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Prof. Jeffrey Sonnenfeld testifying before Congress.

Prof. Jeffrey Sonnenfeld Testifies to Congress on Withdrawing Investments from Russia

Jeffrey Sonnenfeld, the Lester Crown Professor in the Practice of Management and Yale SOM’s the senior associate dean for leadership studies, testified before a House of Representatives subcommittee on November 15, answering questions about the flow of U.S. investment to Russia and other adversaries.

Sonnenfeld testified before the Investor Protection, Entrepreneurship, and Capital Markets Subcommittee of the Committee on Financial Services, at a hearing titled, “Investing in our Rivals: Examining U.S. Capital Flow to Foreign Rivals and Adversaries Around the World.”

Introducing Sonnenfeld, Representative Jim Himes of Connecticut said, “He has in the last several months been an extremely aggressive leader on pushing corporate America in his guise as a professor of leadership to reflect on the values that corporate America and corporations around the world demonstrate if they make the decision to continue to work in the nation of Russia and to continue to be part of the economic engine which drives the authoritarian brutality that we see in Ukraine. We’re deeply grateful for to Dr. Sonnenfeld for doing that.”

In his opening statement, Sonnenfeld described the efforts of his team to track companies withdrawing from Russia and argued for the effectiveness of both sanctions and voluntary corporate exits in damaging the Russian economy.

“Working with 45 volunteers with great mastery in the languages of the countries we were studying, we wound up being the first to puncture Putin’s propaganda that fooled many in this town,” he said. “Virtually everybody in my field in academia, macroeconomists of every school, and the International Monetary Fund believes Putin’s propaganda that these corporate exits didn’t matter. They had an enormous impact. And we are the first to reveal that Russia’s economy was not resurgent but imploding.”

Responding to a question from Representative Sean Casten of Illinois, Sonnenfeld emphasized the importance of the private and public sectors working together to isolate international bad actors.

“When we’ve seen disappointments in economic blockades in Cuba or North Korea or Iran, it’s because, in fact, we didn’t have the sectors working together,” he said. “[In apartheid-era] South Africa, for example, there were sanctions passed by our government—I think a 77 to 22 vote that Senator McConnell actually led the override of President Reagan’s veto on it. It still wasn’t enough. It took 200 companies to voluntarily pull out. That was the high-water mark then, and that was independent of the sanctions… We’ve never seen anything like this in world history, to have 1,200 companies voluntarily pull out [as they have from Russia].”

Watch Sonnenfeld’s testimony: