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Activists to sue Minnnesota for investments that fund Israeli occupation

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Minnesota is among twenty-two states and the District of Columbia which invest in State of Israel Bonds. Proceeds from the sale of Israel Bonds are disbursed by Israel’s Ministry of Finance to various Israeli government agencies and then used, in part, to fund illegal settlement activities in the West Bank, including the construction of the apartheid wall, the confiscation of Palestinian lands and the construction of Israeli-only bypass roads.

The State Board of Investment (SBI) is charged with managing Minnesota’s public employee pension fund investments, including the Israel Bond investments. The members of the SBI (Governor Mark Dayton, Secretary of State Mark Ritchie, Attorney General Lori Swanson and State Auditor Rebecca Otto) have a statutory responsibility to the taxpayers to invest prudently and lawfully, while the SBI claims that it has no obligation to take into account moral or ethical issues in making investment decisions. 

Minnesota Break the Bonds Campaign (MN BBC) was formed in response to the 2005 Palestinian civil society call for Boycott, Divestment and Sanctions of Israel and chose as its specific target the millions of dollars in Israel Bonds that the SBI holds in its portfolio. One of the primary reasons for targeting these state investments was the opportunity it provides to educate a broad state-wide audience to remedy the extreme dearth of accurate public knowledge of the Palestine/Israel situation. To this end, members of MN BBC have been traveling the state and presenting programs and educational events, film series and discussion sessions. Our group has grown from its two founders in 2006 to several hundred active members today.

Along with its educational component, for more than a year members of MN BBC have been meeting with state senators and representatives to encourage them to sponsor a bill to divest from Israel bonds. This effort has been largely met with steely stares and forced smiles. Invariably, legislators tell us that they have no control over the investments and that we should be speaking to the SBI. This we did. At one notable SBI meeting, several MN BBC members addressed the board, and although Governor Dayton listened respectfully, he clearly had other things on his mind. The response from the SBI was that we should instead be speaking to the legislators, since they had the power to legislate bans on certain investments. 

While our appeal to the legislators and to the SBI was based on moral and ethical grounds, we also informed the Board that its investments in Israel Bonds were already illegal under existing Minnesota law. The Minnesota statute that controls the SBI’s investment decisions only permits investment in a narrow category of government bonds, including Canadian and U.S. Government bonds. Israel Bonds are not included. Nor, for example, are the government bonds of Iran, North Korea and Sudan included. Interestingly, the Minnesota legislature passed divestment legislation targeting privately held companies doing business in Iran and Sudan. These Iran and Sudan divestment bills include no provisions requiring divestment from the government bonds of either of those two countries, since any such investments are already prohibited, just as investment in Israel Bonds. Yet, the only foreign country (outside of Canada) in which Minnesota has invested in government bonds is Israel. Minnesota law is being broken for Israel alone. 

In addition to the Minnesota statutory violation, Minnesota has an obligation to comply with all international conventions and treaties of which the U.S. is a signatory. This includes the Fourth Geneva Convention. Article 49 of the Fourth Geneva Convention prohibits transferring the civilian population of the occupier into occupied territory. Israel, in contravention of this article, has been transferring Israeli civilians into the West Bank since 1967. The UN, the International Court of Justice and the United States Government all concur that this transfer is illegal. Knowingly providing financial material support for Israel’s illegal settlement activities and infrastructure equally violates the law. 

The SBI has a duty to protect the taxpayers and the state pension plan from lawsuits. By financially aiding and abetting Israel’s violation of Article 49 and other international laws, the SBI could potentially be sued by victims of these violations. These lawsuits could come under the Alien Tort Claims Act (ATCA), an 18th century law allowing foreigners to bring lawsuits in U.S. courts against those who aid and abet international law violations committed against them. Minnesota’s investment in Israel Bonds exposes the SBI and its agents, officers and employees to these lawsuits. Minnesota’s taxpayers would be stuck with the bill for defending against any such lawsuits and paying for any adverse judgments. 

Because the SBI has refused to divest from its Israel Bond investments, before the end of November, MN BBC will serve a lawsuit on the Minnesota SBI seeking an order from the court directing the SBI to immediately divest from Israel Bonds and to refrain from purchasing more on the grounds that 1) the SBI’s investments in foreign government bonds (with the exception of Canadian bonds) are illegal according to Minnesota statutes; 2) investments in Israel Bonds aid and abet Israel’s continuing violations of Article 49 of the Fourth Geneva Convention contrary to international, U.S. and Minnesota law; and 3) by investing in illegal settlement activity, the SBI exposes Minnesota taxpayers and the state pension plan to potential lawsuits.

We believe strongly that the law is on our side. The lawsuit will also help to educate Minnesotans and Americans about the ongoing international law violations occurring in Israel and Palestine which our government leaders and politicians have supported with impunity. This is a small part of the work involved in solidarity with Palestinians and the call for BDS. The struggle for human rights continues.

P.S. We have recently been informed that the Minnesota State Board of Investment has invested in sovereign German bonds. Although this is in violation of state statutes, it is no longer correct that Israel is the only country for which Minnesota has violated its own laws.

Phil Benson is an active member of Minnesota Break the Bonds Campaign and Friends of Sabeel North America. As an activist Presbyterian, Phil’s Christian values have been the force behind his work for justice in Palestine. Sylvia Schwarz is an engineer in St. Paul, a member of Minnesota Break the Bonds Campaign and the International Jewish Anti-Zionist Network.

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8 Responses

  1. Scott
    Scott on November 22, 2011, 10:13 am

    This is a wonderful form of activism, good luck.

  2. pabelmont
    pabelmont on November 22, 2011, 1:13 pm

    I like the idea of a lawsuit, even though it appears that no-one has been injured — other than Alien Tort Claims plaintiffs, although the form of cooperation in the illegal acts of Israel is fairly remote here. Good luck to them all, and especially to the educators!

    NB: This state (and others) has only lent money which is — in principle — to be repaid, a very small contribution indeed (if it is repaid after all), whereas the USA itself actually givews money to Israel, no strings attached. On the ATC theory, maybe the USA could itself be sued (if it allows such suit!).

  3. American
    American on November 22, 2011, 4:05 pm

    Looks like the Minnesota law is on their side–but doesn’t mean they win considering the ideological state of judges and courts today.
    I would bet a lot of other states are violation of state law in their Israel investments also.
    I have seen from time to time other objections to Israeli investments made by states and cites public funds… happened in Fla of all places not too long ago. The commissioners of some county tried to prevent the office that oversaw public employee retirement funds from buying Israeli bonds. Don’t know what came of it.
    But this would be a very good time to blow this issue up into something big for the public to see.
    This would be something for Blankford and Smith Grant to get onto and expand.

  4. American
    American on November 22, 2011, 4:07 pm

    The organized zionist groups file a lawsuit a day…..they need some competition.

  5. Clif Brown
    Clif Brown on November 22, 2011, 4:33 pm

    Good work! I am trying to find out the situation in Illinois. I have discovered that a strong supporter of Israel, State Senator Jeff Schoenberg (now retiring) was instrumental in getting legislation passed within the last ten years that allows Illinois to purchase foreign debt. Schoenberg has been silent to my email expressing my concern with his trips to Israel and attempts to pass Illinois legislation regarding Iran, I’ve no doubt he would have nothing to say on Israel bond purchases.

    Thought it has not been easy to find the state’s investments for the past decade on the Net, I have found the information for 2007 and 2010. In the earlier year there were other countries along with Israel whose debt was purchased. In 2010 there was $12 million going to Israel alone. I suspect that the purchase of Israeli debt has been a constant throughout the period with other countries’ debt purchased only from time to time to give the illusion that Israel just happens to be one of a group. I am attempting to find out the full history of Illinois purchases of Israel’s debt as I write this.

    I have been unsuccessful so far in getting a statement from Illinois State Treasurer Dan Rutherford certifying that state money paid to Israel has not been used for the settlements, nor have I been able to get his office to provide me with any Israel-supplied information submitted to his office certifying that the money will not be so used. I did inform him of the international law issues you describe. All I have received is a letter from the attorney representing the Treasurer’s Office that “due diligence” was done on the Israel debt instruments, and that Israel debt is a great buy. We all know how meaningless due diligence is from the recent banking disaster and the meaningless AAA ratings of junk derivatives. I think rubber-stamping would be an appropriate description of the process.

    When the public is not paying attention, we know that legislators routinely pass legislation that benefits their own favorite causes. My state representative, my state senator, my rep in Congress, my two Senators are all staunch supporters of Israel, Mark Kirk being the blue and white flag-waver in chief. To get past this wall is a task for which I welcome others Illinoisans to join me and I applaud the efforts of those who are doing the right thing in Minnesota.

    BTW – one of the people who has announced that he will be running for the Illinois state senate to replace Jeff Schoenberg has been silent in response to my email to him asking if he expects to continue the practice of taking trips to Israel. If nothing else, I am learning patience!

  6. MichaelRivero
    MichaelRivero on November 24, 2011, 10:30 am

    How does Israel pay back those bonds? WITH MONEY GIVEN TO THEM BY THE US CONGRESS!

  7. whiteaglesoaring
    whiteaglesoaring on November 24, 2011, 1:39 pm

    The violation of the Geneva Convention is a vital tool, but don’t overlook the basic rule of governance: abide by the law. The rule of law is even more vital to a civil society. Government becomes a tyranny when rules are not ruled by law, deigning to stand above the law, reigning as the embodiment of the law. Caesar would not have it otherwise. Governor Mark Dayton, Secretary of State Mark Ritchie, Attorney General Lori Swanson and State Auditor Rebecca Otto should be impeached for malfeasance…breaking the law under which they gave their oath of office.

  8. gazacalling
    gazacalling on November 25, 2011, 11:59 am

    This is awesome, way to go.

    Break the bonds! Break the bonds!

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