a manner that does not conflict” with the federal government’s authority to conduct the nation’s dealings with other countries.

At the same time, he pledged that his administration would “continue its efforts to bring about significant improvements in the conditions in Sudan” through sanctions and high-level diplomacy and by supporting peacekeepers in Darfur.

“I share the deep concern of the Congress over the continued violence in Darfur perpetrated by the government of Sudan and rebel groups,” Bush said in a written statement.

The violence in Darfur, in which non-Arab rebels are fighting the Khartoum government and Arab militias, is in its fifth year. It has taken an estimated 200,000 lives and forced at least 2 million people from their homes.

The dispute with Congress was one of several troublesome issues, in addition to Iraq and Afghanistan, dogging the White House as the new year arrived.

At the same time as he noted Bush’s statement on the Sudan measure, White House Deputy Press Secretary Scott Stanzel drew attention to a State Department declaration that North Korea had failed to meet the Dec. 31 deadline established with its negotiating partners to disclose details of its nuclear weapons program.

In addition, the administration sought to press Pakistan after last week’s assassination of opposition leader Benazir Bhutto to set and stick to a specific date for elections, and offered U.S. assistance in investigating the assassination. The careful path the administration is treading reflects the importance it attaches to stability in Pakistan, a key ally in the fight against Al Qaeda and Taliban fighters along the border with Afghanistan, while also seeking to encourage the nation to move toward democracy.

The president’s concern over the Sudan measure centers on a provision that allows state and local governments, as well as mutual funds, private pension funds and other private investment groups, to divest from companies doing at least $20 million in business with mining, oil, power and military-equipment industries in Sudan.

The Save Darfur Coalition and other Darfur activist groups have said the legislation “presents a stark choice: Stop enabling genocide in Darfur or lose our business. The people of Darfur cannot afford an empty ‘law on the books,’ which is why the president must vigorously enforce this critical legislation.”

The activist groups said that nine companies -- among them Swiss energy company ABB, German engineering giant Siemens, Rolls Royce and Netherlands Antilles oil firm Schlumberger -- had “ceased operations in Sudan or significantly changed their behavior” since the legislation was introduced. Since 2005, 22 states and more than 50 universities have adopted Sudan divestment policies, they added.

The new law shields governments and private investment firms from investors’ lawsuits if they get rid of shares in the companies, and also prohibits the federal government from giving contracts to the firms. The provisions concerning state and local governments were the ones that raised constitutional issues.

Bush said that such decisions by state and local governments “could interfere with implementation” of U.S. foreign policy -- a role, he noted, that the Constitution assigns to the federal government. The Justice and State departments raised these concerns in letters to Republican and Democratic leaders this fall.

Asked whether that meant Bush would ignore or try to circumvent the provisions with which he disagreed, Stanzel said, “Well, yes, to the extent that actions taken interfere with the federal government’s foreign policy aims.”

He said the president signed the bill because “we support the overall goal and we support efforts to address the problem in Darfur, in Sudan.”

james.gerstenzang@ latimes.com