David Lloyd, of the US Campaign for the Academic and Cultural Boycott of Israel’s Organizing Committee, authored the following response to the statement of...
ABCs of Divestment
• Universities are like giant investment bankers. They typically hold hundreds of millions, if not billions, of dollars in financial assets—usually in the form of cash, stocks, and bonds. This is called an endowment.
• Stocks and bonds are spread over many different funds and sources, and are constantly changing. Details of the holdings are often confidential, or at least difficult to obtain. Furthermore, money invested in outside mutual funds itself changes, such that university money managers themselves are unsure of where, precisely, their money is invested.
• Bond holdings are typically corporate or governmental, but may also include foreign countries. Many universities, for example, hold ‘Israel bonds’; these are, in effect, direct loans to the State of Israel.
• Of corporate stock holdings, special concern exists with respect to the defense and military industry. A number of American and foreign corporations supply weapons and systems directly to the Israeli military (IDF). American-made weapons have been widely deployed against civilian targets in Lebanon and Gaza, including such banned weapons as cluster bombs and phosphorus bombs.
• Prominent military suppliers to the IDF include:
o Boeing – military aircraft.
o Northrup-Grumman – weapons, cluster bombs.
o BAE – European maker of weapons, cluster bombs.
o General Dynamics – weapons, cluster bombs, phosphorus bombs.
o L-3 Communications– weapon and communication systems.
o Motorola– wireless communications.
o Caterpillar– military bulldozers for home demolition.
o United Technologies– missile systems, helicopters.
o Raytheon– weapon systems.
o Lockheed-Martin– weapon system.
• As investors (stockholders) in the above corporations, universities are part-owners. When the corporation earns profits through the sale of weapons to the IDF, the stockholders benefit—through dividends and increasing stock price. In a very real sense, universities profit off the use of weapons against civilians.
• There is an obvious remedy: divestment. To ‘divest’ means nothing more than selling the stock in the offending corporations, or selling the bonds of the offending country.
• Many universities have procedures to examine the ethical nature of their investments. Many did precisely this in the 1970s and 80s, with respect to South African apartheid. Others have divested from tobacco stocks. The process typically involves 3 steps:
1. Formation of an investigative committee, to find out exactly which investments are involved, and in what dollar amounts.
2. The committee then makes a recommendation regarding how much, and which investments, should be divested from (if any).
3. Approval of the recommendation is given by the President and/or Board of Regents.
The process is not difficult, and can be completed within one year.
• Typically, however, there will be resistance to divestment, especially with respect to Israel. Jewish-American students, faculty, administrators, regents, or donors will object, citing divestment as ‘anti-Israel’ or ‘anti-Semitic.’ Both claims are unfounded. To distance one’s university from American weapon suppliers, or from loans to Israel, is an expression of a desire to distance oneself from de facto apartheid, and from war crimes against innocent civilians. This is the only morally-justifiable position. The alternative is to profit from the death of innocents.
• Successful divestment requires persistence, education, and determination. But when enacted, it is very effective. Along with boycotts and sanctions, divestment has the power to end apartheid, and to compel renegade nations to comply with international law. It has worked, and it will work.