In N.J. Legislature, a backlash to Israel boycott campaign

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Lawmakers on Monday are expected to pass legislation that would prohibit the state Treasury Department from investing public employee pension funds in companies that boycott Israel as part of the so-called "boycott, divestment, and sanctions" movement. Here, a demonstrator holds a sign with a Palestinian and Israeli flag during a demonstration in the West Bank city of Bethlehem on Feb. 5, 2016.

New Jersey is about to boycott a boycott movement against Israel.

Lawmakers on Monday are expected to pass legislation that would prohibit the state Treasury Department from investing public employee pension funds in companies that boycott Israel as part of the so-called "boycott, divestment, and sanctions" movement.

It would join about a dozen other states that have taken similar action, most recently New York, where Gov. Andrew Cuomo this month signed an executive order requiring divestment of public funds from companies that have engaged in the BDS campaign against Israel.

There appears to be near-universal support for the legislation in Trenton, despite scathing criticism from groups such as the American Civil Liberties Union, which argue that it would violate the First Amendment's protection of free speech.

The Treasury Department isn't aware of any companies with which the state has invested pension funds that would violate the legislation, according to a spokesman. The state's $71 billion pension fund, which is significantly underfunded, covers about 800,000 active and retired public employees.

One of the bill's chief sponsors, Assemblywoman Valerie Vainieri Huttle (D., Bergen), said she wasn't responding to a surge in BDS activity in New Jersey, though she did note some anecdotal anti-Semitic episodes.

Rather, she said, the legislation aims to maintain and strengthen New Jersey's existing relationship with Israel, "without doing harm to the right to express one's opinion."

More than $1.3 billion in goods are traded annually between the two, according to the bill.

"It's about [Israel's] economic viability," said Vainieri Huttle, who visited the country in February with 18 other lawmakers on a legislative mission.

The bill passed the Senate on a 39-0 vote last month, and the Assembly version lists more than three dozen sponsors, including members of both parties.

If the Assembly, as expected, passes the bill on Monday, and the Senate concurs with a couple of amendments made by the lower house, it would head to Gov. Christie.

In Harrisburg, legislation introduced this year would require Pennsylvania to shed its investments in companies that boycott Israel and prohibit the commonwealth from awarding contracts to such firms.

Palestinians and their supporters launched the boycott, divestment, and sanction campaign in 2005. The movement vows to continue until Israel "complies with international law and Palestinian rights."

The ACLU of New Jersey contends that the legislation advancing in Trenton "punishes speech, political and otherwise" and builds "government blacklists targeting people who hold certain political viewpoints."

Alexander Shalom, senior staff attorney with the ACLU's New Jersey chapter, provided an example: "You happen to buy wheat from Indiana or cheese from Wisconsin - no harm, no foul."

But if the same company has been "a vocal critic of Israel, that's exactly the sort of thing that will get you placed on the blacklist."

"What does it mean for a company to boycott Israel?" he asked. Ford Motor Co., for example, might buy its tires in the United States, not from Israel, Shalom noted. That's not discriminatory; it's just a business decision.

But under the legislation, if a company is found to "boycott" Israel with the intent to "penalize, inflict economic harm on, or otherwise limit commercial relations with" the country, then the company would lose New Jersey's business.

This differs from past divestment campaigns, as with apartheid-era South Africa, when anyone who did business with the country "for any reason" was subject to penalty, Shalom said.

"Here we're making a distinction between some companies that don't do business with Israel and other companies that don't do business with Israel," he said.

"The distinction is based on what people have said. That's the core of the First Amendment."

The legislation would give the director of the state Division of Investment four months to identify investments that violate the act. Following implementation of the law, the division would have two years to divest, sell, redeem, or withdraw such investments.

Under current law, Treasury is similarly banned from investing pension funds in companies with ties to Iran or Sudan.

The bill would not apply to companies providing humanitarian aid to the Palestinian people.

Palestine Legal, a U.S. organization that advocates Palestinian rights, and the Center for Constitutional Rights, a New-York based nonprofit legal group, in April sent a report to lawmakers in five states, including New Jersey and Pennsylvania, raising First Amendment concerns about their legislation.

Vainieri Huttle, the New Jersey lawmaker, said the legislation "does not prevent a company from criticizing Israeli policies and actions. It aims at its business practices, and those of a discriminatory nature."

"This is not a political issue," she added. "It is an issue of, in my opinion, bringing together people and making sure we don't promote anti-Semitism."

The legislation is supported by the Israel Project, a Washington-based nonprofit that last week commended lawmakers "for strongly standing up against baseless anti-Israel discrimination."

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