- The Washington Times - Friday, November 26, 2004

Several U.S. cities continue to set their own foreign policy in the form of economic sanctions against countries with “oppressive regimes” despite a 2000 Supreme Court decision outlawing such action.

In Quincy, Mass., a 1997 ordinance penalizes companies seeking city contracts if they conduct business in Burma. Although the ordinance is still on the books, it “is probably not known to anyone at this point,” said David Murphy, director of operations in the mayor’s office. “Technically, it could still be used.”

In Berkeley, Calif., anyone conducting commerce with Tibet cannot win city business under a seven-year-old provision passed by the City Council.

In the enclave of West Hollywood, where the City Council has a history of passing ordinances scolding companies and at one point banned Salvation Army holiday bell ringers, no company honoring the Arab League boycott of Israel can expect to sign a city contract.

“We’ve tried to get these ordinances clarified or removed,” said Phil Rice, manager of business development for the Organization for International Investment, which represents the U.S. subsidiaries of international companies. “But in some cases, these cities felt their sanctions were a little different than the ones prohibited by the Supreme Court. We feel that the court’s ruling, though, made all sanctions unconstitutional.”

In 2000, the Supreme Court ruled unconstitutional a Massachusetts law prohibiting state agencies from contracting with companies doing business with Burma unless that company’s bid was 10 percent lower than all competitors. The high court ruled that the law infringed on the federal government’s authority to set U.S. foreign policy.

After the ruling, a host of cities, including Oakland, Calif.; San Francisco; Los Angeles; Boulder, Colo.; and Takoma Park rescinded their sanctions, most of which involved Burma and Nigeria.

“While most of these were removed, there was a small group of cities that threatened that they would still enforce their sanctions ordinance,” said Haynes Roberts, project manager for USA Engage, a group that fights unilateral economic sanctions by all levels of government. “My guess is that it would take a lawsuit to go in and force them to comply.”

West Hollywood’s provision against the Arab League’s boycott of Israel is stated in one sentence: “The contractor hereby affirms that it does not honor the Arab League boycott of Israel.”

“We have never had anyone come along who has said that it could not meet that provision,” said city attorney Mike Jenkins, who also noted that the city, in keeping with the 2000 court ruling, rescinded its policy affected those trading with Burma.

He added that the provision regarding the Arab League boycott goes back at least a decade and agreed that it is a form of sanction, “in the sense that it says that we will not contract with you if you honor the boycott. But it is also in keeping with U.S. policy.”

In Berkeley, where a city resolution supporting Israeli divestment two years ago was killed after rancorous protests from Jewish groups, the resolution prohibiting contractors from doing business with Tibet is still active and part of the city’s business.

“We’ve had no problems with people signing the materials that are included in our personal-services contract,” said Arietta Chakos, chief of staff for the city manager’s office. “We ask that people who do business with Tibet not do business with us.”

In the mid-1980s, states and small towns passed resolutions penalizing any company doing business with the apartheid government of South Africa. But many saw them as toothless, feel-good measures that had no effect on U.S. foreign policy, which strongly opposed South Africa’s system.

Once the sanctions are in effect, the image can be hard to erode, regardless of repeal. In the long run, companies tend to avoid doing business with a city that has lingering policies, even if that company can provide a service at a good price.

“It’s easier to put sanctions on than to take them off,” said Dan O’Flaherty vice president of the National Foreign Trade Council, a plaintiff in the court case against the state of Massachusetts. “The long-term effect of sanctions is more severe than you might think. During the apartheid struggle in South Africa, over 250 American firms left South Africa. And only 60 have gone back.”

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