Illinois law against Sudan struck down

A federal court in Chicago has struck down an Illinois law aimed at pressuring Sudan to end human rights violations in the Darfur region.

The law bars the deposit of Illinois state funds in any financial institution that does not certify that neither the institution nor its borrowers do business related to Sudan. In addition, the law bars public pension funds from investing in companies with commercial connections to that country.

Illinois officials have not decided whether they will appeal the decision, which may have implications for other similar laws in place or in the works in other states.

In his Feb. 23 ruling, U.S. District Judge Matthew F. Kennelly found that the provision of the Illinois law dealing with the deposit of state funds interferes with the federal government’s constitutional right over conduct of foreign affairs and that the pension language is unconstitutional because it interferes with Congress’ authority over foreign commerce.

Judge Kennelly’s decision makes clear that “you cannot punish banks because of the activities of their customers at the state level,” according to William A. Reinsch, president of the National Foreign Trade Council, which filed the suit against the state.

Mr. Reinsch said other states with similar laws aimed at Sudan include Louisiana, California, Oregon, New Jersey, Connecticut and Maine.

A rebellion broke out in Darfur in 2003, and attacks on civilians by government-backed militias have led to tens of thousands of deaths there.

A case could be filed next against New Jersey because its law resembles that of Illinois, he said, although whether that happens depends on whether Illinois appeals last week’s ruling.

In Wisconsin, the sponsors of a Sudan divestment bill being introduced said their measure would not be affected by the ruling.

Democratic state Rep. Frederick P. Kessler and Republican state Sen. Sheila Harsdorf said Monday that their bill “has been reviewed by legal experts and is constitutional.”

The two said the Illinois bill targeted more than 160 companies doing business in Sudan, including some companies exempt from U.S. sanctions, as well as banks doing business with companies in Sudan.

The Wisconsin bill, which has been introduced in the state Senate and will be introduced in the Assembly, “is compatible with U.S. foreign policy,” the two lawmakers said.

“This bill,” they said, “will prove to be constitutionally legal, as opposed to the faulty Illinois legislation.”