For at least a year, the city had been using its pension fund coffers to try to change the practices of companies that have business ties to “rogue states.”

According to the city comptroller, William Thompson, the campaign is working. He announced yesterday that Cooper Cameron Corporation, a Texas based manufacturer of oil and gas pressure-control equipment, has agreed to divest from a business venture in Iran. This follows a shareholder resolution by the city’s pension funds, Mr. Thompson said.

The resolution, which expressed concern over business deals with a terror supporting nation, was filed late last year by the New York City Police Pension Fund, the Fire Department Pension Fund, the New York City Employees’ Retirement System, the Teachers’ Retirement System, and the Board of Education Retirement System. The proposal was also filed with General Electric and the Aon Corporation.

“Our fire officers are on the front line of the potential terrorist threat that exists in the U.S.,” the president of the Uniformed Firefighters Association, Peter Gorman, said in a statement. “We applaud Cooper Cameron and the other companies that have agreed to sever ties with Iran and view their action as a demonstration of principal and support for our members.”

“New York City is the leader in this field,” the chief operating officer of the Conflict Securities Advisory Group, Adam Pener, said. (The firm specializes in research on global risk management.) “Pension systems have the power to change business practices.”

A report released by the Conflict Securities group, which has been providing the city with information on its investments for over three years, found that a British subsidiary of Cooper Corporation, Cooper Cameron UK, was a 50% owner of an Iranian oil business, Sherkate Mohandesi Hafar Chah Jonoob. The report also found that Cooper Cameron UK had done business with the Iranian Offshore Engineering and Construction Company, which is wholly owned by the Iranian government.

The five pension funds hold 1.9 million shares of Cooper Cameron worth more than $52 million.

“I hope Cooper Cameron’s decision will encourage other companies to thoroughly examine their relationships with rogue nations,” Mr. Thompson said. “While the sanction does not apply to the foreign or offshore subsidiaries of U.S. corporations … We believe that American companies should nonetheless adhere to the spirit as well as the letter of the law.”

Federal law restricts trade by American companies with nations the State Department designates as “sponsors of terrorism.” Loopholes allow “independent foreign subsidiaries” of American companies to conduct business with countries like Iran, Syria, and North Korea. Mr. Pener says his company profiles 400 companies who do business in terror-supporting states.

Divestment campaigns are cropping up around the country and many recognize the power of a large-scale institutional investor like a public pension systems. Just last month, General Electric announced that it would cease doing business in Iran – prompted by the shareholder resolution from the city’s pension funds who hold roughly 33.2 million shares of General Electric worth close to $1.1 billion.

Additionally, the Fire Department, Police, and Board of Education Pension Funds petitioned the Halliburton Company, which opened a Cayman Island based business with headquarters in Dubai in February 2000. The business, Halliburton Products and Services Ltd. earns between $30 and $40 million annually from it’s work in Iran, though this accounts for less than half of 1% of the Halliburton Company’s total revenue, according to a spokeswoman for Halliburton, Beverly Scippa.

“It sounds like a headline writer grabbed two words that would make headlines – Halliburton and Iran – and tried to create an impression of wrongdoing. That’s just not the case.”