US House panel chair probing Bush proviso on Sudan

By Susan Cornwell

WASHINGTON (Reuters) - A senior U.S. lawmaker said on Friday that he would hold a hearing on whether President George W. Bush had undermined a new law designed to promote divestment from Sudan by expressing reservations about it as he signed it.

Rep. Barney Frank said the February 8 hearing will focus on the "negative implications" of the statement Bush issued late last year, as he signed the new law allowing state and local governments to divest from companies doing business with Sudan.

In a document called a "signing statement," Bush expressed concerns that the law could interfere with his right to direct foreign policy, and said he would not allow it to do so.

"As the Constitution vests the exclusive authority to conduct foreign relations with the federal government, the executive branch shall construe and enforce this legislation in a manner that does not conflict with that authority," Bush said in the statement.

The February 8 hearing will be held by the House of Representatives Financial Services Committee, which Frank chairs. Frank plans to call witnesses from the grass-roots organizations that had sought the legislation.

"We will have people from the (Save) Darfur movement, who will say, he's undercutting the very reason we wanted the bill," Frank, a Massachusetts Democrat, told Reuters.

The legislation was aimed at pressuring Sudan to end the violence in the Darfur region, where 200,000 people have been killed and 2.5 million displaced in a four-year conflict that Bush calls a genocide.

Some 20 U.S. states have initiated divestment efforts because of the conflict. But the effort in Illinois was challenged in court, so the new law seeks to provide a legal framework for state and local governments, mutual funds and pension funds to divest from companies involved in Sudan's oil, mining, power and arms industries.

"The purpose (of the law) is to tell people they can go ahead and divest, without fear of being sued," Frank said.

But, he said, if Bush reserves the right to overrule the law, people will still be afraid to divest in companies that do business with Sudan.

Bush has frequently used signing statements to express reservations about laws. Some of his critics have argued that he has used them to expand presidential powers.

U.S. companies are generally barred from investing in Sudan already, so the divestment mostly affects foreign companies.

The Save Darfur Coalition, an alliance of more than 180 faith-based, advocacy and human rights organizations, has asked investors to divest their holdings in companies such as Malaysia's state-owned Petronas, India's Oil and Natural Gas Corp Ltd, and PetroChina Co Ltd, whose parent company, China National Petroleum Corp, is helping Sudan drill for oil.

© Reuters 2008. All Rights Reserved. | Learn more about Reuters