With the swipe of a pen, the student movement pushing for public pensions to divest in companies funding Sudan was victorious Tuesday as Gov. Arnold Schwarzenegger signed Assembly Bill 2941 into law.

The bill will force the country’s largest public pension funds, the California State Teacher’s Retirement System (CalSTRS) and the California Public Employees’ Retirement System, worth $360 million in combined assets, to divest in foreign companies that deal arms or conduct business with the Sudanese government.

The goals of the divestment are to deprive the Sudanese government of millions in capital and for California to send a message to Congress to act on the crisis, said Ian Lobel, a member of the Sacramento Committee on Conscience, a group that works to stop the Darfur conflict.

Under a banner with the declaration “Fighting Genocide,” the signing event hosted at the Burbank Hilton, included the Republican governor, Hollywood actors and divestment activists George Clooney and Don Cheadle, NAACP state President Alice Huffman, UC Divestment Task Force’s Adam Sterling and Assemblymen Paul Koretz, D-West Hollywood, and Jerome E. Horton, D-Inglewood.

“Here we speak as one voice to do what is right for the state and what is right for the world. And in Sudan and in the Darfur tragedy we are all united by our common humanity,” Gov. Schwarzenegger said. “It is clear to me we can’t turn a blind eye to any genocide. – Divesting will show our defiance against the murder and inhumanity.”

Catalyzed by the growing student movement toward divestment, 15 other states are at different stages of passing similar bills.

Lobel said since his generation grew up seeing the complacency of the Rwanda genocide and hearing phrases like “Never Again,” it feels a need act against Darfur’s slaughter of its own people. “It’s really the snowball effect we’re looking for,” Lobel said. “If it’s on the minds of the people in this country, then it’s on the minds of their leaders.”

Since 2003, the Darfur region has been embroiled in conflict, with nearly 400,000 killed and two million displaced, and violence is mounting, according to www.savedarfur.org. The United Nations puts the death toll at 200,000.

The conflict ensued when the Sudanese government-backed militia, the Janjaweed, responded to rebel groups in Darfur, composed mainly of blacks, demanding independence and democracy after years of political marginalization. The Khartoum regime responded with oppression, sending the Janjaweed, of mostly Arab descent, to target and kill civilians and ethnic populations that support the rebels, according to the website.

Sudan, a highly debt-ridden country, uses most revenue for military expenditures, and therefore needs the flow of money from companies to fund the ongoing violence, according to a Senate Rules Committee analysis on the bill.

Inspired by divestment laws passed in Illinois, New Jersey, Oregon and Maine, Lobel, who works for Assemblyman Horton, brought the idea of a California divestment bill to Koretz, who took up the cause.

The bill, which first called for a blanket divestment, was changed when the UC Sudan Divestment Task Force ?” a group of students who identified nine multinational companies doing business with Sudan and who prompted the University of California system to divest in March ?” got involved and tailored the legislation to exclude companies doing dealings outside the government.

During Tuesday’s event, Gov. Schwarzenegger also signed Assembly Bill 2941, by Assemblyman Tim Leslie, R-Tahoe City, which legalizes the UC’s decision to end its investments in nine offending companies.

“(Targeted divestment) is a unique way to go because it’s really focusing on those worst offenders; it protects more of the innocent civilians and it minimizes the potential for collateral damage,” said Adam Sterling, national policy director for the task force, in a telephone interview. “We want to make genocide expensive.”

Sterling, a UCLA graduate in African American studies and political science, was swept up in the movement after reading about the atrocities of the Rwanda genocide, and has conducted research to back up the mobilization.

In 2004, Harvard was the first to divest after the college paper exposed the school’s million dollar investment with a Chinese oil company, PetroChina Co., which has been recognized as a top offending company, Lobel said.

Following in Harvard’s steps, about 30 schools have voted to divest, including Stanford, Yale, Brown, Amherst, Dartmouth and the University of California system, which was the first public educational system to divest, Sterling said.

“Divestment is usually too big of a weapon to pull out of the arsenal,” Lobel said, but added that it’s necessary to encourage the international community to take action.

A May peace accord was reached between one rebel group and the government, and the U.N. demand for troops to enter the region hasn’t been enough to remedy the situation, Lobel said. The main supporters of the bill include the NAACP, the task force and the Committee on Conscience. The California Federation of Teachers also supports the bill.

“It really was one of those things where teachers are very conflicted because they had to wear ribbons during Red Ribbon Week, and then invest in these companies for their retirement,” said Karon Green, consultant for the Assembly Committee on Public Employees, Retirement and Social Security.

Green said the CalSTRS board felt sympathetic to the bill’s cause, but didn’t think the additional requirements of a law were necessary.

Both pension systems took a neutral stance on the bill.

On its own accord, CalSTRS voted to divest its $15.5 million in companies doing business in Sudan in April, said Patrick Cannon, assistant professor of government at Sacramento State.

The CalPERS trustees also banned investments in the nine countries identified by the task force even though the system didn’t have holdings in the companies.

Mandating divestment will set an important precedent and will influence financial markets, Cannon said.

The bill requires the public pension systems to find and report companies that are doing business in Sudan and allows time for those companies to take action before being divested, according to the bill.

A later amendment of the bill ensures California will pay for any lost funds due to divestment, Sterling said, but added that this would be rare since the divestment wouldn’t block out a whole sector, just individual companies.

Divesting in unstable areas isn’t a new idea, as the largest divestment movement happened in the 1980s and helped to unseat the South African apartheid regime.

Cannon said at the movement much of the leading multinational corporations divested, contributing to the end of the apartheid.

“It took a few college kids to kind of step in to fill that void,” Sterling said. “We’ll see how it plays out.”

Jessica Weidling can be reached at [email protected]