Two dozen attorneys general urge Brown University trustees to reject Israel divestment

The attorneys general of 24 U.S. states warned Brown University of severe financial penalties if the investment committee of its endowment votes to divest from companies which have close links to Israel.

In a letter dated August 26, top law enforcement officials in mostly Republican-led states urged the Brown University Corp. -- the university’s governing board which shares stewardship responsibilities for Brown's $6.6 billion endowment –- to reject the so-called “Brown Divest Now” proposal at its investment committee meeting next month.

The warning comes amid a wider trend across America: College campuses witnessed widespread protests by student groups related to the Israel-Hamas war, with some asking university endowments to divest from Israel.

The latest Attorneys General letter characterized the movement at Brown as “part of an antisemitic pressure campaign spearheaded by a group calling itself ‘Students for Justice in Palestine’.”

Brown proposal

The signatories, led by Attorney General Tim Griffin of Arkansas, warned that passage of Brown's divestment proposal “may trigger the application of laws” in nearly three-fourths of the 24 states terminating “any existing relationships with Brown and those associated with it."

States might also be forced to "divest from any university debt held by state pension plans and other investment vehicles, and otherwise refrain from engaging with Brown and those associated with it.”

Signatories included officials from Alabama, Alaska, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, Virginia, and West Virginia.

The letter further noted that “many of our (24) states” are “undertaking a review of our pension investments and contracts to determine if Brown has already violated state law” by calling for a vote on the divestment proposal.

The AGs cited as an example the “profound financial consequences” suffered by firms that seek to divest from Israel.

When ice cream maker Ben & Jerry’s, a subsidiary of Unilever, attempted to boycott Israel, the “application of state (anti-Boycott, Divestment and Sanctions) laws led to the divestment of hundreds of millions of dollars in Unilever stock by state pension funds and, eventually, the termination of the Unilever CEO," the letter said.

Brown Divest Proposal

Among other things, the student-led Brown Divest Proposal calls for implementing a comprehensive screening across Brown’s endowment portfolio designed to terminate investments in Israeli companies or in companies doing business with Israel. Specifically, the proposal calls on Brown to divest from companies including Textron, Volvo Group, Airbus, Boeing, General Dynamics, General Electric, Motorola, and RTX Corp.

In more general terms, the proposal calls for Brown University to divest from “companies identified as facilitating human rights violations in Palestine.”

In a separate release, Griffin stated: “We urge the Brown University Corporation to reject this antisemitic and unlawful proposal that stems from the violent threats against Jewish students at Brown last spring.”

Brown University’s 54-member trustees and fellows are led by Bank of America CEO Brian Moynihan, who was recently elected the Corporation’s chancellor.

A spokesperson for Bank of America referred the matter to Brown University. A spokesperson for Brown University declined to comment on the attorneys general letter.

Brown president

On Aug. 1, Brown University President Christina H. Paxson, another trustee, wrote a letter to “members of the Brown community” stating that when the Brown Corporation meets in October, it will conduct a “fair, balanced and well-informed review, in keeping with Brown’s long-standing process for considering requests for divestment that come from our community.”

She added that “given the sustained and intense interest in this issue (Israel and Gaza) for so many in our community, I have promised that I will move the recommendation forward to the Corporation for consideration at its October 2024 meeting.”

Charles Skorina, managing partner of Charles A. Skorina & Co., an executive search firm that works with endowments, foundations, and institutional asset managers, said he was “appalled” by the divestment proposal and commended the attorneys general for urging Brown to reject the measure.

“When a school or an investment committee passes something like this there are so many ramifications,” he said, “First of all, it’s very vague. What does ‘ties to Israel’ mean? Flying into an Israeli airport? Buying an index fund that includes an Israeli stock? There's no way of even beginning to sort through that mess or untangle that ball of string.”

Skorina also wondered where such divestment movements might lead to next.

“Should we boycott and divest from Turkey because of the Armenian genocide from World War One,” he asked hypothetically. “Do we boycott Germany because of the Holocaust from 80 years ago”?

Skorina added: “Why would a school (Brown) that has been around for over two hundred years pass something that a relatively small group of people -- a special interest –- seem to care about”?

A number of states are seeking to come down hard on institutions that attempt to divest Israeli holdings. In June of this year, state senators in Pennsylvania proposed a bill that would penalize colleges and universities which boycott Israel by barring them from receiving state funding.

A June 5 letter sent to state senate members by Sen. Steven J. Santarsiero and Sen. Kristin Phillips-Hill stated that the bill would “prohibit holdings in the Pennsylvania State Treasury or Commonwealth pension funds from boycotting or divesting from Israel and companies doing business with Israel,” while adding the legislation will have “no impact on investment decisions made solely in advancing the financial position of the funds.”

Thus far, 38 U.S. states have adopted laws, executive orders, or resolutions that would prohibit boycotts against Israel.