Zachor’s goal is to prevent investment professionals from using portfolio decisions to discriminate against Israel and the DOL’s ruling is an important step.
RED LEVEL, AL, USA, December 17, 2020 /EINPresswire.com/ — Among Zachor Legal Institute’s areas of focus is confronting discriminatory boycotts that have been promoted by a group known as the Boycott, Divest and Sanction (“BDS”) movement. The BDS movement has deep and extensive ties to designated foreign terrorist organizations, including Hamas and the Popular Front for the Liberation of Palestine and has infiltrated a number of organizations to spread a discriminatory agenda aimed at Jews and companies that do business with and in Israel.
To spread its unlawful boycott, the BDS movement (including through its allies at the United Nations) has published a blacklist of Israeli companies that it targets for boycotts. To cloak its illicit activities with a patina of legitimacy, BDS movement operatives have lobbied a number of corporate social responsibility (“CSR”) organizations and coerced them into including Jewish owned companies on their blacklists for no reason other than the fact that the companies operate in Israel or have pro-Israel individuals in management.
Boycotts of Israel are prohibited under federal law in the United States. Companies that engage in prohibited boycotts can be subjected to prosecution and can also lose tax benefits. Furthermore, approximately half of all states in the United States have enacted laws that prohibit those states from entering into contracts with, or investing in, any company that participates in boycotts against Israel.
BDS activists have been trying to weaponize so-called responsible investing protocols to compel portfolio managers into divesting from Israel and any company doing business in Israel. A significant proportion of the assets under management in investment portfolios are in retirement funds governed by ERISA (a law enforced by the Department of Labor), and those fund managers tend to be susceptible to the pressure of the social justice activists who have wrongfully targeted Israel in a discriminatory campaign to strip the Jewish people of self-determination in their historic homeland. These activists urge companies to ignore the interests of their shareholders, including the retirees who depend on such investments to provide them with income needed to survive on, in favor of wasting the corporate franchise to benefit third parties who are often unrelated to the company or the financial needs of retirees.
Zachor provided the Department of Labor with a detailed examination of laws and regulations applicable to fiduciaries managing investments and concluded that any retirement fund that bases its investment decisions on CSR initiatives that elevate the interests of third parties over shareholders or retiree beneficiaries may be violating a number of federal and state laws. Over 1,000 other comments were sent to the Department of Labor, many of them from activists who were trying to legitimize the use of corporate social responsibility programs in investing.
Thankfully, the DOL has finalized the proposed rule and, in line with Zachor’s recommendations, has unambiguously rejected the idea that non-financial considerations may be the basis for investment decisions by ERISA fund managers. The DOL clearly ruled that pecuniary considerations must be the primary focus for ERISA investing.
Zachor’s goal is to prevent investment professionals from using their portfolio decisions to discriminate against Israel and the DOL’s final rule is an important step.
About Zachor Legal Institute: Zachor Legal Institute, a 501(c)(3) non-profit organization, uses the law to defend against anti-Semitism and delegitimization of Israel, with a focus on opposing BDS. To learn more, please visit www.zachorlegal.org.