Alarmed at what they say is a coordinated effort to damage Israel's economy, legislators and governors in approximately half the states have acted to punish companies that support the boycott, divestment and sanctions movement.
Through legislation and executive orders, the states' responses include laws that restrict public pensions plans from investing in companies deemed to support anti-Israel economic boycotts. Some states authorize pension plans to divest from companies that violate their respective laws. Other states, through laws and governors' executive orders, prohibit state agencies from doing business with BDS supporters, according to data compiled by several sources including a state government trade group and legal and public interest organizations.
Most laws and executive orders have been in effect for less than four years, and a sampling of state action by Pensions & Investments reveals few divestitures by public pension plans.
Still, the broad actions by these states have prompted some pension experts to argue that politics shouldn't interfere with the fiduciary duties of public plan managers.
"I don't like any of this," said Alicia Munnell, director of the Center for Retirement Research at Boston College.
"The appropriate place for this to play out is not the pension plans for public workers," she added. "They're trying to make foreign policy through the pension funds." Ms. Munnell said her disapproval is not restricted to states' anti-BDS laws. Any form of "social investing" law or policy restricting pension funds' investment strategies represent "diversions" from plan managers' fiduciary duties.
Although the number of anti-BDS laws and executive orders has grown, "I've heard very little from my membership," said Keith Brainard, the Georgetown, Texas-based research director at the National Association of State Retirement Administrators. "This relative absence indicates there may be more symbolism than substance."
In some cases, the laws directed at public pension plans can create tension for the plan managers.
Colorado's law requires the board of trustees of the Colorado Public Employees Retirement Association, Denver, to prepare a list of restricted companies and prohibit future investments in them and, if warranted, divest from the companies.
In January, trustees of the $49 billion plan issued a statement saying that although they will follow the law, they worry about interference with their fiduciary duties.
"Once a divestment mandate is imposed to address one issue, the resulting 'slippery slope' makes differentiation among the remaining issues contentious and divisive," they wrote.
Ordering a divestment "comes with significant associated costs," the trustees added. They cited hiring a search firm to check for possible violators, buying and selling securities, conducting due diligence for finding replacement securities or funds, and creating strategies that exclude certain investments.