New Jersey pension and annuity funds will divest from companies that boycott Israel, if Governor Chris Christie signs the bill the New Jersey legislature passed on Monday.
The bill, which was strongly supported by the Jewish community, passed 69 to 3 with 2 abstentions in the state Assembly, and 37 to 0 in the Senate.
“We are sending a statement that we do not want to delegitimize our partner in freedom,” explained Assemblywoman Valerie Vainieri Huttle of Englewood, one of the bill’s sponsors.
“We are grateful that once again members of the Senate and Assembly have made a strong statement in recognition of the historic cultural and economic ties between New Jersey and Israel,” Mark S. Levenson, president of the N.J. State Association of Jewish Federations, said.
Nine states already have passed similar laws targeting BDS, the Boycott Divestment Sanctions movement Palestinian activists launched against Israel in 2005. The first anti-BDS bill to be signed into law was in Illinois; it was implemented in 2015. In Rhode Island, a bill has been passed by the legislature and is awaiting the governor’s signature.
While the BDS movement has claimed a handful of high-profile victories, including a 2014 decision by the Presbyterian Church USA to sell its holdings in Caterpillar, Hewlett-Packard, and Motorola because of those companies’ activities in Israel, there has been little actual financial impact on the Israeli economy.
Israeli leaders have made fighting BDS a major priority in recent years. They have compared the BDS campaign to terrorism. “It is just like suicide bombings,” said Knesset member Anat Berko, who has written two books on suicide bombers.
BDS supporters say their call for boycotts and sanctions constitute non-violent protests.
Jacob Toporek, executive director of the N.J. State Association of Jewish Federations, said that the bill “sends a strong message in support of the New Jersey-Israel relationship and in opposition to BDS and discriminatory practices against Israel and Israeli businesses.”
Mr. Toporek said that the anti-BDS legislation was the top legislative priority for his group, which handles lobbying for the state’s Jewish federations in Trenton. Among its activities was a coordinated letter-writing campaign, which sent 2,200 letters to leaders in Trenton in support of the legislation.
The New Jersey chapter of the American Civil Liberties Union opposed the measure as an unconstitutional restriction of free speech.
According to a letter sent in June to legislative leaders signed by NJ-ACLU’s executive director Udi Ofer and senior staff attorney Alexander Shalom, the anti-BDS bill “opens up a hornet’s nest of constitutional concerns.
“The bill stifles constitutionally protected speech by punishing unpopular political beliefs,” they wrote. “The government cannot institute regulations based on the desire to punish First Amendment activities intended to influence public opinion or public policy.”
The legislation, they wrote, “requires the government to differentiate between those companies that do not do business with Israel for political reasons and those that do not do business with Israel for all other reasons. Where two similar companies do not invest in Israel, only the one whose leaders or employees have been outspoken about their motivations will be punished.”
But Ms. Huttle defended the bill. “I felt it was not a freedom-of-speech issue,” she said. “It was a business decision.”
She said that when she went to Israel in February with 18 other legislators, “We saw first that that it really is the sole democracy in that region.”
The bill itself explains that “Nationality-based boycott actions are often veiled discrimination, and it is against the public policy of New Jersey to support such discrimination. Boycotts, such as those against Israel, do not make for effective business decision making, prevent a business from making the best use of the resources available to it and should be opposed as an impairment to the soundness of commercial contracting performance.”
The New Jersey bill is more moderate than other anti-BDS efforts. It applies to Israel, not Israel-controlled territory, meaning the West Bank. And it applies to investments, not contracts.
The bill allows the Department of Treasury 120 days to identify those companies engaged in the boycott of Israel and Israeli business. Once they are identified and a list of their names is published, New Jersey has two years to withdraw investment of pension funds from those companies. The state also is prohibited from investing further in any companies boycotting Israel.
In Illinois, ten firms are on the list of companies banned from state investment for boycotting Israel; one is contesting that designation. The same page on the state’s website lists five companies — most of them Chinese oil companies — that are on the prohibited investment list because they have done business with Iran. More than 100 companies are on the list for doing prohibited business with Sudan, including such corporate giants as Hitachi, Sony, Toyota, Volkswagen, and Volvo.