McCain, Obama funds invest in firms working in Iran

John McCain and Barack Obama have urged investors to steer clear of Iran, but their family investments include mutual funds with shares in companies doing business in the oil-rich country, their financial disclosures show.

Obama decided to sell his mutual fund investment after USA TODAY asked about it Monday, spokesman Ben LaBolt said.

Tucker Bounds, a spokesman for McCain, said McCain's wife, Cindy, once controlled three such mutual funds but sold two of them. He did not say when the sales took place.

All three were held in trust for the McCain children. The third fund has not been sold, Bounds said. "We're reviewing it and evaluating the best course of action," he said.

McCain, the presumptive Republican presidential nominee, raised the investment issue Monday in a speech to the American Israel Public Affairs Committee. He called on corporations and government institutions to pull their money out of Iran.

"As more people, businesses, pension funds and financial institutions across the world divest from companies doing business with Iran, the radical elite who run that country will become even more unpopular than they are already," McCain said.

A trust for the McCain children, a fund controlled by Cindy McCain, had between $315,000 and $650,000 in three JPMorgan mutual funds with investments in companies doing business with Iran, according to John McCain's 2006. disclosure report, the most recent available.

JPMorgan's website shows that each fund's top investment is with an oil company that works in Iran: Total SA of France for the firm's International Equity Fund; Eni SpA of Italy for the International Equity Index Fund and Petroleo Brasileiro SA of Brazil for the Emerging Markets Equity Fund. All three firms list their operations in Iranian oil fields in their latest annual reports.

Last month, Cindy McCain sold about $2 million worth of shares in two other mutual funds that invested in companies doing business in Sudan, which the Bush administration has accused of genocide. Obama sold his stakes in similar Sudan-related mutual funds last year.

Obama had about $120,000 invested in the Vanguard Wellesley Income Fund, Labolt said. The fund owns shares of three oil companies doing business in Iran: Total, BP PLC and Royal Dutch Shell PLC. Obama's sale of that investment will be effective Tuesday, LaBolt said.

Obama has called for divestments in Iran-related companies and sponsored legislation last year that would make it easier for states to divest their pension funds from companies that support Iran's oil and gas industry. The measure would require the Treasury Department twice a year to release a list of firms doing more than $20 million in business in Iran's energy sector.

Obama's rival for the Democratic nomination, Hillary Rodham Clinton, has her assets in a blind trust, meaning she has no knowledge of or control over the investments.

Federal law prohibits U.S. companies from doing business with Iran. Companies based overseas do not have the same restrictions.

Several states have moved to drop pension fund investments in companies with Iranian operations. The latest was McCain's home state of Arizona, where Democratic Gov. Janet Napolitano signed a law May 23 requiring state pension and investment funds to unload any Iran-related investments.

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