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May 31, 2013 By:
SEC Tells Pension Fund to Ignore Divestment Proposal
WASHINGTON — TIAA-CREF does not have to consider an investor's controversial proposal to divest from companies allegedly complicit in Israel's "occupation" of the West Bank, the Securities and Exchange Commission said.
The SEC, responding to a TIAA-CREF request in March to omit the divestment proposal for consideration at its annual meeting in Charlotte, N.C., in July, agreed with the giant pension fund, which oversees billions in retirement plans and other products for teachers and academics, that it had already met "the essential objectives" of the proposal by divesting from companies that violate human rights.
Such proposals, when submitted by shareholders, may be excluded only with the permission of the SEC. This one was submitted by Steve Tamari of Glen Carbon, Ill., in coordination with We Divest, a coalition of groups that includes Jewish Voice for Peace.
Tamari asked the fund to "end investments in companies that, in the trustees' judgment, substantially contribute to or enable egregious violations of human rights, including companies whose business supports Israel's occupation."
A senior SEC counsel, Deborah Skeens, in a letter sent May 10, granted the TIAA-CREF permission to ignore the proposal based on its "essential objectives" argument.
"TIAA-CREF already has put in place policies and practices designed to address human rights matters, which may include divesting from companies in appropriate circumstances," the pension fund said in its plea to the SEC.
In an almost identical case in 2011, TIAA-CREF won SEC permission not to consider a divestment proposal organized by Jewish Voice for Peace. The SEC cited this earlier case in its May 10 letter as further justification for TIAA-CREF not to have to consider the proposal.
Tamari in his submission to TIAA-CREF had cited the fund's investment in Veolia Environment, a Paris-based company that runs landfills in the West Bank and is a part owner of bus lines serving West Bank settlements. We Divest continued this week to urge its activists to press TIAA-CREF to consider the proposal despite the SEC ruling.