Pension Fund TIAA-CREF Declines to Vote for Israel Boycott
by Joshua Levitt
The Boycott, Divestment and Sanctions movement suffered a major defeat on Thursday when Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF) said it will not bring a BDS motion to its upcoming shareholder meeting.
The asset management giant, which manages $520 billion in pension funds, received approval from the Securities and Exchange Commission (SEC) to “take no action” on a submission by the BDS activists. This followed a warning issued to the company by Shurat HaDin, an Israeli civil rights group, that passage of the resolution would violate New York and Federal law.
Nitsana Darshan-Leitner, director of Shurat HaDin – Israel Law Center,
said her group discussed “concerns with the SEC and pointed out that the resolution was in violation of anti-boycott laws. We noted that TIAA-CREF’s corporate charter limited its functions to ‘aiding and strengthening nonprofit colleges, universities,’ and we could not understand how a biased resolution like this could properly be presented to their membership.”
TIAA-CREF manages pension funds on behalf of 3.7 million people, primarily from the non-profit academic, research, medical and cultural fields. The investment group has been the target of BDS activism since 2011.
The current BDS motion was filed by Jewish Voice of Peace and signed by 200 investors, requesting that shareholders be allowed to vote on the issue at TIAA-CREF’s July annual meeting.
Last month, Shurat HaDin informed TIAA-CREF’s leadership that any attempt to implement the boycott resolution would be illegal. The letter noted that New York law defines boycotts as “unlawful discriminatory practice” and that any decision to “refuse to buy from, sell to or trade with, or otherwise discriminate against any person, because of the…creed…[or] national origin” was unlawful and even places secondary actors, aiding the policy, under liability.
The letter pointed out that the Ribicoff Amendment to the Tax Reform Act of 1976 also makes it a federal violation to “participate in or cooperate with an international boycott.”
Darshan-Leitner said that if measures were to be actually taken against Israel, Shurat HaDin would immediately file suit on behalf of Israeli businesses against TIAA-CREF and to ensure enforcement of state and Federal anti-discrimination laws.
“We seek to make sure Israeli companies are not harmed as a result of a newly-adopted policy of discrimination. The BDS movement was looking for a big public forum to spew their hatred. The SEC ruling has now put an end to all that. It is an important victory and we are grateful that the SEC gave TIAA-CREF authorization to ignore extremism,” Darshan-Leitner said.
In 2011, Jewish Voice for Peace filed a similar shareholder proposal calling for TIAA-CREF to divest from three companies doing business in the Jewish inhabited areas of Judea and Samaria — Caterpillar, Veolia Environment and Elbit. The matter was never heard by the fund’s shareholders after TIAA-CREF filed a complaint with the SEC.
According to the website Pensions and Investments, Sydney Levy, a spokesman for Jewish Voice for Peace, said the shareholder proposal was rewritten this year not to require divestiture of a specific company, an attempt to get around the SEC regulations.