The day after President Bush announced he was lifting U.S. sanctions against South Africa last month, Mayor DAvid N. Dinkins of New York City stepped up his efforts to pressure the South African government to eliminate all vestiges of apartheid.
The mayor's action was an example of how most state and local governments are not backing down from their antiapartheid policies.
State and local government officials surveyed by The Bond Buyer said they think the federal government's action was premature, and they added that they had no plans to change laws put on the books to bar their localities from having dealings with firms that do business with South Africa.
Given the difficulty of implementing and interpreting complicated South Africa ordinances, the officials said, no one wants to undo the rules only to revive them if apartheid lingers on in South Africa.
Most of the officials, many of whom belong to minority groups or represent cities and states with large minority populations, sought the laws to combat apartheld from these shores by withholding support from companies or securities firms doing business in South Africa.
The lifting of U.S. sanctions also is not expected to change the antiapartheid policies of a number of securities firms that are already hired or are seeking work as bond underwriters, pension managers, investment advisers, or financial advisers to these municipalities.
But now that Washington has signaled its shift on South Africa, state and local governments may face more difficulty in maintaining their sanctions policies.
President Bush lifted sanctions imposed on South Africa, dating from 1986, on July 10. The sanctions had included barring new investment in South Africa, landing rights in the United States for its airlines, and imports of iron, uranium, coal, textiles, agricultural products, and military equipment.
At a press conference following President Bush's policy announcement, Herman Cohen, the State Department's top Africa expert, outlined a possible response on the federal level to state and local governments that continue to enforce sanctions laws.
"We would like very much for them to follow what the federal government has done," Mr. Cohen said. He added that the Justice Department is considering possible legal action against any localities that retain sanctions, citing that states and cities are not permitted to conduct foreign policy in competition with the federal government.
A spokesman for the Justice Department did not return phone calls.
For the moment, neither this threat or the President's lifting of sanctions has dampened the determination of state and local officials to keep up the pressure on South Africa.
New York City's Mayor Dinkins said, "Apartheid is evil and has no place among nations. While the Bush administration believes the end of apartheid is near and the time has come to lift U.S. sanctions against South Africa, I am proud that New York City is moving forward with plans to put in place a set of regulations that is so broad in spectrum and far-reaching in inquiry."
Mayor Dinkins announced the release of a comprehensive list of rules to evaluate how banks in which the city has deposits are working to eliminate apartheld. The new list of rules governing the city's relationship with banks would establish criteria for city agencies to review and rate a bank's policies toward South Africa.
In Atlanta, city officials remain opposed to changing the policy that bans doing business with South Africa-related companies.
"Mayor [Maynard] Jackson has been pretty adamant in maintaining the policy given the fact that many of the structures of apartheld are still in place -- particularly those denying all citizens equal voting rights," said Debra Speights, the mayor's spokeswoman.
Similarly, New Orlean's Mayor Sidney Barthelemy has not considered revising his city's policy on rejecting South African-related businesses. "Things have not really changed [in South Africa], so the mayor's position has not changed," said Jinx Broussard, Mayor Barthelemy's press secretary.
A finance officer of San Francisco city and county -- who asked not to be identified because he cannot speak for local supervisors -- said, "there's no talk that I've heard of" to undo San Francisco's South Africa ordinance. His sense is that "it's premature until blacks in South Africa are given the vote" and the country has "a full-fledged democracy."
Los Angeles has one of the nation's strictest policies on South Africa. David Brodsly, a senior administrative analyst for the city, said, "I would be very surprised" If the city council took any steps to ease its ordinance.
In the District of Columbia, two laws govern transactions with firms doing business in South Africa.
One prohibits investments of city funds in companies that do business in South Africa. The other, which addresses city purchases, penalizes bids made by firms with links to South Africa.
Ellen M. O'Connor, the district's deputy mayor for finance, said those laws are on the books and will continue to guide the city's actions unless the Council of the District of Columbia strikes them. So far, no action appears likely.
In Chicago, where the city council passed an ordinance last year prohibiting the city from entering into bond-related contracts with firms providing professional services to South Africa or any South African business, there are no plans to "rescind or change our current ordinance," according to Carolyn Grisko, a spokeswoman for Mayor Richard Daley. Chicago's ordinance also requires firms to certify through an affidavit that they meet the city's antiapartheid requirements.
Pennsylvania has no plans to change its policy that underwriters must be be free of ties to South Africa, according to Mike Arpey, a spokesman for Treasurer Catherine Baker Knoll.
The policy is based on the Sullivan Principles, a set of guidelines governing labor practices of American corporations with operations in South Africa. They were established by Rev. Leon Sullivan of Philadelphia.
The state's largest city, Philadelphia, passed an ordinance in 1986 that also bars doing business with such firms. The law requires local banks in which the city deposits money to certify each year that they have no link to South Africa, and city officials say there are no plans to change that policy.
Oregon has taken a step that would allow it to track the latest federal action. Oregon has a law in place for its pension funds that requires complete divestiture of South Africa-related investments by February 15, 1992. But under new legislation approvedd recently, the divestiture requirement will be "sunsetted" and removed if the federal government does lift economic sanctions.
Although New Jersey has strict laws prohibiting investments in companies that do business with South Africa, there are no specific regulations extending that policy to bond underwriters, according to Amy Collings, a spokeswoman for Treasurer Douglas C. Berman. Ms. Collings explained the state determined it would be too difficult to enforce such a law.
Business relationships with South Africa proved to be stumbling blocks for many securities firms seeking work with state and local governments that opposed ties to South Africa. Many of these firms terminated business relationships or trading activities connected to South Africa to get underwriting or financial advisory positions.
J.P. Morgan Securities Inc., for example, in April ran into trouble when seeking a berth on a Massachusetts syndicate. The firm is a subsidiary of New York-based J.P. Morgan & Co., which had holdings in South African interests through purchases of American Depository Receipts backed by South African securities. The firm stopped trading these securities when opponents of apartheid publicly raised the issue, threatening their future as a bond underwriter for bond issuers, such as New York City.
