27 September 1997
The New York Times
By Lynette Holloway

Vallone Softens Measure On Religious Persecution

Under pressure from some of the city's most powerful business leaders, Peter F. Vallone, the City Council Speaker, is planning to scale back a measure that would bar the city from doing business with companies that operate in 15 countries where he said he believed that Christians are being persecuted.

Mr. Vallone angered the city's business leaders in May when he introduced the proposal that calls for the city to withdraw deposits and investments from banks and other enterprises that do business with the 15 countries, which include China, Egypt, Indonesia and Saudi Arabia. Mr. Vallone said that the countries named in the bill imprison, torture, enslave or kill Christians for practicing their faith, and the city should use its economic might to stop the persecution.

Now Mr. Vallone is planning to soften the measure and propose that companies follow a system of anti-discrimination guidelines, or a code of conduct like the MacBride Principles, which the city subscribes to, he said. The MacBride Principles are an effort to discourage investment in companies that discriminate against Roman Catholics in Northern Ireland.

The original proposal would have barred the city from doing business with companies like American Express, Chase Manhattan, Merrill Lynch, Time Warner, Salomon Brothers and Rudin Management.

Business leaders complained that they were being unfairly singled out, and they vowed to lobby against the bill. Their effort to stop the proposal is led by the New York City Partnership and Chamber of Commerce, which represents 700 businesses in the city.

The group recently formed Don't Sanction New York, a loose coalition of about 20 business leaders, to fight the proposal, saying the city's economy could be devastated if businesses were forced to choose between their global markets and their New York City contracts.

Last week, Mr. Vallone received a letter from the chamber signed by 31 of the city's most prominent business leaders, including Lewis Rudin of the Rudin Management Company and Richard D. Parsons, the president of Time Warner. The letter said that the measure had painted New York as ''an unfriendly and unpredictable place to do business.''

With the backing of Mr. Vallone, the revised bill is likely to make its way through the City Council and onto the desk of Mayor Rudolph W. Giuliani, who has said he supports the intent of the proposal but needs to study the full scope of the problem and the effect the bill would have on businesses.

Mr. Vallone said that his willingness to cooperate with businesses should not be viewed as buckling under pressure, and he added that his intent from the start was to begin a dialogue on the issue. ''Anybody that knows me on any matter knows that I'm willing to hear them out,'' he said. ''From the beginning I said that it would be a fact-finding bill, and we're still in the process of gathering evidence.''

But even the suggestion of a watered-down version of the bill is meeting some resistance.

''Even my sixth grader resents a code of conduct,'' said Robert R. Kiley, president of the New York City Partnership and Chamber of Commerce. ''What does that mean? A Ten Commandments for businesses, the Justinian Code, the Napoleonic Code? He should lay out a series of principles that businesses will respect, but a code of conduct has a whole different kind of ring to it. I don't think it goes down too well.''

Hearings on the bill are scheduled for October.

The bill also singles out Cuba, Iran, Iraq, Laos, Pakistan, Morocco, Nigeria, North Korea, the Sudan, Turkey and Vietnam.

For years, the Council has used its political might to denounce oppressive regimes abroad, issuing resolutions and proclamations largely to placate the city's immigrant population. But in recent years, the Council has tried to put economic force behind those measures. In May, citing human rights violations, it enacted a law that bars the city from dealing with companies that do business with the military regime in Myanmar. For years, the city's municipal pension fund has been among the investors that subscribe to the MacBride Principles, and in the 1980's, the City Comptroller, Harrison J. Goldin, successfully worked to have city pension funds divest themselves of investments in companies doing business in South Africa.

Chris Meyer, executive director of the New York Public Interest Research Group, said he was not surprised that Mr. Vallone had softened his stand on the bill. Mr. Vallone usually takes a hard-line approach at the start of most legislative battles, Mr. Meyer said.

''In the beginning, he lays out the hardest position, then softens after negotiations and hearings,'' Mr. Meyer said. ''Then, it gets a little harder on the third round. I've seen him do it on the city's tobacco legislation. It's all a part of the legislative process.''

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