As is the case with all social movements, there is a dynamic interaction between challengers and opponents in the development of the movement. In this particular divestment campaign, the target (TIAA-CREF) has sought to circumvent the efforts of the We Divest campaign by avoiding divestment-related shareholder resolutions submitted by campaigners. TIAA-CREF has also been the target of anti-BDS organizations such as Shurat HaDin (Israel Law Center), whom threatened legal
245 Ibid and BNC, “TIAA-CREF: Divest from Injustice,” 4 October 2010;
http://www.bdsmovement.net/2010/tiaa-cref-divest-injustuce-4761.
246 Ibid (BNC). 247 Ibid.
146 action against TIAA-CREF should it consider the shareholder resolutions submitted by We Divest activists.
As briefly mentioned earlier, TIAA-CREF participants that are part of the We Divest campaign filed shareholder resolutions in 2011 and 2013. In 2011, nearly 20 TIAA-CREF investors that are part of the We Divest campaign filed a resolution to be considered by shareholders at the annual meeting. The measure requested that the financial services organization engage with companies such as Caterpillar, Veolia, and Elbit that profit from Israel’s occupation, and consider divestment if there is no commitment from the companies to cooperate by the time of TIAA-CREF’S annual meeting the following year. TIAA-CREF sent a letter to the SEC requesting that no enforcement action be taken by the federal regulator should the resolution be excluded from its annual shareholder meeting.
In its request to the SEC, TIAA-CREF argued that the divestment-related resolution was excludable because it interfered with ordinary businesses operations and attempted to “micromanage” the investment decisions of the corporation. It also claimed that the essential objectives of the proposal were already implemented, and finally, that the resolution made statements that were misleading and asked
shareholders to take a position on “a complex, controversial geopolitical dispute,” and attempted to make the annual meeting a “forum for debate on Middle East politics.”248
A lawyer representing the We Divest participants sent a letter to the SEC refuting all the claims of TIAA-CREF and asked the Commission to deny the no-action request. However, in May of that year, the SEC confirmed to TIAA-CREF that it would not recommend enforcement action based on its first claim that the resolution interfered
248 SEC, “TIAA-CREF Initial Submission,” 22 March 2011, 8-9;
147 with ordinary business operations and therefore it was not necessary to address the other claims proffered by the financial services organization.
We Divest activists again submitted shareholder resolutions two years later, this time on behalf of approximately 200 investors. In March, TIAA-CREF once again requested that enforcement action by the SEC not be taken if the proposal were omitted from that year’s annual meeting. The following month, lawyers from the National Lawyers Guild (NLG), who legally assisted the We Divest campaign, submitted an extensive 34-page rebuttal of TIAA-CREF’s claims to the SEC.
Shortly thereafter, the corporation sent a letter to the SEC that responded to the campaigners’ rebuttal and also submitted another letter to the federal regulator informing them that they had received a letter from Shurat HaDin – an Israeli legal organization that in part aims to prevent BDS activities – threatening legal action against TIAA-CREF should the shareholder proposal be considered. The letter from the Israel Law Center referred to the shareholder proposal as a “racist resolution” that is sponsored by “activists that seek to harm and discriminate against Jewish people and inflict violence against the state of Israel,” and quotes the Anti-Defamation League in stating, “BDS is anti-Semitic.” Referring to We Divest investors as “BDS operatives” the letter further asserts that the BDS movement is a “clear extension of the historic and continuing Arab boycott” and “BDS’s demands are fairly clearly made on behalf of [Arab] boycotting countries.” The letter also claimed that the proposed shareholder resolution violated numerous New York state laws and “might be” in violation of US federal law. The letter concluded with the threat of legal action should the shareholder resolution be considered.249
249 Shurat HaDin, “Letter to TIAA-CREF,” 10 April 2013; http://israellawcenter.org/wp-
content/uploads/2014/09/135103865-Civil-Liability-of-TIAA-CREF-for-Potential-Boycott-of-Israeli- Firms-and-Investments.pdf.
148 The NLG lawyers on behalf of the We Divest TIAA-CREF investors again sent a letter to the SEC responding to the letters submitted by the corporation. The legal team argued that the threat of third party litigation was not recognized in SEC rules as a justification for exclusion of a shareholder proposal. The letter further outlined how the Shurat HaDin letter to TIAA-CREF sought to infringe on the First Amendment rights of TIAA-CREF participants by attempting to outlaw criticism of Israel and silence critics. Moreover, the letter questioned how any New York state laws were being violated in the state, and implied that Shurat HaDin itself found the claim of federal law violations unsound by the phrasing in its letter. TIAA-CREF and the NLG lawyers sent several more letters to the SEC arguing their legal positions. The SEC did not get involved in the issue or contents of the Shurat HaDin letter sent to TIAA-CREF or the rebuttal by the We Divest lawyers. In May of 2013, the SEC sent confirmation to TIAA-CREF that enforcement action would once again not be taken against the corporation for omitting the shareholder resolution on grounds that it had done so in 2011 and the same criteria of interfering with ordinary business
operations still applied. Despite this conclusion last year, it is highly likely that based on their previous activities We Divest campaigners will continue to submit
shareholder resolutions in the future, and will develop ways to respond to or work around the SEC rules that permit the omission of their resolutions and the efforts of anti-BDS organizations such as Shurat HaDin.