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New Jersey Divests From Danish Bank Over Its Support for BDS

By selling its shares in Danske Bank, the Garden State is giving teeth to its anti-BDS legislation

Armin Rosen
January 12, 2018
Neilson Barnard/Getty Images
New Jersey Governor Chris Christie on January 7, 2016.Neilson Barnard/Getty Images
Neilson Barnard/Getty Images
New Jersey Governor Chris Christie on January 7, 2016.Neilson Barnard/Getty Images

One of the biggest victories that American pro-Israel activists have claimed in recent years is the passage of nearly two-dozen state laws meant to counter the Boycott, Divestment, and Sanctions (BDS) campaign against Israel. Anti-BDS measures have been passed in 23 US states, as legislators across the country have proven willing to put the force of law behind their support for Israel. Still, the push for anti-BDS legislation left a coast-to-coast body of statutes that have gone largely untested in reality—at least until last month.

In late December, governor Chris Christie announced that the New Jersey state government had sold off its investments in Danske Bank in compliance with a 2016 anti-BDS law. Danske is Denmark’s largest bank, with over a half a trillion dollars in total assets. The bank currently includes two Israeli concerns, Aryt Industries and Elbit Systems, in its list of “excluded companies” whose work violates the bank’s social responsibility policies. The bank maintained that prohibiting the investment of its clients’ assets in these two companies didn’t constitute a boycott of Israel. Still, Elbit mostly makes electronics, and pro-Israel advocates argued that it was the only company with that specialization on Danske Bank’s ban list. As of January 2017, the bank’s website included an “Areas of Conflict” investment policy that discussed only one issue in any real depth: Namely, the legal status of Israeli settlements in the West Bank.

Whatever the merits, three states didn’t buy Danske Bank’s argument that it wasn’t singling out the two companies simply because they were Israeli. Last year, the bank was added to the Colorado state government’s Restricted Company List, as well as to Illinois’s Prohibited Investment List. Then, in December, Christie announced that the New Jersey government would sell its shares in the Danish bank, potentially launching the next round of the state-level BDS wars. The Israeli-American Coalition for Action, which had pushed for New Jersey’s divestment from Danska Bank, claimed victory. “This is a major win in the fight against BDS, and sends a strong message to companies around the world that are considering engaging in the hateful BDS campaign,” the group said in a press release last month. The political fight over BDS laws’ passage is over, but after New Jersey’s divestment from Danske Bank, both opponents and supporters of Israel now have an idea of what these statutes really mean.

Anti-BDS measures usually pass overwhelmingly: New Jersey’s won by a 69-3 vote in the State Assembly. But the laws are still contentious, for reasons that go beyond the usual Middle Eastern political divides. Civil liberties advocates argue that boycotts are protected speech, and have warned that anti-BDS statutes could infringe upon First Amendment protections. Proponents of the laws contend that they prevent state governments from being complicit in discriminatory business practices, and punish companies for the action of actively boycotting the Jewish state rather than for taking a political position.

The debate over the intent and efficacy of anti-BDS legislation has largely been theoretical up to this point simply because there haven’t been many cases where the laws have resulted in a state taking action against a specific company. Past attempts to apply the laws have largely highlighted just how little their real-world consequences are understood. In October, the ACLU reported that a Texas town was making residents promise not to boycott Israel in order to receive hurricane relief funds. The town’s government later admitted that it had misinterpreted Texas’s newly-signed anti-BDS law: Because the fund in question wasn’t taxpayer-supported, the anti-BDS statute didn’t apply to it.

With Danske Bank, a state government has created a potential template for how anti-BDS statutes could be enforced. In this case, a state has cut off business with a bank because it allegedly used a company’s Israeli origins as a reason not invest in it—even though that bank was never accused of participating in a wholesale boycott of the Jewish state. Brooke Goldstein, a lawyer and executive director of the New York-based Lawfare Project, which raises legal challenges to alleged boycotts of Israel, said New Jersey’s decision could put other states and companies on notice. “The implication is obvious: you are not going to be able to do business in the United States if you discriminate against persons and companies because of protected categories including race, ethnicity, and national origin,” Goldstein explained. “A state has every right to pick and choose who they want to do business with.”

Danske Bank still contends that its inclusion of two Israeli-owned companies on its ban list isn’t a boycott of Israel. “We have taken notice of the decision from the State of New Jersey and we regret that we have not been able to convince the State that we do not boycott Israel or Israeli companies as such,” Kenni Leth, Danske Bank’s head of media relations and internal communications told Tablet in an email. “The fact of the matter is that we do business with a number of Israeli banks and businesses and have done so for several years.” Leth wrote that the Bank doesn’t invest in Elbit or Aryt “because we determined that those two companies, like 25 other companies currently on our list, were engaged in commercial activities that were not consistent with our Responsible Investment Policy.” New Jersey’s recent decision demonstrates that even in what could be viewed as an ambiguous, borderline case—and even in a situation where the entity in question repeatedly claims it isn’t participating in the anti-Israel boycott—states aren’t always going to take a generous view of a company’s actions.

New Jersey has also shown the potential costs of not complying with state BDS laws. As of December 2016, New Jersey’s state pension fund held a non-trivial $44 million in the Danske Bank. At least in Trenton, the anti-BDS law is more than just a politically expedient statement of support for Israel. New Jersey’s decision could provide cover for other states that want to give some teeth to their own anti-BDS laws, too.

Armin Rosen is a staff writer for Tablet Magazine.