# SECURITIES AND EXCHANGE COMMISSION

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URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A7c675aa3da69337d

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,

D.C. 20549

May 10,2013

DIVISION OF
INVESTMENT MANAGEMENT

Phillip T. Rollock
Senior Managing Director and
Corporate Secretary
College Retirement Equities Fund
730 Third Avenue
New York, NY 10017-3206
Re:

College Retirement Equities Fund ("Fund")
Shareholder Proposal of Steve Tamari

Dear Mr. Rollock:
In a letter dated March 22, 2013, you notified the staff of the Securities and Exchange
Commission ("Commission") that the Fund intends to omit from its proxy materials for its 2013
annual meeting a shareholder proposal submitted by Steve Tamari in a letter dated January 14,
2013. 1 The proposal provides :
THEREFORE, shareholders request that the Board end investments in
companies that, in the trustees' judgment, substantially contribute to or
enable egregious violations ofhuman rights, including companies whose
business supports Israel 's occupation.
There appears to be some basis for your view that the Fund may omit the proposal from
the Fund's proxy materials pursuant to Rule 14a-8(i)(10) under the Securities Exchange Act of
1934, which permits omission of a proposal that has been substantially implemented.
Accordingly, the Division of Investment Management ("Division") will not recommend
enforcement action to the Commission if the Fund omits the proposal from its proxy materials in
reliance on Rule 14a-8(i)(1 0). In reaching this position, we have not found it necessary to
address the alternative bases for omission set forth in your letter.
Because our position is based upon the facts recited in your letter, different facts or
conditions or additional facts or conditions may require a different conclusion. Further, this
response only expresses our position on enforcement action under Rule 14a-8 and does not
express any legal conclusion on the issues presented.

We also received four letters from the proponent dated April15, 2013 and April29, 2013 (two
letters) and May 2, 2013, and three response letters from the Fund dated April22, 2013 (two
letters) and May 1, 2013.

Phillip T. Rollock
May 10,2013
Page 2 of2
Attached is a description of the informal procedures the Division follows in responding to
shareholder proposals. If you have any questions or comments concerning this matter, please call
me at (202) 551-6795.

Sincerely,

Senior Counsel
Insured Investments Office
Attachment
cc:

Steve Tamari

DIVISION OF INVESTMENT MANAGEMENT
INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS

The Division of Investment Management believes that its responsibility with respect to
matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy
rules, is to aid those who must comply with the rule by offering informal advice and suggestions
and to determine, initially, whether or not it may be appropriate in a particular matter to
recommend enforcement action to the Commission. In connection with a shareholder proposal
under Rule 14a-8, the Division's staff considers the information furnished to it by an investment
company in support of its intention to exclude the proposals from the investment company's
proxy material, as well as any information furnished by the proponent's representative.
The staff will always consider information concerning alleged violations of the statutes
administered by the Commission, including argument as to whether or not activities proposed to
be taken would be violative of the statute or rule involved. The receipt by the staff of such
information, however, should not be construed as changing the staffs informal procedures and
proxy review into a formal or adversary procedure.
The determination reached by the staff in connection with a shareholder proposal
submitted to the Division under Rule 14a-8 does not and cannot purport to "adjudicate" the
merits of an investment company's position with respect to the proposal. Only a court, such as a
U.S. District Court, can decide whether an investment company is obligated to include
shareholder proposals in its proxy material. Accordingly, a discretionary determination not to
recommend or take Commission enforcement actions, does not preclude a proponent, or any
shareholder of an investment company, from pursuing any rights he or she may have against the
investment company in court, should the management omit the proposal from the investment
company's proxy material.

~~

1:.'

Phillip T. Rollock
Senior Managing Director and
Corporate Secretary
Tel: (212) 916-4218
Fax: (212) 916-6524
prollock@tiaa-cref.org

FINANCIAL SERVICES
FOR THE GREATER GOOD•

March 22, 2013
VIA HAND DELIVERY

William J. Kotapish, Esq.
Assistant Director
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N .E.
Washington, DC 20549
Re:

College Retirement Equities Fund- 2013 Annual Meeting
Omission of Shareholder Proposal of Steve Tamari et al.

Dear Mr. Kotapish:
College Retirement Equities Fund ("CREF") intends to omit from its proxy
statement and form of proxy ("2013 Proxy Materials") a shareholder proposal and
supporting statement that were submitted to CREF by Steve Tamari ("Proponent"), dated
2
1
January 14, 2013 ("Proposal"), for CREF's 2013 annual meeting. This letter provides
notice to the staff ("Staff') of the Securities and Exchange Commission ("Commission") of
CREF' s intent to omit the Proposal.
CREF is subject to the non-profit corporation law of New York, regulation by
insurance departments and is registered with the Commission as a diversified,
state
various
open-end management investment company under the Investment Company Act of 1940,
as amended. 3 CREF and Teachers Insurance and Annuity Association of America
A copy of the Proposal is attached as Exhibit A Several CREF participants submitted nearly
identical proposals for inclusion in the 2013 Proxy Materials. In the correspondence, most
participants indicate that Steve Tamari will act as the lead filer. CREF intends to omit all of
these proposals, and the term "Proposal," as used herein, refers to these other proposals as well.
If CREF were to include Mr. Tamari's proposal in the 2013 Proxy Materials, CREF would
exclude the other proposals as duplicative. See 17 C.F.R. § 240.14a-8(i)(ll).
2

CREF expects to file defmitive Proxy Materials on or about June 10, 2013.
CREF has eight different investment accounts: the Stock Account, Social Choice Account,
Growth Account, Global Equities Account, Equity Index Account, Money Market Account,
Bond Market Account, and Inflation-Linked Bond Account.

www.tiaa-cref.org

("TIAA") form the principal retirement system for the nation's education and research
communities. The financial services organization of which both companies are a part is
4
sometimes referred to as "TIAA-CREF."
The Proposal requests that CREF cease investing in companies that allegedly
provide "support for the Israeli occupation and segregated settlements in the West Bank,
including East Jerusalem." Specifically, the Proposal requests shareholder action on the
following resolution:
THEREFORE, shareholders request that the Board 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.
The Proposal is nearly identical to a shareholder proposal submitted to CREF in
2011 ("20 11 Proposal"), where the Staff concurred with our conclusion that the proposal
could be omitted from CREF's proxy materials because it dealt with a matter related to
5
CREF's ordinary business operations. For the same reason, we believe that the Proposal
here is properly excludable from the 2013 Proxy Materials.
We also believe that the Proposal is properly excludable because the essential
objective of the Proposal already has been substantially implemented, and thus the Proposal
is excludable pursuant to subparagraph (i)(10) of Rule 14a-8 under the Securities Exchange
6
Act of 1934, as amended ("Exchange Act").
For these reasons, we request that the Staff confirm that it will not recommend that
enforcement action be taken if CREF omits the Proposal from its 2013 Proxy Materials.
Please be advised that, pursuant to paragraph G) of Rule 14a-8, CREF
simultaneously has notified the Proponent of its intent to omit the Proposal from its 2013
Proxy Materials by a copy of this letter.

4

TIAA-CREF Investment Management, LLC, an indirect subsidiary ofTIAA, serves as CREF's
investment manager.
17 C.F.R. § 240.14a-8(i)(7); see College Retirement Equities Fund, SEC No-Action Letter (pub.
avail. May 26, 2011) ("2011 No-Action Letter"). A copy of the 2011 No-Action Letter and
related correspondence with the SEC staff is attached as Exhibit B.

6

We argued that this exclusion also applied to the 2011 Proposal, but the Staff did not need to
address the argument because the Staff agreed that the 2011 Proposal was excludable pursuant
to subparagraph (i)(7) of Rule 14a-8.

Page 2 of 8

I.

ANALYSIS
A.

The Proposal may be excluded under Rule 14a-8(i)(7) because it deals with
matters relating to CREF's ordinary business operations.

A proposal may be omitted under Rule 14a-8(i)(7) if it "deals with a matter relating
to the company's ordinary business operations." This paragraph of the rule is captioned
"management functions." The Commission has explained that the policy underlying the
ordinary business exclusion under Rule 14a-8(i)(7) rests on two central considerations. The
first consideration is that "certain tasks are so fundamental to management's ability to run a
company on a day-to-day basis that they could not, as a practical matter, be subject to direct
shareholder oversight." The second consideration relates to "the degree to which the
proposal seeks to 'micro-manage' the company by probing too deeply into matters of a
complex nature upon which stockholders, as a group, would not be in a position to make an
informed judgment."7 As the Staff has recognized in numerous Rule 14a-8 no-action
letters, "the ordinary business operations of an investment company include buying and
selling portfolio securities."8 Omitting the Proposal thus fits squarely within the purpose of
the exclusion for "management functions."
9
As noted above, the 2011 Proposal is nearly identical to the Proposal here. Both
the 2011 Proposal and this Proposal target investments in companies that, according to the
Proponent, provide "support for the Israeli occupation and segregated settlements in the
West Bank, including East Jerusalem .... "In addition, both proposals ask CREF to divest
from companies "whose business supports Israel's occupation," and suggest that specific
issuers, such as Veolia Environment, should be targets for divestment. We respectfully
submit that, with the 2011 No-Action Letter, the Staff already has confirmed that a
shareholder proposal along these lines may be excluded from CREF's proxy materials
because it deals with a matter relating to CREF's ordinary business operations.

We anticipate that the Proponent will claim that, while the intent and substance of
the Proposal here is the same as the 2011 Proposal, the Proposal has been crafted in a
manner that the Proposal should not be viewed as related to CREF's ordinary business
7

Amendments to Rules on Shareholder Proposals, Exchange Act Release No. 40018 (May 21,
1998) ("Rule 14a-8 Release").
College Retirement Equities Fund, SEC No-Action Letter (pub. avail. May 3, 2004) ("2004
CREF Letter"); see also, Morgan Stanley Africa Investment Fund, Inc., SEC No-Action Letter
(pub. avail. Apr. 26, 1996) (noting that an investment company's ordinary business operations
include "the purchase and sale of securities and the management of the [t]und's portfolio
securities") and State Street Corp., SEC No-Action Letter (pub. avail. Feb. 24, 2009).

9

We note that both the 2011 Proposal and this Proposal were organized by the same advocacy
group, Jewish Voice for Peace ("NP"). Additional information abo)lt NP's efforts with regard
to both the 2011 Proposal and this Proposal here may be found at http://www.wedivest.org.

Page 3 of8

operations. This argument completely ignores the actual substance of the Proposal, which
is nearly identical to the 2011 Proposal:
~

Both the 2011 Proposal and this Proposal begin with "Whereas" clauses that note
CREF's longstanding commitment to social responsibility and ethical investing
principles;
Both the 2011 Proposal and this Proposal nonetheless criticize CREF for investing
in companies that, according to the Proposal, provide "support for the Israeli
occupation and segregated settlements in the West Bank, including East Jerusalem"
- including specific named issuers; and

~

Both call on CREF to divest from such companies.

The only difference in the two proposals is that the 2011 Proposal also calls on
CREF to engage with specific portfolio companies, and then to divest if "there is no
commitment to cooperate," while this Proposal does not call for CREF to engage -just to
divest. In this regard, the Proposal interferes with CREF's longstanding policy of engaging
in "quiet diplomacy" with portfolio companies, where appropriate, which is an integral part
of CREF's investment activities. The TIAA-CREF Policy Statement on Corporate
Governance ("Policy Statement") states:
Our preference is to engage privately with portfolio companies when we
perceive shortcomings in their governance or environmental and social
policies and practices that we believe impacts their performance. This
strategy of "quiet diplomacy" reflects our belief and past experience that
informed dialogue with board members and senior executives, rather
than public confrontation, will most likely lead to a mutually productive
outcome. 10
Thus, by mandating divestment in specific portfolio companies, the Proposal
interferes with CREF's longstanding policy of engaging in "quiet diplomacy" when
appropriate- an essential component ofCREF's ordinary business operations.
Notwithstanding the foregoing, we anticipate that the Proponent will ask the Staff
to focus on the fact that many of the words used in the Proposal this year are the same used
in proposals submitted by shareholders seeking divestment from companies that "contribute
to genocide, patterns of extraordinary and egregious violations of human rights, or crimes
against humanity" (the "Anti-Genocide Proposals"), where the Staff found that the ordinary
11
business operations exclusion did not apply. This argument completely ignores the actual
10

TIAA-CREF Policy Statement on Corporate Governance, at 4 (6th ed 2011).

11

See, e.g., Fidelity Aberdeen Trust, SEC No-Action Letter (pub. Avail. Jan. 22, 2008) (where the
proposal requested that the board "institute oversight procedures to screen out investments in

Page4 of8

substance of the Proposal, and how it is distinguishable from the substance of the AntiGenocide Proposals. The Anti-Genocide Proposals are aimed principally at companies
who, through their business dealings in Sudan or otherwise, are viewed as having
substantially contributed to genocide and egregious human rights violations. There exists a
broad consensus that the activities targeted in the Anti-Genocide Proposals - genocide and
egregious human rights violations in Sudan - are abhorrent, and deserving of universal
condemnation. In fact, the human rights violations in Sudan are so extreme that U.S.
companies are prohibited from doing business in Sudan. 12 Moreover, the U.S. Congress has
passed a law -the Sudan Accountability and Divestment Act of 2007 - that is designed to
make it easier for fiduciaries to divest from companies deemed to support human rights
atrocities in Sudan. 13

In contrast, the Proposal here attempts to embroil CREF in a highly controversial
geopolitical dispute of enormous complexity where - unlike the Anti-Genocide Proposals there is no broad consensus. United States companies are permitted to engage in business
dealings in Israel and the West Bank. Indeed, the United States adopted laws designed to
discourage and, in some circumstances, prohibit U.S. companies from furthering or
14
supporting foreign boycotts oflsrael.
We recognize the Commission's view that a shareholder proposal relating to
certain types of management functions may not be excludable under Rule 14a-8(i)(7) if the
proposal "would transcend the day-to-day business matters and raise policy issues so
significant that it would be appropriate for a shareholder vote." For the reasons noted above
and in our detailed correspondence with the Staff in connection with the 20 11 Proposal,
that is simply not the case here. The Proposal is designed to turn CREF's annual meeting of
shareholders into a forum for debate regarding, in the Proponent's words, "Israel's
occupation." This issue is not the type of widely-accepted, significant social policy issue
that would transcend the ordinary business exclusion. Indeed, the Proponent's claim that
the Proposal raises a significant policy issue is directly at odds with numerous prior
positions taken by the Staff- most recently affirmed by the 2011 No-Action Letter- where
the Staff has concluded that proposals concerning Israel and the West Bank do not raise

companies that, in the judgment of the Board, substantially contribute to genocide, patterns of
extraordinary and egregious violations of human rights, or crimes against humanity").
12

See, e.g., Sudanese Sanctions Regulations, 31 C.F.R. pt. 538.

13

Sudan Accountability and Divestment Act of 2007, Pub. L. No. 110-174 (Dec. 31, 2007).

14

See 15 C.F.R. pt. 750 (anti-boycott regulations under the Export Administration Act); see also,
U.S. Department of Commerce: Bureau of Industry and Security, Anti-Boycott Compliance,
available at http://www.bis.doc.gov/complianceandenforcement/antiboycottcompliance.htm.

Page 5 of 8

significant policy issues sufficient to trump the "ordinary business operations" exclusion in
15
Rule 14a-8(i)(7).
For all the foregoing reasons, the Proposal deals with matters that are fundamental
to CREF's ordinary business operations, and accordingly may be excluded from CREF's
proxy materials pursuant to Rule 14a-8(i)(7).
B.

The Proposal may be excluded under Rule 14a-8(i)(l 0) because the
essential objectives of the Proposal have already been substantially
implemented.

While we believe the 2011 No-Action Letter provides an adequate basis- standing
alone - for excluding the Proposal, we think it appropriate to address an additional reason
why the Proposal should be excluded from the 2013 Proxy Materials.
Rule 14a-8(i)(10) permits omission of a shareholder proposal if "the company has
already substantially implemented the proposal." The Staff has stated that "a determination
that [a] [c]ompany has substantially implemented the proposal depends upon whether its
particular policies, practices and procedures compare favorably with the guidelines of the
proposal." 16 Significantly, when applying the substantial implementation standard, a
17
proposal need not be "fully effected." Rather, the Staff will grant no-action assurance
when a company has implemented the essential objective of a proposal, even in cases
where the company's actions do not fully comply with the specific dictates of the
18
proposal.
In this case, the essential objective of the Proposal is to "end investments in
companies that, in the trustees' judgment, substantially contribute to or enable egregious
violations of human rights . . . ." 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. Indeed, the Proposal itself acknowledges TIAA19
CREF's existing practices in this area. TIAA-CREF's policies and practices are included
15

See, e.g., AT&T Inc., SEC No-Action Letter (pub. avail. Jan. 30, 1992) (addressing the

exclusion in 14a-8(i)(5), concluding "the policy issue raised by the proposal, Israel's treatment
of Palestinians, is not significant, and in fact is not related to the Company's business").
16

See Texaco Inc., SEC No-Action Letter (pub. avail. Mar. 28, 1991).

17

Exchange Act Release No. 20091, 48 FR 35082 (Aug. 16, 1983).

18

See, e.g., Freeport-McMoRan Copper & Gold, Inc., SEC No-Action Letter (pub. avail. Mar. 5,
2003) (company already had implemented a human rights policy, even though the specific
elements of the policy did not meet the shareholder proponent's objectives); see also AMR
Corp., SEC No-Action Letter (pub. avail. Apr. 17, 2000) and Kmart Corp., SEC No-Action
Letter (pub. avail. Mar. 12, 1999).

19

From the Proposal: "TIAA-CREF believes that when companies focus on being socially
responsible, they may reduce risk and thereby achieve better fmancial performance"; and

Page 6 of 8

in the Policy Statement, which sets forth corporate governance and social responsibility
practices that TIAA-CREF expects of portfolio companies. The Policy Statement provides:
"companies should strive to respect [human] rights by developing
policies and practices to avoid infringing on the rights of workers,
communities and other stakeholders throughout their global operations ..
. . Companies should pay heightened attention to human rights in regions
characterized by conflict or weak governance .... "
Moreover, the Policy Statement addresses divestment, noting that:
"[TIAA-CREF] may, as a last resort, consider divesting from companies
we judge to be complicit in genocide and crimes against humanity, the
most serious human rights violations, after sustained efforts at dialogue
have failed and divestment can be undertaken in a manner consistent
with our fiduciary duties."
In this case, the Policy Statement and CREF's practices thereunder address the
Proposal's essential objectives of ending investments in companies that, in CREF's
judgment, substantially contribute to or enable egregious violations of human rights.
Accordingly, CREF already has developed and implemented a comprehensive policy that
"compares favorably with the guidelines of the [P]roposal" and that implements the
essential objective of the Proposal. Indeed, to the extent Proponent disagrees with the
implementation of that policy, such disagreement only highlights why the Proposal should
be excluded as infringing on CREF's "ordinary business operations" as described above.
Therefore, the Proposal may be omitted from CREF's 2013 Proxy Materials pursuant to
Rule 14a-8(i)(l 0).

II.

CONCLUSION

In view of the fact that (1) the Proposal deals with matters relating to CREF's
ordinary business operations, and (2) the Proposal is already substantially implemented, it
is our opinion that CREF, in accordance with Rules 14a-8(i)(7) and 14a-8(i)(l 0), is
permitted to exclude the Proposal from its 2013 Proxy Materials. Based on the foregoing,
CREF respectfully requests confirmation from the Staff that it will not recommend
enforcement action to the Commission ifCREF excludes the Proposal from its 2013 Proxy
Materials.
If the Staff disagrees with our conclusion that the Proposal may be excluded from
CREF's 2013 Proxy Materials, we would appreciate an opportunity to discuss the matter
with the Staff prior to issuance of its formal response. As required by Rule 14a-8(j), six
"TIAA-CREF's Social Choice accounts invest based on environmental, social and governance
(ESG) criteria, including a commitment to honor human rights."

Page 7 of 8

copies of this letter and its attachments are enclosed and a copy is being forwarded
concurrently to the Proponent.
Very truly yours,

Phillip T. Rollock
Senior Managing Director and
Corporate Secretary
College Retirement Equities Fund

cc:

JeffreyS. Puretz, Esq. Dechert LLP
Thomas C. Bogle, Esq. Dechert LLP
Adam T. Teufel, Esq. Dechert LLP

Attachments:
Proposal (Exhibit A)
2011 No-Action Letter (Exhibit B)

17982507

Page 8 of 8

Exhibit A

january 14, 2013
Phillip T. Rollock
Senior VP and Corporate Secretary
TIAA-CREF I Financial Services
730 Third Avenue, 12th Floor
New York, NY 10017
Via fax: 212-916-6800 (3 pages including this one)
Dear Mr. Rollock:
I submit the accompanying proposal to CREF for inclusion in the 2013 proxy statement
under Rule 14 a-8 of the General Rules and Regulations of the Securities and Exchange Act of 1934.
It requests the Board 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.
I have held investments with CREF worth more than $2,000 in market value continuously
for the past year. I intend to continue to hold CREF investments of at least this value through the
date of the 2013 CREF annual meeting of shareholders and will attend that meeting to present the
proposal below, either personally or by a representative qualified under state law to present the
proposal on my behalf. I am the lead filer of this proposal.
If it is the company's intent to exclude my proposal, I am by this letter asking that you
simultaneously send me, upon filing, a copy of your submission under SEC Rule 14a-8. If you
intend or are required to include the accompanying resolution in the proxy statement, please send
me a copy of any statement in opposition to my proposal that you may decide to include, as soon as
it is ready and in no event later than 30 calendar days before TIAA-CREF files definitive copies of its
proxy statement and form of proxy under Rule 14a-6 or five calendar days after you receive a copy
of any revised proposal that I may file in order to comply with any SEC requirements for including it
with proxy materials.

If the information provided in this letter is insufficient for you to confirm my eligibility as a
qualified filer of the accompanying resolution, please notify me in writing by email and letter as
soon as possible, and no later than 14 calendar days of receiving this letter, of any procedural or
eligibility deficiencies, as well as of the deadline by which you will need to receive my response. If I
am able to correct the deficiency, I will email my response to you by that deadline.
Sincerely yours,

Steve Tamari
8 Oakdale Lake
Glen Carbon, IL 62034

Enclosure: Shareholder proposal

WHEREAS,
TIAA-CREF believes that when companies focus on being socially responsible,
they may reduce risk and thereby achieve better financial performance;
TIAA-CREF's Social Choice accounts invest based on environmental, social, and
governance (ESG) criteria, including a commitment to honor human rights;
As a signatory to the UN Principles for Responsible Investing, TIAA-CREF
"incorporate[s] ESG issues into investment analysis and decision-making
processes";
Despite those policies, CREF nevertheless invests in companies whose
operations raise serious human rights concerns. For example, its Social Choice
accounts include investments in Veolia Environment;
Veolia Environment and its subsidiaries operate the Tovlan Landfill in the
occupied West Bank, processing and dumping waste materials there from Israel
and illegal West Bank settlements, in violation of a UN General Assembly
Resolution calling upon Israel to cease dumping such waste on occupied
Palestinian land;
Veolia Environment owns at least 40% of Transdev, which through its
subsidiaries operates segregated bus services to Israeli settlers in the occupied
West Bank and a light rail that connects illegal West Bank settlements to
Jerusalem;
Investments in companies providing support for the Israeli occupation
and segregated settlements in the West Bank, including East Jerusalem,
represent a significant policy issue:
The International Court of Justice concluded in 2004 that "the Israeli
settlements in the Occupied Palestinian Territory (including East
Jerusalem) have been established in breach of international law";

Israel continues to maintain and even accelerate settlement of the West
Bank and East Jerusalem, even after the UN General Assembly in
December 2012 recognized Palestine as a non-member state, with only
eight countries voting "nay";
The U.S. officially opposes continued Israeli settlement activity;
Human Rights Watch calls on companies that "contribute to and/or
benefit from violations of Palestinian residents' human rights" to either
end their involvement in such violations or end operations altogether,
"where business activity directly contributes to serious violations of
international law, including prohibitions against discrimination";
The U.N. Special Rapporteur on the situation of human rights in the
occupied Palestinian territories has recommended boycotting such
companies, including Veolia Environment, and has warned that these
companies may expect damage to their public image, impact on
shareholder decisions and share price, and potential criminal or civil
liability for breaches of international human rights and humanitarian Jaw;
Leaders of 15 major churches in the U.S. in October 2012 called on
Congress to suspend U.S. military aid to Israel if investigation discloses
that Israel is using such aid in violation of U.S Jaw;
The United Methodist and Presbyterian Church (USA) and the United
Church of Canada have called for boycott of Israeli settlement goods;
South Africa, the U.K., and Denmark advise that settlement goods not be
labeled as 'Made in Israel,' and over 20 NGOs are asking the European
Union to take similar steps;
THEREFORE, shareholders request that the Board 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.

Exhibit B

No-Action Letter: College Retirement Equities Fund ("Fund") Shareholder Proposal of A...

Page 1 of2

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.S. Secunties and Exchange Comm1ssio

Securities Exchange Act of 1934 - Rule 14a-S(i)(7)
College Retirement Equities Fund ("Fund") Shareholder Proposal of
Aaron Levitt
May 6, 2011
William J. Mostyn, III
Senior Vice President and
Corporate Secretary
TIAA-CREF
One Beacon Street
Boston, MA 02108
Re: College Retirement Equities Fund ("Fund")
Shareholder Proposal of Aaron Levitt
Dear Mr. Mostyn:
In a letter dated March 22, 2011, you notified the staff of the Securities and
Exchange Commission ("Commission") that the Fund intends to exclude
from its proxy materials for its 2011 annual meeting a shareholder proposal
submitted by letter dated February 11, 2011, from Aaron Levitt.l The
proposal provides:
THEREFORE BE IT RESOLVED that the participants request CREF to
engage with corporations in its portfolio, such as Caterpillar, Veolia, and
Elbit, that operate on the West Bank and East Jerusalem with the goal
of ending all practices by which they profit from the Israeli occupation.
If, by the annual meeting of 2012, there is no commitment to
cooperate, CREF should consider divesting as soon as market conditions
permit.
There appears to be some basis for your view that the proposal may be
omitted from the Fund's proxy materials pursuant to Rule 14a-8(i)(7) under
the Securities Exchange Act of 1934, as relating to CREF's ordinary
business operations.
Accordingly, the Division will not recommend enforcement action to the
Commission if CREF excludes the proposal from its proxy materials in
reliance on Rule 14a-8(i)(7). In reaching this position, we have not found it
necessary to address the alternative bases for omission set forth in your
letter.
Because our position is based upon the facts recited in your letter, different
facts or conditions or additional facts or conditions may require a different
conclusion. Further, this response only expresses our position on
enforcement action under Rule 14a-8 and does not express any legal
conclusion on the issues presented.

http://www.sec.gov/divisions/investment/noaction/20 11/cref-levitt050611-14a8.htm

3/22/2013

No-Action Letter: College Retirement Equities Fund ("Fund") Shareholder Proposal of A..

Page 2 of 2

Attached is a description of the informal procedures the Division follows in
responding to shareholder proposals. If you have any questions or
comments concerning this matter, please call me at (202) 551-6795.
Sincerely,
Michael L. Kosoff
Branch Chief
Attachment
cc: Aaron Levitt
1 We also received a letter submitted on behalf of the proponent dated April

21, 2011, and a letter from the Fund dated April 27, 2011.

Incoming Letters
• TIAA CREF Initial Submission (March 22, 2011)
• Proponent's Letter (April 21, 2011)
• TIAA CREF Response (April 27, 2011)

http:/jwww.sec.govjdivisionsjinvestmentjnoactionj2011jcref-levitt05061114a8.htm
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Modified: 05/06/2011

http://www.sec.gov/divisions/investment/noaction/20 lllcref-levitt050611-14a8.htm

3/22/2013

William J. Mostyn, Ill
Senior Vice President and
Corporate Secretary
Tel: (617) 788-5969
Fax: (617) 788-5959
wmostyn@tiaa-cref.org

TlAA
CREF
FINAI'ICIAL SERVICES
FOR THE GREATER GOOD'

April27, 2011

VIA HAND DELIVERY
William J. Kotapish, Esq.
Assistant Director
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N .E.
Washington, DC 20549
Re:

The College Retirement Equities Fund- 2011 Annual Meeting
Omission of Shareholder Proposal of Aaron Levitt et al.

Dear Mr. Kotapish:
This letter responds to the submission to you from Paul M. Neuhauser dated April 21, 2011
concerning our request dated March 22,2011 to omit from CREF's 2011 Proxy Materials a
proposal for shareholder action, together with a supporting statement, on the following
resolution (the "Proposal"):
THEREFORE BE IT RESOLVED that the participants request CREF to
engage with corporations in its portfolio, such as Caterpillar, Veolia, and
Elbit, that operate on the West Bank and East Jerusalem with the goal of
ending all practices by which they profit from the Israeli occupation. If, by
the annual meeting of2012, there is no commitment from these companies
to cooperate, CREF should consider divesting as soon as market conditions
permit.
Mr. Neuhauser's letter expresses the opinion that the Proposal "must be included in
CREF's year 2011 proxy statement and that it is not excludable by virtue of any of the cited
rules."
For the reasons stated in our March 22 letter, we disagree with Mr. Neuhauser's opinion
and believe the Proposal is properly excludable. In addition, we have the following
specific responses to Mr. Neuhauser's submission (the "Submission") that we ask the staff
consider in responding to our request.
1.

The Submission misunderstands the nature of the "substantially implemented"
exclusion

The Submission relies on a narrow and technical reading of the exclusion, which would
require precise execution of each literal term of a proposal. On the contrary, the exclusion

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requires only that the issuer have implemented the "essential objective" of the proposal,
even where the company's actions do not fully comply with the specific dictates of the
proposal. 1
The essential objective of the Proposal is engagement of portfolio companies and
consideration of divestment in appropriate cases. As more fully described in our March 22
letter, CREF fulfills this objective on an ongoing basis, in accordance with the TIAACREF Policy Statement on Corporate Governance (the "Policy Statement"), which
provides for review and engagement with portfolio companies on a broad range of social,
environmental and governance issues, including human rights? And, in one recent
instance, as a result of this process, CREF determined to divest from companies with
material business dealings in Sudan. Clearly, this is a meaningful process that the
organization treats with the utmost seriousness.
Indeed, Mr. Neuhauser's own characterization of the Proposal makes clear that it has been
substantially implemented. The Submission describes the essential objective of the
Proposal as "request[ing] CREF to review its investments in companies that operate in the
occupied territories of the West Bank and Jerusalem." By his own words, he recognizes
that review is the key. As noted above, a review of portfolio companies is a central
component of the Policy Statement. Accordingly, the Proposal has been substantially
implemented. 3
2.

The Submission incorrectly states that "the Staff has long held that shareholder
proposals concerning human rights abuses in the Occupied Territories raise
important policy issues"

The Submission relies on a 1991 letter to American Telephone & Telegraph Company for
the proposition that "the Staff has already opined that shareholder proposals concerning
human rights abuses in the Occupied Territories do, indeed, raise a significant policy
issue." In fact, the following year, the staff stated the opposite view in a letter to the same
issuer: "the policy issue raised by the proposal, Israel's treatment of Palestinians, is not
signifi£ant, and in fact is not related, to the Company's business." (emphasis added). 4
See Caterpillar Inc., SEC No-Action Letter (avail. Mar. II, 2008); Wal-Mart Stores, Inc., SEC No-Action Letter
(avail. Mar. 10, 2008); PG&E Corp., SEC No-Action Letter (avail. Mar. 6, 2008); The Dow Chemical Co., SEC
No-Action Letter (avail. Mar. 5, 2008); Johnson & Johnson, SEC No-Action Letter (avail. Feb. 22, 2008).
The Submission mistakenly states that TIAA-CREF's "ESG" strategy for socially responsible investing, referred
to in note 20 of our March 22 letter, "applies solely to environmental matters." "ESG" refers to environmental,
social and governance issues, and extends to human rights issues, among other social issues. Also, this strategy
applies to all CREF public equity portfolio investments, not just those in its Social Choice Account.
To the extent the Submission mischaracterizes the Proposal, and the proponents in fact seek specific investment
activities and decisions rather than review, the Proposal impermissibly interferes with the conduct of CREF's
ordinary business operations and is excludable under the "ordinary business" exclusion of Rule 14a-8(iX7).
American Telephone & Telegraph Co., SEC No-Action Letter (avail. Jan 30, 1992) (emphasis added). In this
case, after the staff issued its letter finding that the issue was not significant and that the proposal could be
excluded, the proponents appealed the decision to the Chairman of the Commission asking for formal review and
reversal by the Commission. The Commission declined to review the Division's position. See Staff Reply Letter
to Dr. William Pierce, Chairman ofThe National Alliance (February 20, 1992).

Page 2of 5

While the two letters addressed different provisions of Rule 14a-8, we do not see how a
policy issue can be both significant and not significant at the same time. Accordingly, we
do not believe - and do not think it is the common understanding - that following the
second letter it has been the staffs "long held" view that shareholder proposals concerning
"human rights abuses in the Occupied Territories" raise significant policy issues requiring
their inclusion in proxy materials.
3.

There is no bright-line rule requiring inclusion of proposals self-designated as
"human rights proposals"

Mr. Neuhauser argues that any shareholder proposal that refers to human rights raises a
significant policy issue and must, by that reason alone, survive any exclusion challenge.
This "bright-line" approach conflicts with the longstanding views of the Commission and
its staff that the determination of whether there is a significant policy issue must be made
on a case by case basis, after considering "factors such as the nature of the proposal and the
circumstances of the relevant company."5 The staffs determination under the ordinary
business exclusion requires exercise of its judgment in applying the relevant standards to
the facts at hand. The Commission requires these judgments to include:
•

whether a particular proposal relates to activities that are "so fundamental to
management's ability to run a company on a day-to-day basis that they could not,
as a practical matter, be subject to direct shareholder oversight";

•

whether a particular social policy issue would "transcend the day-to-day business
matters and raise policy issues so significant that it would be appropriate for a
shareholder vote"; and

•

whether the proposal "prob[es] too deeply into matters of a complex nature upon
which shareholders, as a group, would not be in a position to make an informed
judgment."

In fact, the staff has tried a bright-line approach in the past, but abandoned it in favor ofthe
case-by-case analytical approach.6
As we explain in our March 22 letter, exclusion of the Proposal under Rule 14a-8(i)(7) is
appropriate based on the circumstances of this case - CREF's specific business operations,
the nature of this particular Proposal, and relevant precedents, including precedents
specifically relating to CREF. The fact that the staff has required different proposals
submitted to other companies with different business operations to be included in those
Exchange Act Release No. 40018 (May 21, 1998), cited in Staff Legal Bulletin No. 14 (CF) dated July 13, 2001
available at http://sec.gov/interpsllegal/c!Slb 14.htm
/d. at§ III (see discussion of the no-action position taken in Cracker Barrel, SEC No-Action Letter (avail. Oct. 13,

1992)).

Page 3of 5

companies' proxy materials does not create a general "human rights" rule that trumps all
other exclusions and circumstances. 7

4.

The Submission inappropriately probes into matters of a complex nature upon
which shareholders, as a group, will not be in a position to make an informed
judgment

The Submission asserts that there is a worldwide consensus on the validity of the
allegations made in the Proposal, similar to the consensus regarding human rights
violations in Sudan. In fact, Mr. Neuhauser states that anyone who disagrees with the view
expressed by his clients "stands virtually alone."8 As discussed in our March 22 letter, we
believe the Proposal inappropriately seeks a shareholder referendum on a complex and
highly controversial geopolitical dispute. This is a classic instance of a proposal that
"prob[es] too deeply into matters of a complex nature upon which shareholders, as a group,
would not be in a position to make an informed judgment."9 Moreover, based on the onesided view the Submission takes on this controversial and complex issue, reflecting a denial
even of the existence of any good faith views that differ with those of the Proponents, we
continue to believe that the debate likely to arise from putting this issue in the CREF Proxy
Materials will not and cannot be full, fair and consistent with the spirit ofRule 14a-9.
For these reasons, and the reasons set forth in our March 22 letter, we again respectfully
request that the Staff confirm it will not recommend enforcement action if CREF excludes
the Proposal from its 2011 Proxy Statement. 10
In seeking to justifY his opinion under the ordinary business exclusion, Mr. Neuhauser cites only a single authority
involving an investment company. In that case (Fidelity Funds, SEC No-Action Letter (avail. January 22, 2008)),
the proposal was entirely different from the Proposal at issue here, and thus provides no meaningful guidance.
Among other differences, the resolution proposed (which is set forth below) was general in nature, and requested
oversight procedures that defer to the judgment of the Board (rather than dictating specific investment actions and
timeframes). Moreover, as the supporting statement indicates, the resolution was directed to activities in Sudan,
where as Mr. Neuhauser himself points out, United States law prohibits direct investment, and indeed facilitates
divestment in companies that do business in Sudan. See Sudan Accountability and Divestment Act of2007, Pub.
L. No. 110-174, 121 Stat. 2516 (2007). In stark contrast, the United States does not prohibit investment in Israel,
or facilitate divestment from companies that do business in Israel. Indeed, United States law specifically prohibits
companies from taking certain actions in furtherance of various boycotts against Israel. See Export Administration
Amendments of 1977, Pub. L. No. 95-52,91 Stat. 1625 (1977); see also, Ribicoff Amendment to the Tax Reform
Act of1976 Pub. L. 94-455,90 Stat. 1520 (1976), which added section 999 to the Internal Revenue Code of 1986,
as amended 26 U.S.C. §I et seq. The resolution in the Fidelity Funds proposal is as follows:
"RESOLVED: In order to ensure that Fidelity is an ethically managed company that respects the
spirit of international law and is a responsible member of society, shareholders request that the
Fund's Board institute oversight procedures to screen out investments in companies that, in the
judgment of the Board, substantially contribute to genocide, patterns of extraordinary and
egregious violations of human rights, or crimes against humanity."
The Submission erroneously implies that TIAA-CREF has expressed these views. TIAA-CREF has not expressed
a view on these issues.
Exchange Act Release No. 40018 at § III.
10

We also note that Mr. Neuhauser states that the twenty-four identical proposals submitted were ')ointly submitted"
and "co-sponsored" by all individual proponents, and for that reason requests that all of the proponents be named
in the proxy materials. We did not interpret the submissions in this manner, but would defer to Mr. Neuhauser's

Page4 of 5

Yours truly,

h~f~~~
William J. Mostyn, III
Senior Vice President and Corporate Secretary
College Retirement Equities Fund

Cc:

Jeffrey S. Puretz, Esq. Dechert LLP
Ruth S. Epstein, Esq. Dechert LLP

characterization of a joint submission. If the staff agrees that the Proposal may be omitted, this request would be
moot.

Page 5 of 5

PAUL M. NEUHAUSER
Attorney at Law (Admitted New York and Iowa)
1253 North Basin Lane
Siesta Key
Sarasota, FL 34242
Email: pmneuhauser@aol.com

Tel and Fax: (941) 349-6164

April21, 2011
Securities & Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Att: William J. Kotapish, Esq.
Assistant Director
Division of Investment Management
Via email to shareholderproposals@sec.gov
Re: Shareholder Proposal submitted to the College Retirement Equities Fund

Dear Sir/Madam:
I have been asked by the more than 20 participants (hereinafter referred to as
the "Proponents") in the College Retirement Equities Fund (hereinafter referred to
as "CREF" or the "Company"), who have jointly submitted a shareholder proposal
to CREF, to respond to the letter dated March 22, 2011, sent to the Securities &
Exchange Commission by CREF, in which CREF contends that the Proponents'
shareholder proposal may be excluded from the Company's year 2011 proxy
statement by virtue ofRules 14a-8(i)(11), 14a-8(i)(7), 14a-8(i)(10) and 14a-8(i)(3).
I have reviewed the Proponents' shareholder proposal, as well as the
aforesaid letter sent by CREF, and based upon the foregoing, as well as upon a
review of Rule 14a-8, it is my opinion that the Proponents' shareholder proposal
must be included in CREF' s year 2011 proxy statement and that it is not
excludable by virtue of any of the cited rules.
I

The Proponents' shareholder proposal requests CREF to review its
investments in companies that operate in the occupied territories of the West Bank
and Jerusalem.

RULE 14a-8(i)(l1)
We note that CREF states in footnote 1 on page one of its letter to the
Commission that it "intends to exclude all of the other proposals" other than that
submitted by Mr. Aaron Levitt "on the grounds that they are duplicative" of the
proposal submitted by Mr. Levitt. However, CREF acknowledges that all such
"participants indicate that Mr. Aaron Levitt will act as the lead filer". Under these
circumstances, the various participants are acting as co-proponents with Mr. Levitt
and under Rule 14a-8 their co-sponsorship must be acknowledged by CREF.
The purpose of Rule 14a-8(i)(11) is "to eliminate the possibility of
shareholders having to consider two or more substantially identical proposals".
Release 34-12,598 (July 7, 1976). However, the purpose of that Rule is not to
eliminate the co-sponsorship of a single proposal by multiple shareholders or
participants.
The Proponents do not intend, and never have intended, that more than one
shareholder proposal appear in the Company's proxy statement. On the contrary,
as noted by CREF in the cited footnote, they intended to be co-sponsors of the
same proposal, and not to be independent sponsors of separate proposals.
It is therefore factually apparent that only one shareholder proposal has been
submitted to CREF, which shareholder proposal is co-sponsored by the various
participants. Under these circumstances, only one shareholder proposal is to be
placed in the proxy statement, but the Company must recognize all co-sponsors of
the proposal. In this connection, it should be noted that the Staff has explicitly
recognized that proposals can be co-sponsored by more than one shareholder. See
Staff Legal Bulletin No. 14C, Section H (June 28, 2005); Staff Legal Bulletin No.
14, Section B.l5 (July 13, 2001).
A virtually identical fact situation was considered by the Staff in connection
with the denial of a no-action request in ConocoPhillips (February 22, 2006). In
that letter, the Staff stated:
2

We are unable to concur in your view that ConocoPhillips may exclude the
proposals under rule 14a-8(i)(11). It appears to us that the School Sisters of
Notre Dame, the Church Pension Fund and Bon Secours Health System,
Inc., have indicated their intention to co-sponsor the proposal submitted by
the Domestic & Foreign Missionary Society of the Episcopal Church.
In other situations factually virtually identical to the instant one, the Staff in
has reached the identical result that it reached in the ConocoPhillips letter. See
Caterpillar, Inc. (March 26, 2008); Tyson Foods, Inc. (December 15, 2009).
In conclusion, it is factually clear that each of the Proponents has jointly cosponsored a single shareholder proposal (and not submitted separate proposals) and
that such co-sponsorship is contemplated by Rule 14a-8.
For the foregoing reasons, the Company has failed to carry its burden of
proving that the exclusion of Rule 14a-8(i)(11) applies to the shareholder proposal
submitted by any of the Proponents.

RULE 14a-8(i)(10)
CREF has not substantially implemented the Proponents' shareholder
proposal.
The Company's claim to mootness is based in part on footnote 20, on page 6
of its letter. However, all three of the "strategies" delineated there are irrelevant to
the Proponents' shareholder proposals, since (1) applies solely to the Company's
small Social Choice Account and not to its principal investment vehicles; (2)
applies solely to environmental matters; and (3) applies solely to pro-active socalled "alternative investing". None of these three "strategies" relates in any way
whatsoever to the Proponents' human rights concerns.
In addition, the Company claims that its so-called "Policy Statement on
Corporate Governance" renders the Proponents' proposal moot. Although this
Corporate Governance statement makes reference to human rights, there is
ABSOLUTLY no claim made by CREF in its letter that it has ever ENGAGED
with ANY portfolio company about human rights issues in the Occupied
Territories (or indeed on any human rights matter other than on the Sudan, a
country with respect to which the United States law prohibits investment). In this
3

connection, we note that although CREF states that it has voted on a general
human rights shareholder proposal at Caterpillar, the Company makes no claim
that it has ever undertaken with Caterpillar in the type of activity requested by the
shareholder proposal, namely to "engage" with portfolio companies in order to
achieve a "goal of ending all practices by which they profit from the Israeli
occupation". We also note that Caterpillar is but one of several companies in the
CREF portfolio that has some connection to the Occupied Territories, and even if
CREF were actually to engage with a single portfolio company, that could never
"substantially implement" the proposal when the portfolio contains numerous
companies with such a connection.
The Proponents are requesting the Company to take exactly the type of proactive stance that it took with respect to portfolio investments in companies that
were operating in the Sudan. Since CREF has done nothing of the sort, it has
failed to establish the applicability ofRule 14a-8(i)(10) the Proponents'
shareholder proposal.

RULE 14a-8(i)(7)

The proposal raises a significant policy issue that precludes its
exclusion on ordinary business grounds.
We are surprised that CREF has argued that the proposal is excludable
because it deals with the ordinary business operations of the Company. In so doing
CREF not only fails to apply to the instant proposal the consistent Staff position
that human rights proposals raise significant policy issues, but it also fails to note
that the Staff has ruled that proposals submitted to portfolio managers with respect
to the human rights related activities of their portfolio companies are not
excludable under the "ordinary business" rubric for the simple reason that they
raise significant policy issues for the portfolio manager. Fidelity Funds (January
22, 2008). Finally, CREF has failed to appreciate the fact that the Staff has already
opined that shareholder proposals concerning human rights abuses in the Occupied
Territories do, indeed, raise a significant policy issue. American Telephone and
Telegraph Company (January 16, 1991)
The Commission has stated that the "ordinary business" exclusion of Rule
14a-8(i)(7) is inapplicable if the proposal raises an important social policy issue.
See Release 34-40018 (May 21, 1998) (proposals that relate to ordinary business
matters but that focus on "sufficiently significant policy issues ... would not be
4

considered excludable, because the proposals would transcend the day to day
business matters ...."). We doubt that anyone would seriously contend that a
shareholder proposal, such as that submitted by the Proponents, that implicates
violations of human rights fails to meet this standard. Thus, the Staff has
consistently and uniformly found that human rights proposals raise significant
policy issues. See, e.g., Halliburton Company (March 9, 2009); Chevron
Corporation (March 21, 2008); American International Group, Inc., (March 14,
2008); Nucor Corporation (March 6, 2008); Bank ofAmerica Corporation
(February 29, 2008); Abbott Laboratories (February 28, 2008); PepsiCo, Inc.
(February 28, 2008); Citigroup Inc. (February 21, 2008); Certain Fidelity Funds
(January 22, 2008); Yahoo! Inc. (April16, 2007); V.F. Corporation (February 13,
2004); E.I. duPont de Nemours and Company (February 11, 2004); BJ Services
Company (December 10, 2003; The TJX Companies, Inc. (AprilS, 2002); WalMart Stores, Inc. (April3, 2002); E.I. duPont de Nemours and Company (March
11, 2002); The Stride Rite Corporation (January 16, 2002); American Eagle
Outfitters, Inc. (March 20,2001: PPG Industries, Inc. (January 22, 2001),
As noted above, the Staff has applied identical analysis to a human rights
proposal submitted to a portfolio manager (similar to CREF) and found that that
proposal does, in fact, raise a significant policy issue for the portfolio manager.
Fidelity Funds (January 22, 2008).
The Staff no-action letters cited by the Company are inapposite. The
shareholder proposal in the CREF no-action letter of September 7, 2000 (cited in
footnote 8 on page 4 of the Company's letter) did not raise a human rights concern.
Furthermore, it requested the divestiture of only one named company. On its face,
therefore, that shareholder proposal did not raise a general policy issue for the
registrant. In contrast, the Proponents' proposal is general in nature, applicable to
the entire portfolio, thereby raising a policy issue for the registrant. The fact that
the proposal cites three specific companies that may be involved in the Occupied
Territories does not in any way detract from the fact that the proposal is not limited
to those specific companies, but rather applies to all companies in the portfolio.
Furthermore, although the shareholder proposal at issue in 2000 called for the
divestment of a specific issuer, the Proponents' proposal merely asks CREF to
"consider" divesting if the portfolio companies' conduct remains unchanged. In
other words, it requests only engagement with the portfolio companies. As far as
the CREF no-action letter of March 25,2005 is concerned, the proposal at issue
there failed to raise a significant policy issue since the underlying actions by the
portfolio companies did not implicate any significant policy issue whatsoever.
Finally, the AT&T, Hewlett-Packard and Motorola no-action letters cited in
5

footnote 14 (page 5) did not involve Rule 14a-8(i)(7), but rather another exclusion
under the rule. Consequently, they are irrelevant to the question of whether Rule
14a-8(i)(7) bars the Proponents' shareholder proposal.
In addition, we note that the Company contends that implementation of the
Proponents' shareholder proposal would interfere with its policy of choosing
"quiet diplomacy". (See first sentence of second full paragraph, page 4 of its
letter.) However, such quiet diplomacy is exactly what the proposal is requesting,
but there is not one iota of evidence that CREF has actually engaged in any "quiet
diplomacy" with respect to the issue at hand. (See Rule 14a-8(i)(10) discussion
above.)
Finally, we note that the Company contends that no significant policy issue
is involved, apparently because it does not believe that human rights issues are
implicated by Israeli activities in the Occupied Territories. (See the carryover
sentence on pages 5-6 of its letter.)
In this, the Company stands virtually alone.
For example, the most recent (2011) Report of Human Rights Watch has the
following to say about the human right situation in Israeli occupied West Bank:

World Report 2011: Israel/Occupied Palestinian Territories
Events of2010
The human rights crisis (emphasis supplied) in the Occupied Palestinian
Territories (OPT) continued in 2010, despite marginal improvements ....
In the West Bank, including East Jerusalem, Israel imposed severe
restrictions on Palestinian freedom of movement, demolished scores of
homes under discriminatory practices, continued unlawful settlement
construction and arbitrarily detained children and adults ....
Israeli forces in the West Bank killed at least seven Palestinian civilians as
of October. According to B'Tselem, those killed, including two young men
collecting scrap metal and two children participating in a demonstration
inside their village, posed no danger to Israeli military forces or civilians.
Israeli settlers destroyed or damages mosques, olive trees, cars, and other
Palestinian property, and physically assaulted Palestinians. . . Israeli
authorities arrested numerous settlers but convicted few ....
Israel maintained onerous restrictions on the movement of Palestinians in the
West Bank... It removed some closure obstacles, but more than 500
remained ... .
6

Israeli military justice authorities detained Palestinians who advocated nonviolent protest against Israeli settlements and the route of the separation
barrier....
As of September, Israel held 189 Palestinians in administrative detention
without charge.
On January 11, 2011, Human Rights Watch issued a press release entitled
"Israel/West Bank: Jail for Peaceful Protesters" in which it stated that the
conviction of a Palestinian had raised "grave due process concerns". It further
stated that "the conviction was based on allegations that did not specify any
particular incidents of wrongdoing and on statements by children who retracted
them in court" and who had been interrogated in Hebrew, a language they did not
understand. (See www.hrw.org/en/news/2011/01/12/israelwest-bank)
In addition, Human Rights Watch published last December a report on
businesses that profit from doing business with West Bank settlements, and made
several recommendation, including implementing "strategies to prevent and
mitigate any corporate involvement in such [human rights] abuses" and "where
business activity directly contributes to serious violations of international law ...
take action to end such involvement in legal violations, including where necessary
ending such operations altogether". See Separate and Unequal, subpart II,
"Recommendations to Businesses Profiting from Settlements". (December 19,
201 0) www .hrw .org/en/reports/20 10/12/19
Similarly, Freedom House (20 10 edition), which rates the status of all of the
nations of the world, ranks the Occupied Territories as follows (where 1 is the
highest and 7 the lowest):
Political Rights Score: 6
Civil Liberties Score: 6
Status: Not Free
Other nations equally ranked as "6" include such human rights abusers as
Afghanistan, Iran, Tunisia,. Vietnam and Zimbabwe, and are ranked just barely
above nations such as China, Cuba, Saudi Arabia and Syria.(See
www.freedomhouse.org.)
The U.S. Department of State publishes annually a Report on Human Rights
Practices in every nation around the globe. Its 2010 Country Report for the
Occupied Territories included the following in its introduction:
7

Principal human rights problems related to Israeli authorities in the West
Bank were reports of excessive use of force against civilians, including
killings, torture of Palestinian detainees, improper use of security detention
procedures, austere and overcrowded detention facilities, demolition and
confiscation of Palestinian properties, limits on freedom of speech and
assembly, and severe restrictions on Palestinians' internal and external
freedom of movement.
Consequently, it is scarcely surprising that the Staff has long held that
shareholder proposals concerning human rights abuses in the Occupied Territories
raise important policy issues. American Telephone and Telegraph Company
(January 16, 1991).
In addition, it should be noted that divestiture of companies involved in
business in the West Bank have taken place at a number of European financial
institutions, including the Norwegian governmental pension plan, the largest
Swedish pension plan, Danske Bank, Folksam (Sweden's largest asset manager),
PKA Ltd (large Danish pension plan) and Dexia (Belgian-Franch).
Finally, we believe that the only attempt by the Company to establish that
the Proponents' proposal fails to raise a policy issue actually proves the reverse,
namely that it does raise an important policy issue. In the carryover sentence on
pages 5-6 the Company cites a vote in the United Nations Security Council in
support of its position. In that vote fourteen members of the Security Council voted
for the condemnation of Israel and one, the United States, voted against it. The
United States vote constituted a veto of a resolution otherwise unanimously agreed
to by all of the other members of the Security Council. Whether the United States
was right or wrong to veto the condemnation is not the issue. The issue is whether
the shareholder proposal raises an important policy issue, not whether the views of
the Proponents, or of the United States, are correct. Such an all but unanimous
vote by the responsible nations of the world provides irrefutable proof that the
Proponents' shareholder proposal implicates an important policy issue.
For the foregoing reasons, CREF has failed to establish the applicability of
Rule 14a-8(i)(7) to the Proponents' shareholder proposal.
RULE 14a-8(i)(3)
The primary reason that the Staff issued Staff Legal Bulletin 14B (September
15, 2004) was to end the practice of registrants raising insubstantial objections to
8

the wording of shareholder proposals, and, in particular, raising objections that
proponent's statements really constituted opinions (although not labeled as such)
or were statements of fact that were disputable. Thus, the Bulletin stated (section
B.l.4.):
Accordingly, we are clarifying our views with regard to the application of
rule 14a-8(i)(3).... going forward, we believe that it would not be appropriate
for companies to exclude supporting statement language and/or an entire
proposal in reliance on rule 14a-8(i)(3) in the following circumstances

•
• the company objects to factual assertions that, while not materially false or
misleading, may be disputed or countered;

•
• the company objects to statements because they represent the opinion of the
shareholder proponent or a referenced source, but the statements are not
identified specifically as such.
It is clear that the company's objections are precisely of the type that the Staff
Legal Bulletin was intended to obviate. Thus the Company (final paragraph, page
8) complains that some statements are "highly controversial and subject to widely
differing views as to their accuracy and implications" and are contrary to policy
positions taken by the United States government. Even if true, the Staff Legal
Bulletin clearly establishes that such alleged deficiencies are not sufficient grounds
for the invocation of Rule 14a-8(i)(3). Similarly, CREF claims that the Proponents
have misconstrued the CREF Social Responsible Investing Report (the "Report").
Once again, the Staff Legal Bulletin would appear to preclude any 14a-8(i)(3)
objection. In any event, the characterization by the Proponents of the Company's
Report would appear to be accurate, since that Report states (page 8) that "We
believe that companies should respect human rights by ... avoiding complicity in
human rights abuses committed by others".

Furthermore, the position taken by the Proponents is "not contrary to positions
taken by the United States government" as alleged in the final paragraph on page 8
of the Company's letter and footnote 32 to the aforesaid quote. As stated in the
very Reuters article cited by CREF, Ambassador Rice stated to the Security
Council that the "US view is that the Israeli settlements lack legitimacy". That
same article relied upon by the Company also stated that the position of Brittan,
France and Germany is that the settlements "are illegal under international law".
9

In summary, the Company has failed to establish that any statement by the
Proponents violates Rule 14a-8(i)(3).
Two fmal points. First, even if the Company's arguments were to be accepted,
the only result would be that some phrases or sentences would have to be excised,
but the entire proposal would not be excludable. Second, if the Staff were to
disagree with our position, the Proponents' would be willing to amend the proposal
to eliminate any portion deemed to be false or misleading.

In conclusion, we request the Staff to inform the Company that the SEC
proxy rules require denial of the Company's no action request.
Subject to the supplemental information provided in the next paragraph, we
would appreciate your telephoning the undersigned at 941-349-6164 with respect
to any questions in connection with this matter or if the Staff wishes any further
information. Faxes can be received at the same number. Please also note that the
undersigned may be reached by mail or express delivery at the letterhead address
(or via the email address).
Please note, however, that the undersigned will be out of the country April
27- May 16, but will have sporadic access to email. During that period please send
any communication by email and copy any such communication to Ms. Barbara
Harvey, Esq., whose email is blmharvey@sbcglobal.net; tel and fax 313-567-4228.

Very truly yours,

Paul M. Neuhauser
Attorney at Law
cc: William J. Mostyn, III
Sidney Levy
Barbara Harvey
10

William J. Mostyn, Ill
Senior Vice President and
Corporate Secretary
Tel: (617) 7&8-5969
Fax: (617) 788-5959
wmcx.1Yil@tiaa-cref.org

March 22. 20 ll

VIA HAND DELIVERY
William J. Kotapish, Esq.
Assistant Director
Division oflnvestment Management
U.S. Securities and Exchange Commission
100 f Street, N.E.
Washington, DC 20549

Re:

The College Retirement Equities Fund- 2011 Annual Meeting
Omission of Shareholder Proposal ofAaron Levitt et al.

Dear Mr. Kotapish:
The College Retirement Equities Fund \'CREP) hereby gives notice to the staff ('•Staff')
of the Securities and Exchange Commission ('"Commission'') of CREF's intention to omit
from its proxy statement and form of proxy ('-20 II Proxy Materials") a shareholder
proposal and supporting statement that were submitted to CREF by Aaron Levitt (the
"Prop'tfllelll acoolll!l$ !he Stock Acooui\" Soctal Cb as CR!3f's mVI!littmnl msnag.:r

Page2 of 10

fl.

ANALYSIS
A.

Tile Proposal may be excluded under Rule 14a-8(i)(7) because it deals with
matters relating to CREF's ordinary b~iness operations.

A proposal may be omitted under Rule 14a~8{i)(7) if it, "deals with a matter relating to the
company's ordinary business operations:' This paragraph of the rule is captioned
"'management functions:' The Commission has explained. that the policy underlying the
ordinary business exclusion under Rule l4a-8(iX7) rests on two central considerations.
11te first consideration is that "certain tasks are so fundamental to management~s ability to
run a company on a day-to-day basis that they could not. as a practical matter, be subjecl to
direct shareholder oversight.·· The second consideration relates to "the degree to which the
proposal seeks to 'micro-manage' the company by probing too deeply into matters of a
complex nature upon whi.ch stockholders. as a group. would not be in a position to make an
inti:>rmed judgment.'9
I.

The Proposal impermissibly seeks to subject fundamental
management functions -the selection and ongoing assessment of
portfolio investments - to an inappropriate level of shareholder
oversight and micro-management.

As the Staff has recognized in numerous Rule 14a-8 no action letter responses, "the
ordinary business orrations of an investment company include buying and selling
portfolio securities," Omitting tbc Proposal thus fits squarely within the purpose of the
exclusion for "management functions:·
The proposal seeks to affect how and when CREF purchases and sells portfolio securities.
These matters are fundamental to the day~to-day management ofCREF. The Proposal thus
amounts to the micro-management of essential business functions by shareholders, which is
exactly what the ordinary business or "management functions.. exclusion under Rule l4a-8
is designed to prevent.' The argument for excluding the Proposal is particularly strong in
this case, since the Proposal names three specific issuers- Caterpillar. Veolia and Elbit.
The Staff has previously granted simtlar no-action assurance to CREF in connection with a
proposal relating to investment in a specific portfolio company under the ordinary business
Atnendme»J> to Rut~ on SbarchG!d~tt Pmposill~>. Exclllinge Att Rcl1.$e No. 34-40018, fed. Sec L Rep. (CCHl,
S6,0l8\May2L 1998).
Collt.!gc Reliremlmr Equititffi Fund .. SEC Nu.Atuon Lcu.:r (pub. ;~v.UI May 3. 2004) r·:zoo4 CRRF Lcner").; M:e also,
Morgan Sunlcy Africa Investment Fund. Inc., SEC Nlment clllllpany·s ordtmcy bul.inm tJpcrll.llons intlude ''the purcht!Sc and sale of securities
and tire mamgemcnt or tlre 1flund ·s portfolio !I:Cutltles"); Slate Stn."et Corp_ SI::T N.o-ActiOO Letter (pub avlul. feb. 24.
2009).
The Sla(l' ltn!i corn:Ufrcd on nlliTICffius occasions that Cl\dusion ofa proposal 1llll)l be proper where lhc proposal allempls
to sul)jm t«hnic.al aspectS. of a rompany·s ordinruy business oper&ttons !.() slulreholdcr ovcrstgllt See. e.g .. Merck &
L:o , lnc., SEC NIN\ctJon Letter (~l;o. liVll•l Jan 23, 1997)

Pege 30f Hl

operations exclusion.3 The Staff has also allowed for exclusion when a group of specific
companies is at issue.9
The Proposal requests that CREF engage with specific portfolio companies on a specific
issue and that CREF consider divesting from comp~nies that do not "cooperate" within a
time frame set forth in the Proposal. Thus, not only does it seek to interfere with CREF' s
buying and selling of portfolio securities, the Proposal seeks to micro-manage TIAA·
CREF's ongoing engagement with portfolio companies. which i.s an integral part of
TIAA-CREF communicates directly (using ••quiet
CREF•s investment activities.
diplomacy") with hundreds of companies each year on mat:tets of corporate governance and
social responsibility, and has established policies and proeesses that guide the selection of
both portfoUo companies and engagement objectives. m The Proposal seeks to micromanage this process by defining the subject matter and goals of company discussions;
id~tifying the companies with which to engage, and setting a deadline beyond which
CREF should consider divestment. As a group. shareholders lack sufficient information
about the companies or issues to make these decisions on CREF's behalf, and allowing: this
resolution to proceed could subject these specific business judgments to decision-making
by referendum in the future. Further. this resolution seeks to force TIAA-CREP to publicly
confront certain portfolio companies. which 1!ontradicts TIAA-CREf's stated and welltested policy of quiet diplomacy .11
Importantly, our choice of quier diplomacy policy is related to our core investment
function. Forcing us to change or disrupt our quiet diplomacy policy could, among other
adverse consequences, make it more difficult tor our portfolio managers to have productive
ongoing communications with portfolio companies on financial and other fundamental
investment matters and could jeopardize beneficial relationships with these companies.
Because the Proposal deals with matters that are fundamental to CREF's ordinal)' business
operations, the Proposal may be excluded from CREF;s proxy materials under Rule 14a8(i}(7).

College Retirtnrent Equilll.lS Fund, SEC Nu-Actilll) lclte'r {pub avl!ll &-pt 7, 2000) (flmlllll! thl!l a pt~lll T!!f!\ll,.>stmg
dive>lmel\l from a portfolio c~ny lhatallegdly created cnv•rllnmental ~Ills Wllfi e~.t!news blll:.ed/l!sp/bJipdfsi.l2_03_01_un_sudnn.pd[

"

.'5/M ulso, lnt'l Bushl!$$ M:tehines Corp__ SEC No.ACiiun l..till.'>f (p~.>b avail. Mat 2.. 2il00) (pcrmlttmg the exclusion ora
pr\JfJ0$1llfult ltuf)ll\late$ the polincal ptOCI!li£, rather than ~oclaltssues).

P~5ot11J

States has vetoed proposed resolutions in the United Nations Security Council that would
have supported condemnation of the activities at the heart of the Proposal.~''
Accordingly. we urge the Staff not to conclude that the Proposal raises an issue of social
policy so significant that a shareholder vote is appropriate.
B.

The Proposal may be excluded under Rule 14a-8(iX10) because the
essential objectives of the Proposal have already been substantially
implemented.

Rule l4a-8(iXIO} permits omission ofa shareholder prop<>sal if"the company has already
substantially implemented the proposal." Because TIAA-CREF has implemented a policy
for identifying portfolio companies to engage on a broad range of matters, including human
rights matters, and divesting from companies when judged appropriate, CREF has
substantially implemented the essential objectives of the Proposal.10
The Staff has stated that "a detcnnination that [a] [c]ompany has substantially implemented
the proposal depends upon whether its particular policies, practices and procedures
compare favorably with the guidelines oftl'IC proposal."21 Significantly, when applying the
substantial implementation standard, a proposal need noi be ''fully cfTccted."71 Rather, the
Staff will grant no-action assurance when a company has implemented the essential
objective of a proposal, even in cases where the company's actions do not fully comply
with the specific dictates of the proposal ..:t;
In this case, the essential obj~tives of the Proposal are two-fold. First, the Proposal asks
CREF to engage specific issuers in its portfolio and encourage them to cease practices by
which they allegedly profit from their complicity in human rights abuses.14 Second, the
''

See US •·eto.ts U.N. draft cundemning lsrwt/1 senlemenrs REI.Jl£1\S. february IS. 2011. awilable
httpJMww rel"eB.L'Omillrttdr/2011/02!18/us-palcstlnians· isr

By way of background TlAA-C'ItEF. organizatuJn-wide. has thn:-: strategies regarding sociaUy responsit·le investing..
depending on the investfn;g ponfollo mvolVIld: (I} th~ CREF Soc, a! Choice AcCO\IIlt implemer.ts S1lclal screening tllat
gives special corn.ideratlon to companies' environmental. social and governance (wi3SG") records: (2) all public cqui~
portfolios seek 1{1 promo~~: tong~leml investment value b).· Cllts m cumpames ·'that prolil from their complicity tn

human ngh!S abuses and violations oflaw... ·•

Page sot 10

a1

Proposal asks CREF tCJ consider divestment from those companies that continue to profit
from these asserted human rights abuses after engagement, if the issuers do not cooperate
within a stated time frame.
These concerns relate to policies and practices that TIAA-CREF bas already put in place to
engage with portfolio companies, including on human rights matters. The policies and
practices are included in the TlAA·CREF Policy Statement on Corporate Governance (the
"Policy Statement''), and are addressed in the TfAA-CR.EF 20 l 0 Socially Responsible
Investing Report (the "Investing Report")}s In providing guidance to portfolio companies.
as well as participants, about corporate governance and social responsibility practices that
TIAA-CREF expects of porttolio companies, the Policy Statement provides:
"companies should strive to respect {human] rights by developing policies and
practices to avoid infringing on the rights of workers, communities and other
stakeholders throughout their global operations. . . . Companies should pay
heightened attention to human rights in regions characrerh:ed hy conflict or
weak governance. . . . ''26
In this connection, TIAA-CREF's Corporate Governance group has established pr<>cedures
for monitoring and engaging portfolio companies. In selecting issues for engagement, the
Corporate Governance group utilizes a detined process to systematically identify issues for
engagement based upon, among other factors, their relevance to the market, potential
impact oo performance, governance practices, and public interest.:n The engagement
strategy reflects TIAA-CREF's dedication to good governance and social respU.ld include !he West Bank and Gm. Veotia. i:llle of the companie~ 1dentifwd in the f>rop!lSllt is a!!IO a
nJW•lx:r of the ellpi:tl l!fbliJi.

rights violations. after sustained efforts at dialogue have failed and divestment can
29

be undertaken in a manner consistent with our fiduciary duties.''

This policy is not a mere formality. ln 2009. after an extended campaign to persuade
certain companies to change their business strategies, CREF divested from several
companies with ties to the government of Sudan in order to case suffering and end
genocide in Darfur.)()
In this case, the Policy Statement and TIAA,.CREF's practices thereunder address the

Proposal's e.o;sential objectives of engaging portfol~ companies on human rights matters,
and, considering, as a last resort in cases of the most serious human rights violations,
divesting from eompanies that do not respond favorably. Accordingly, TIAA-CREF has
already developed and implemented a comprehensive policy that "compares favorably with
the guidelines of the [P]roposal" and that implements the essential objective of the
Proposal. Therefore, the Proposal may be omitted from CREF's 2011 Proxy Materials
pursuant to Rule 14a-8(i)(1 0).
C.

The Proposal may be excluded under Rule 14a-8(i)(3).

An issuer may omit a shareholder proposal or supporting statement from its proxy materials
under Rule 14a-8(i)(3) when the proposal or supporting statement is "contrary to any ofthe
Commission's proxy rules. including Rule 14a-9. which prohibits materially false or
misleading statements in proxy soliciting materials.'' The Staff has recognized that a
proposal may be excluded under Rule 14a-8(i)(3) when it makes charges concerning
31
improper. illegal, or immoral conduct or association without a tactual basis.

The Proposal includes factual assertions that are, at best. highly controversial and subject to
widely differing views as to their accuracy and implications and, at worst, on their face
1
untrue and eontrary to positions taken by the United States govemmene As discussed
above, the Proposal makes these statements in connection with asking shareholders to take
sides on a complex, controversial geopolitical dispute. CREF could not include the
Proposal and these asserted facts without a response. However, CREF does not believe it
would be possible to provide, in the 20 l I Proxy Materials, a. fair and balanced presentation
on these facts and issues that would provide a basis for shareholders to reach an informed

;~

Polley Statementat27 (emphasis added).

"'

'fiAA.ClUU' State!llcllt on Former Holdings m· Ce>mjllillms with nos to Sudnn (Jan. 4. 2010). (1\'i;l//ab/¢ tJI
hUp: l/www.tiaa-cref.me/pobl ic/aboutipress:tabol.ll:_usltelem5/pressrcleasc3l J.html

H

See StatTLegal Bullctin 148 (Sept 14, 2004)

"

For example•. til¢ Proposal i!SSllrt.' IIJat mainlammg and expandil\g [$n!d's ··occupauun of the West SaaiC involves
'"violati~W ofluw:· 1tichlding •·unlawfulllllldexpropliauon·· Compare action by the United Slilh!$ Dn frtt.ay February
18, 2011, vet,)i!lg a Unltce Nations Security Council resulutionthat would have dcing, CREF respectful!}' requests
confinnatioll from the Staff that it will not reconun:end enforcement action to the
Commission if CREF excludes the Proposal from its 20 ll Proxy Materials.

1
'

Cons1der. in cnnncction ll.ith the difllcu1tie$ sueh a presentation would~~ on CREF. the S(l.callcd Negmpontc
Doctrine. set forth by John Ncgropullb:. lbnner OS. Ambassadl>r lQ the United Nations. ln 2002, the Ambassador stilted
that the United States will oppose Security COUncil resolutions ronc~rnin& the Isuroli-Pah:stinian tonftict lhat co!ldcmn
lsml without al~o oondemnlnglerrQrist groups, See United States Miss'o(ln to the tinned :>!atit:IIIS, Ncgropoote DQctnno:
on. Security U>urn:il Rc>ollltJOll oo tlie Middle E;ut \Oct. 6, 2003}.

Page e of 10

!fthe Staff disagrees with out conclusion that the Proposal may be excluded &om CREf's
20 t 1 Proxy Materials, we would appreciate an opportunity to discuss the matter with the
Staff prior to issuil.fice of its formal response. As required by Rule 14a-8(j). six copies of
this letter and its attachments are enclosed and a copy is bei~ fol"\varded concurrently to
the Proponent.
Yours truly,

k/41£, }A~~
t:
"William J. Mostyn. HI
Senior Vice President and Corporate Secretary
TIAA Overseers. riAA and CREF
Cc:

Jef!Tey S. Puretz. Esq. Dechert LLP
Ruth S. Epstein, Esq. Dechert LLP

Page10 ot iO

CD'S

February 11, 2011

WilliamJ. Mostyn 111
Senior Vice President and Corpotate Secretary
TlAA Overseers. TIAA and CR.EF

One Beac:on Street
Boston, MA 02108
p 617-788-5969
f 6l7~788-S959

I hereby fiJe Ute following proposal which request& that CR.EF engage with c::orpora.tions
in its portfolio, sucb as Caterpillar, VeQlia, and Elbit, chatoperate on tbe West Bank and
East Jemsalem wjth the goal of ending all practices by whith they profit fn>m the rsraeli
ocx:upation, and if. by the annual meetiJI g of 20 12., tbere is no commitment to coopemte,
CREP consider divesting as soon as marki!t conditions permit.
This proposal is tiled for inclusion in the PfO'-Y state(Tie(tt jn accordance with Rule l4-a8
of the General Rules and Regulations of the Securities and E.xc:bange Act of 1934.
A number of CREF participants are flUng this proposal. Aaron Levitt is the lead filer; his
contact information is wo.qjlevitt® gmail.c:om1 917-658-8157.

1 have over $1.,000 worth of invutments io CRRF, which I ha'\le held continuously for
more than one y~r prior to the proposal filing date. l intend to continue to hold the
required number of shares through the date of the company's annual meeting in 2011 and
win be present in person or by pro:lly at that meeting.
Slncerely,

~~

.Josh Connor

B21ll/2011

0&!38

4158&15419

CDS

PROPOSAL:
WHEREAS, we and many other TlAA-CREF participants place respect for human rights
and the rule of law at tbe top of our list of important social concerns;[l Jand

WHEREAS. !IAA-CREP believes that avoiding tOillplicity in human rights abuses and

violation5 of Jaw committed by otbm is both ethical ~d tlnaocially sound avoidance of
unStabletinsecure inve:.tmoJJts;f2l and
WHEREAS. CREF nevertheless invests in companies. such as CaterpiUar. Veolia. and
Etbit. tbat profit f:rom their complicity in human rishta abusu and violations of law

committed to maintain and expand Israel's OCCU(JaUCift of the West Bank, including East
Jerusalem;[3 Jand
WHEREAS,. CATERPIUAR profits from tbe de$truction of Palestinian homes. fanns,
and orchards by supplyil)g the bulldourt that are used for such demolition wotk; and
WHEREAS. the number of Pllestinian homes demolisbed on, occupied territory was in
2010 triple the number of such demolitions in 2009. despite condemnation by numerous
lluman rights orgauiutiona;£41 and

WHEREAS ELBIT profits from reaular attacks on the civilian Palestinian population, by
providing military equipment, such as unmanned drones, despite condemnation of
,Israel's use of unmanned drones by Amnesty lntemat!onal and Ruman Rights Watch;(5]
ill)d

WHEREAS BLBIT also profits by providing electronic surveHJance systems tttat lite
built into Ute Separation Wall, despite the finding by the lntemational Court of Justice in
2004 that Israel's construction. of more than 809& of the Separation Wall on Palestinian
land. instead of Israeli land. wts an unlawful Jand expropriation under international law;
[61and.
WHEREAS VEOUA profits from the building and growth of Israeli settlements in the
West Bank, by operatina a landfill that serves the settlements and contracting to opetate

an iltepllight rail system connecting settlement~ wbh West Jerusalem, despite tht call
by Ruman Rights Watch for aJJ butinesses prof'rting from settlements to mitigate any
corporate involvemenr in abuses of human rights and international law caused by these
settlements and, when necessary. end these business operations altogether.(7)
THEREFORE BE IT RESOLVED that the participants request CREF to engage with
corporations in its ponfoJlo, such as Caterpillar, Veolia. and Elbit. that operate on tbe
West Sank and East Jetusalm1 with the goal of ending all practices by wbieh they profit

from the lsraeH occupation. If, by the annual meeting of20l2, there is no commitment to
cooperate, CREF should consider divesting BS soon as market c:ondltions permit.

02111/2011

06:38

GlS9Gl541~

cos

PAGE €14/€14

fll T.lAA-CREF'ZOl.O SOCIALLY RESPONSIBLE INVESTING REPORT, page 8.
f21 T1AA·C.9£f20t0 SOCIALLY RESPONSIBLE INVFBTING REPORT. page 3.
[3) See http:l/iewishvoicefot'peace.QrBftiaa..cref
·
[41 'Demolition of Palestinian homes in West Bank's Area C tripled in 2010'. Haaretz,
January 26, 2011, IUtP;:I/www .hgretz.emnlprint·edition/newsfdelnolition"()f-pafestini:m·
J.mmes..jn-Wcst·banJa::area-c·trtpte' use British.built engines. Amnesty
Iotemationat,lan 9, 2009
f6t lotemat\onal CO\irt of Justice. Legal Consequences of the Construction of a Wall in
the Occupied Palestinian Territory. btf,J!;/fwww J~l:­
cij.org!dock.er!inde&.pbp?pr=7l&tode=mwp&p1=3&p2=4&p3=6&case=l31 &k=Sa
f71 Human Rights Wateh, Separate and Unequal, Dec 2010.
b!m://wW"t_.hm;6lfglgytWf~!Usti9t!Q.

April 15, 2013
William J. Kotapish, Esq.
Assistant Director
Division of Investment Management
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Subject: Corrected Response to CREF request to omit the Shareholder Proposal of Steve Tamari
and hundreds of co-filers from the proxy booklet and a vote at 2013 Annual Meeting
Dear Mr. Kotapish:
Proponents Steve Tamari and about 200 co-filers request that the SEC Staff reject the
request by CREF for a no-action decision. Proponents respectfully ask the Staff to consider the
following response to CREF’s request.
A.

The proposal falls under an exception to the ordinary business exclusion.

The proposal may not be excluded from the proxy because it falls under an exception to the
ordinary business exclusion for matters of “widespread public debate and increasing recognition
that the issue raises significant social and corporate policy issues.”1
The eight examples cited in the proposal’s supporting statement illustrate the widespread public
debate and increasing recognition by authoritative United Nations, US government, foreign
government, and non-governmental bodies that the issue of Israel’s occupation of Palestine raises
significant social and corporate policy issues. The examples include (1) a decision by the
International Court of Justice; (2) a resolution adopted by the UN General Assembly; (3) US
official policy; (4) a call by Human Rights Watch; (5) a call by the UN Special Rapporteur on the
Situation of Human Rights in the occupied Palestinian territories; (6) a call on Congress by
leaders of 15 major US churches; (7) calls by the United Methodist Church, the Presbyterian
Church and the United Church of Canada; (8) decisions by South Africa, the UK, and Denmark,
and a request to the European Union by 20 NGOs (details of each are provided below).
In addition to these eight examples, events and media articles described later in this letter further
illustrate the widespread public debate and increasing recognition that the issue of Israel’s

1

IBM, Inc. SEC unable to concur to no-action letter request, February 16, 2000: “W e are unable to concur
in your view that IBM may exclude the proposal under rule 14a-8(i)(7). That provision permits the omission of a
proposal that deals with a matter relating to the ordinary business operations of a registrant. In view of the
widespread public debate concerning the conversion from traditional defined benefit pension plans to cash-balance
plans and the increasing recognition that this issue raises significant social and corporate policy issues, it is our
view that proposals relating to the conversion from traditional defined benefit pension plans to cash-balance plans
cannot be considered matters relating to a registrant's ordinary business operations. Accordingly, we do not believe
that IBM may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(7).” (Emphasis added)

Page 1 of 34

occupation of Palestine and the human rights violations committed in its conduct raise significant
social and corporate policy issues.
B.

The proposal’s supporting statement places investment in companies whose
operations support the Israeli occupation in the context of TIAA-CREF social
responsibility policy and provides examples of widespread public debate.

The supporting statement recognizes that TIAA-CREF has adopted “socially responsible”
policies and that its Social Choice accounts “invest based on environmental, social, and
governance (ESG) criteria, including a commitment to honor human rights.” It further recognizes
that TIAA-CREF has agreed to “incorporate ESG issues into investment analysis and decisionmaking processes.”
The supporting statement then says, “Despite these policies, CREF nevertheless invests in
companies whose operations raise serious human rights concerns,” namely “companies providing
support for the Israeli occupation and segregated settlements.” Ten and a half paragraphs of the
supporting statement focus on this issue, including the eight examples illustrating widespread
official and public debate and recognition of the importance of the Israeli occupation issue. This
part of the supporting statement starts with an example of one company that takes blatant
discrimination against Palestinians in occupied Palestine to humiliating extreme: That company
dumps waste from illegal West Bank settlements on occupied Palestinian land, and through
subsidiaries, operates segregated bus services for Israeli settlers in the occupied West Bank
Palestinian territories and a light rail connecting illegal West Bank settlements to Jerusalem.
C.

The proposal’s resolved clause places “companies whose business supports Israel’s
occupation” in the context of egregious human rights violators and calls for an end
to investments in such companies.
THEREFORE, shareholders request that the Board 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.
Analysis

D.

CREF offers no facts to support its opinion.

In its letter to the SEC, dated March 22, 2013, CREF asserts its opinion as fact that “this issue is
not the type of widely-accepted, significant social policy issue that would transcend the ordinary
business exclusion.” CREF offers no facts to support its opinion that the issue is not “widely
accepted” or is not the right “type of widely-accepted issue.”
E.

CREF misstates the SEC criteria in its 2013 letter but CREF got it right in 2004.

CREF does not offer any citation showing “type of widely-accepted” as a criterion used by the
SEC either in addition to or instead of “widespread public debate and increasing recognition that
the issue raises significant social and corporate policy issues.”
Page 2 of 34

In its March 22, 2013 letter, CREF entirely omits mentioning the SEC criterion as to whether this
is an issue of “widespread public debate.” Nor does CREF address whether there is “increasing
recognition that the issue raises significant social and corporate policy issues.” These omissions
are not because CREF is unaware of these SEC criteria.
In its February 24, 2004 letter to the SEC2 (the “2004 letter”), cited by CREF in its March 22,
2013 letter, CREF properly described the actual SEC criteria. In the 2004 letter CREF said:
B. The Proposal does not raise significant social policy issues.
The Staff has indicated that a shareholder proposal that would normally be
excludable as dealing with a matter relating to a company's ordinary business
operations may not be excludable if it raises significant social policy issues.9 The
Staff has determined that shareholder proposals involve significant social policies
if they involve issues that engender widespread debate,[10] media attention[11]
and legislative and regulatory initiatives.[12] (the footnotes in brackets are in
CREF’s letter.)3
Regarding “widespread debate,” in footnote 10 of its 2004 letter to the SEC, CREF cited
“Division of Corporation Finance: Staff Legal Bulletin No. 14A, Shareholder Proposals.”4
Staff Legal Bulletin No. 14A states:
The Commission has previously taken the position that proposals relating to
ordinary business matters "but focusing on sufficiently significant social policy
issues . . . generally would not be considered to be excludable, because the
proposals would transcend the day-to-day business matters and raise policy issues
so significant that it would be appropriate for a shareholder vote."6 The Division
has noted many times that the presence of widespread public debate regarding
an issue is among the factors to be considered in determining whether proposals
concerning that issue "transcend the day-to-day business matters."7
In the 2004 letter, CREF continued with a fact and an argument:

2

College Retirement Equities Fund, SEC No-Action Letter (pub. avail. May 3, 2004),
http://www.sec.gov/divisions/investment/noaction/crfuller050304.pdf
3

Similarly, Fidelity Aberdeen Street Trust (2008) admitted in its letter to the SEC that (unsuccessfully)
requested a no-action letter: “W e recognize that the Staff of the Commission has indicated that a shareholder
proposal that would normally be excludable under Rule 14a-8(i)(7) may not be excludable if it raises significant
social policy issues.9 Shareholder proposals involve significant social policies if they involve issues mat [typo in
original; should be “that”] engender widespread debate, media attention and legislative and regulatory
initiatives. 10"
4

Division of Corporation Finance: Staff Legal Bulletin No. 14A, Shareholder Proposals,
Action: Publication of CF Staff Legal Bulletin, Date: July 12, 2002
http://www.sec.gov/interps/legal/cfslb14a.htm

Page 3 of 34

Here, the Proposal relates to the divestiture of a single portfolio investment.
Therefore, although CREF appreciates the gravity of the allegations contained in
the supporting statement, it believes that the Proposal itself is related to an
ordinary business topic.
In its March 22, 2013 letter to the SEC, CREF implicitly recognized what its burden is by citing
its own 2004 letter (see footnote 8 of the March 22, 2013 letter). But in this March 22, 2013 letter
to the SEC, CREF omitted explicit mention of the widespread public debate and media attention
criteria CREF had already recognized in its May 3, 2004 letter to the SEC. In addition to not
explicitly mentioning these criteria, TIAA-CREF also provided no fact and no argument
regarding these criteria.5
Having implicitly admitted to the widespread public debate and media attention SEC criteria
through its citation of its 2004 letter, but having omitted making explicit mention of these criteria
in its March 22, 2013 letter, and having omitted fact and argument regarding these criteria in its
March 22, 2013 letter to the SEC, CREF could not have met its burden.
Interestingly CREF took upon itself the power to revise the SEC criteria. CREF asserts in its
March 22, 2013 letter that “this issue is not the type of widely-accepted, significant social
policy issue that would transcend the ordinary business exclusion.” (Emphasis added.) This
CREF version of the criteria is quite different from the actual SEC criteria: “the presence of
widespread public debate and increasing recognition” regarding an issue. The fact that CREF
took it upon itself to revise the SEC criteria and then argue against its own self-serving strawman version serves as an admission by CREF that it has no fact or argument sufficient to meet
the actual SEC criteria.
The proposal’s supporting statement recites facts demonstrating widespread public debate and
increasing recognition that the issue raises significant social and corporate policy issues. These
facts, plus the many additional facts presented in this letter, show the presence of widespread
public debate and increasing recognition that the issue raises significant social and corporate
policy issues. Proponents respectfully ask the SEC staff to consider that the facts provide strong
evidence that the proposal concerns an issue that "transcends the day-to-day business matters," is
not a matter of ordinary business, and is appropriate for a shareholder vote.
F.

Proposal’s supporting statement illustrates widespread public debate and increasing
recognition that the issue raises significant social and corporate policy issues.

This from the proposal’s supporting statement (with footnotes and citations added):
Investments in companies providing support for the Israeli occupation and segregated
settlements in the West Bank, including East Jerusalem, represent a significant policy issue:

5

Because the present resolution relates to a policy matter, not a single portfolio investment, the fact and
argument CREF used regarding the 2004 proposal are inapplicable with regard to the present resolution.

Page 4 of 34

C

The International Court of Justice concluded in 2004 that “the Israeli settlements in the
Occupied Palestinian Territory (including East Jerusalem) have been established in
breach of international law”;6

C

Israel continues to maintain and even accelerate settlement of the West Bank and East
Jerusalem,7 even after the UN General Assembly in December 2012 recognized Palestine
as a non-member state, with only eight countries voting “nay”;8

C

The U.S. officially opposes continued Israeli settlement activity;9

6

International Court of Justice. Advisory opinion: Legal Consequences of the Construction of a W all in the
Occupied Palestinian Territory, July 9, 2004
http://www.icj-cij.org/docket/index.php?pr=71&code=mwp&p1=3&p2=4&p3=6
7

“Israel 'to build 3,000 new settler homes in wake of Palestinian UN bid',” The Telegraph, November 30,
2012 http://www.telegraph.co.uk/news/worldnews/middleeast/israel/9714550/Israel-to-build-3000-new-settlerhomes-in-wake-of-Palestinian-UN-bid.html "Despite the commitments he gave to (US) President (Barack) Obama,
PM Netanyahu gave the order to advance construction in the E1 area between Maaleh Adumim and Jerusalem which
will cut off the northern part of the W est Bank from the south," . . . “The Palestinians bitterly oppose the project as it
effectively cuts the occupied W est Bank in two, making the creation of a viable Palestinian state highly
problematic.”
8

Resolution adopted by the General Assembly 67/19. Status of Palestine in the United Nations, December
4, 2012 http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/67/19 and “UN general assembly makes
resounding vote in favour of Palestinian statehood,” Ewen MacAskill and Chris McGreal, The Guardian, November
29, 2012 http://www.guardian.co.uk/world/2012/nov/29/united-nations-vote-palestine-state
9

U.S. Policy on Israeli Settlements (Taken Question), Office of the Spokesperson
W ashington, DC, Question Taken at the June 16, 2011 Daily Press Briefing, June 16, 2011
Q: W hat is the current U. S. policy on Israeli settlements?
A: The position of the United States on Israeli settlements has not changed and will not change. Like every American
administration for decades, we do not accept the legitimacy of continued settlement activity. President Obama's
recent speech offered our views on the way forward.
http://www.state.gov/r/pa/prs/ps/2011/06/166371.htm
“Our position on this issue remains unchanged. The United States has a clear policy – we do not accept the
legitimacy of continued Israeli settlement activity. W e oppose any effort to legalize settlement outposts, which is
unhelpful to our peace efforts and would contradict Israeli commitments and obligations.” US Department of State.
Israel/Palestinians: U.S. Position on Settlements, October 12, 2011
http://www.state.gov/r/pa/prs/ps/2011/10/175339.htm).
President Obama speaking at the joint press conference with Palestine President Abbas on March 21, 2013: “Now,
one of the challenges I know has been continued settlement activity in the W est Bank area. And I’ve been clear with
Prime Minister Netanyahu and other Israeli leadership that it has been the United States’ policy, not just for my
administration but for all proceeding administrations, that we do not consider continued settlement activity to be
constructive, to be appropriate, to be something that can advance the cause of peace. So I don’t think there’s any
confusion in terms of what our position is.” http://www.whitehouse.gov/the-press-office/2013/03/21/remarkspresident-obama-and-president-abbas-palestinian-authority-joint-

Page 5 of 34

C

Human Rights Watch calls on companies that "contribute to and/or benefit from
violations of Palestinian residents’ human rights" to either end their involvement in such
violations or end operations altogether, "where business activity directly contributes to
serious violations of international law, including prohibitions against discrimination”;10

C

The U.N. Special Rapporteur on the situation of human rights in the occupied Palestinian
territories has recommended boycotting such companies, including Veolia Environment,
and has warned that these companies may expect damage to their public image, impact on
shareholder decisions and share price, and potential criminal or civil liability for breaches
of international human rights and humanitarian law;11

C

Leaders of 15 major churches in the U.S. in October 2012 called on Congress to suspend
U.S. military aid to Israel if investigation discloses that Israel is using such aid in
violation of U.S. law;12

C

The United Methodist Church,13 the Presbyterian Church (USA),14 and the United Church
of Canada15 have called for boycott of Israeli settlement goods;

C

South Africa, the U.K., and Denmark advise that settlement goods not be labeled as
'Made in Israel,’ and over 20 NGOs are asking the European Union to take similar steps;16

10

HRW : Israel/W est Bank: Separate and Unequal, 2010 http://www.hrw.org/node/95059/section/3

11

Situation of human rights in the Palestinian territories occupied since 1967, UN A/67/379, September 19,
2012, pages 10 , 11, and 14-15.
http://unispal.un.org/unispal.nsf/5ba47a5c6cef541b802563e000493b8c/4b2de5243ebce35685257aa200487927?Ope
nDocument
12

Religious leaders ask Congress to condition Israel military aid on human rights compliance. PC(USA),
October 5, 2012 http://www.pcusa.org/news/2012/10/5/religious-leaders-ask-congress-condition-israel-mi/
13

The Position of the United Methodist Church regarding the Israeli occupation of Palestinian territory, the
Israeli settlements, and boycott of settlements products.
https://www.kairosresponse.org/Oppos_To_Settlements_Resol.html
14

“Boycott added to Presbyterian tools for Middle East peace,” PC(USA), July 7, 2012:
http://www.pcusa.org/news/2012/7/7/boycott-added-presbyterian-tools-middle-east-peace/
15

“The W orking Group on Israel/Palestine Policy” – (Unofficial text of minutes approved by General
Council 41 August 17th. 2012): http://www.gc41.ca/sites/default/files/final_unofficial_israel_palestine.pdf. See also:
http://www.gc41.ca/israel-and-palestine-policy-report
16

“Trading away Peace: How Europe helps sustain illegal Israeli settlements,” October 30, 2012:
http://www.fidh.org/IMG/pdf/trading.pdf

Page 6 of 34

G.

Recent developments further show widespread public debate and increasing
recognition that the issue raises significant social and corporate policy issues.
C

On April 22, 2012, the CBS television show, 60 Minutes, aired “Christians in the Holy
Land,” with Bob Simon exploring why leading Palestinian Christians had endorsed the
call by Palestinian civil society for global engagement in “divestment and in an economic
and commercial boycott of everything produced by the occupation.”17
The other side of the debate became a story in its own right. As reported on April 24,
2012, “'60 Minutes' Israel Story: Benjamin Netanyahu Reportedly Briefed On Envoy's
Attempt To Kill CBS Story,” the Israeli ambassador tried hard to stop the 60 Minutes
segment from being broadcast.18
Two days later MJ Rosenberg reporting on the Huffington Post wrote, “The 60 Minutes
report caused the Israeli government to go ballistic even before it aired.”19

C

In December 2012 the UN voted to admit Palestine as a non-member state.

C

In his March 2013 visit to Israel and Palestine, President Obama spoke against the
occupation and said "Palestinians have a right to be a free people in their own land."

C

In October 2012 came the call on Congress by leaders of 15 major churches in the U.S. to
suspend U.S. military aid to Israel if investigation discloses that Israel is using such aid in
violation of U.S law.

C

In October 2012 came the call by the U.N. Special Rapporteur on the situation of human
rights in the occupied Palestinian territories to boycott companies doing business in
Israeli settlements in the West Bank and East Jerusalem, including Veolia Environment,
and his warning that these companies may expect damage to their public image, impact
on shareholder decisions and share price, and potential criminal or civil liability for
breaches of international human rights and humanitarian law.

C

Billboards and bus ads protesting US aid to Israel have sprung up in different American
cities, eliciting controversy and showcasing local support (Chicago, New York City, San
Francisco, Portland, Westchester County).20

17

The 60 Minutes segment is at: http://www.cbsnews.com/8301-18560_162-57417408/holy-land/

18

'60 Minutes' Israel Story: Benjamin Netanyahu Reportedly Briefed On Envoy's Attempt To Kill CBS
Story,” by Rebecca Shapiro, Huffington Post, April 24, 2012
http://www.huffingtonpost.com/2012/04/24/60-minutes-israel-christians-netanyahu-kill-story_n_1449595.html
19

“Suppression: The Israeli Government & 60 Minutes,” by MJ Rosenberg, The Huffington Post, April 26,
2012 http://www.huffingtonpost.com/mj-rosenberg/suppression-the-israeli-g_b_1457189.html
20

“Pros, cons of U.S. aid to Israel argued in New York subway posters,” CNN, Spetember 16 2011
http://www.cnn.com/2011/US/09/16/new.york.dueling.posters/index.html
Page 7 of 34

C

The nomination of Senator Chuck Hagel to Secretary of Defense in 2012 was widely seen
and reported in the media as a proxy battle between President Obama and the Israel
lobby. An opinion piece in the New York Times, “Don’t Let Pro-Israel Extremists Sink
Chuck Hagel,”21 shows how the public debate about the Israeli settlement issue is so
widespread that it moved into the center of the US Senate confirmation process: “Ten
years ago, mainstream pro-Israel groups carefully avoided the issue of West Bank
settlements; today, politicians who argue that settlement expansion is an obstacle to peace
— a longstanding American position — risk being tarred with the anti-Israel brush. Even
though support for settlements reflects the perspective of a small minority of American
Jews, it increasingly appears to be the policy stance of major pro-Israel groups.”
A number of highly important figures came out for or against Senator Hagel.22
The Senate confirmation hearing became the subject of strong satirical criticism by the
popular NBC TV show, “Saturday Night Live.”23
Andrew Sullivan, former editor of The New Republic, described this “Saturday Night
Live”segment as a “cultural breakthrough,” stating that “the absurdly overblown power of
the Greater Israel lobby is now seeping into the popular culture.”

C

In February 2013 a widely reported public debate ensued when Palestinian human rights
activist and divestment advocate Omar Barghouti and Philosophy Professor Judith Butler

“Metro-North Faces Israel-Palestine Ad Conflict,” Daily News, May 26, 2012, by James Arkin, “The Israel-Palestine
conflict remains in full swing -- on Metro-North train platforms.”
http://www.nydailynews.com/blogs/dailypolitics/2012/07/metro-north-faces-israel-palestine-ad-conflict
“New TriMet ads highlight Palestine-Israel conflict,” Fox 12 Oregon, September 27, 2012
http://www.kptv.com/story/19658539/trimet-ads-to-highlight-palestine-israel-conflict
“Anti-Israel ads at W estchester train stations stir controversy,” News 12, March 27, 2013
http://westchester.news12.com/news/anti-israel-ads-at-westchester-train-stations-stir-controversy1.4919676?firstfree=yes
21

“Don’t Let Pro-Israel Extremists Sink Chuck Hagel, The New York Times, December 26, 2012, by James
Besser http://www.nytimes.com/2012/12/27/opinion/dont-let-pro-israel-extremists-sink-chuck-hagel.html?_r=0
22

“The Israel Lobby and Hagel,” by Joe Klein, Time Magazine, January 8, 2013
http://swampland.time.com/2013/01/08/the-israel-lobby-and-hagel/
“Chuck Hagel nomination shows AIPAC's limits,” by Phillip Klein, The Examiner, January 9, 2013
http://washingtonexaminer.com/philip-klein-chuck-hagel-nomination-shows-aipacs-limits/article/2518048
“The Real Reason Republicans Hate Hagel,” by Fred Kaplan, Slate, January 6, 2013
http://www.slate.com/articles/news_and_politics/war_stories/2013/01/chuck_hagel_for_secretary_of_defense_republ
icans_wants_to_block_him_from.html
“How Obama Beat The Lobby,” by MJ Rosenberg, March 6, 2013
http://mjayrosenberg.com/2013/03/06/how-obama-beat-the-lobby/
23

The Saturday Night Live segment did not air live, but was posted by NBC online:
“‘Saturday Night Live’ on Chuck Hagel’s confirmation hearing (VIDEO)”
http://www.washingtonpost.com/blogs/the-fix/wp/2013/02/11/saturday-night-live-on-chuck-hagels-confirmation-hear
ing-video/

Page 8 of 34

were slated to speak about the boycott, divestment, and sanctions (BDS) movement at
Brooklyn College, sponsored by the Political Science Department. The Mayor of New
York, Michael Bloomberg, spoke out in support of the event proceeding as planned and
against interference by the City Council: “If you want to go to a university where the
government decides what kind of subjects are fit for discussion, I suggest you apply to a
school in North Korea.”24 The New York Times dedicated an editorial in defense of the
talks.25 As the Times reported,26 the lectures took place on February 7, 2013 with protests
pro- and con- outside.
C

Two films criticizing the Israeli occupation were among the finalists in the Oscars in
February 2013.27

•

In June 2012, MSCI removed Caterpillar from its ESG indexes, in part because of the
long running controversy regarding the use of CAT bulldozers by the Israeli Defense
Forces in the Occupied Palestinian Territories. Following MSCI’s move, TIAA-CREF
divested over 72 million dollars worth of CAT stock from its Social Choice accounts.28

24

“Mayor Backs College’s Plan to W elcome Critics of Israel,” by Kate Taylor, The New York Times,
February 6, 2013
http://www.nytimes.com/2013/02/07/nyregion/bloomberg-defends-brooklyn-colleges-right-to-bds-talk.html?_r=0
“New York Dems Shouldn't Make Political Hay of Brooklyn College's Panel on BDS,” The Nation, February 5,
2013: http://www.thenation.com/blog/172665/new-york-dems-shouldnt-make-political-hay-brooklyn-colleges-panelbds#
“4 House Members Slam College's Anti-Israel Event,” Mother Jones, February 2, 2013
http://www.motherjones.com/mojo/2013/02/brooklyn-college-bds-omar-barghouti-judith-butler-israel-palestinian
“Appearance by Group Advocating Boycott of Israel Roils Brooklyn College,” The New York Times, January 31,
2013 http://www.nytimes.com/2013/02/01/nyregion/appearance-by-bds-at-brooklyn-college-spurs-protest.html
25

“Litmus Tests,” The New York Times, February 4, 2013
http://www.nytimes.com/2013/02/05/opinion/litmus-tests-for-israel.html?_r=0
26

“Pro-Palestine Speakers at Brooklyn College Attract Protests Outside,” by
Vivian Yee, The New York Times, February 7, 2013 http://www.nytimes.com/2013/02/08/nyregion/at-brooklyncollege-pro-palestine-speakers-attract-protests-outside.html
27

“Israeli Oscar contenders force citizens to confront uncomfortable questions: Two Israeli documentary
films nominated for Oscars, 'The Gatekeepers' and '5 Broken Cameras,' raise difficult questions about the Israeli
occupation of the Palestinian territories,” by Chelsea Chesley, The Christian Science Monitor, February 23, 2013
http://www.csmonitor.com/W orld/Middle-East/2013/0223/Israeli-Oscar-contenders-force-citizens-to-confront-unco
mfortable-questions
28

“Israel cited in Caterpillar’s delisting from influential investment index,” JTA, June 22, 2012
http://www.jta.org/news/article/2012/06/22/3098921/israel-cited-as-one-of-several-factors-in-caterpillars-delisting
“Decision to oust Caterpillar from influential ethical investing index linked to Israeli use of tractors,” Haaretz, June,
23, 2012: http://www.haaretz.com/business/decision-to-oust-caterpillar-from-influential-ethical-investing-indexlinked-to-israeli-use-of-tractors-1.440509
“Caterpillar pulled from social indexes,” Fox News, June 27, 2012
http://www.foxnews.com/world/2012/06/27/caterpillar-pulled-from-social-indexes/
“Caterpillar cut from investment lists; Israeli role cited”, LA Times, June 27, 2012
http://latimesblogs.latimes.com/world_now/2012/06/caterpillar-israel-palestine-investment-controversy.html
Page 9 of 34

•

Following questions by Quakers concerned about investments linked to the Israeli
occupation, in October 2012 Friends Fiduciary, an investment firm serving over 300
Quaker institutions in the United States, divested from Caterpillar, Hewlett-Packard, and
Veolia.29

•

The United Methodist Church considered at its quadrennial General Conference in May
2012 divesting from corporations whose business and products support the Israeli
occupation of Palestinian land.30 Although that resolution did not pass, the church voted
to boycott Israeli settlement goods.31

•

The Presbyterian Church (USA)’s Mission Responsibility Through Investment
recommended in 2011 divestment from Caterpillar, Hewlett-Packard, and Motorola
Solutions, after what it termed “seven years of apparently futile corporate
engagement” over “business practices in Israel/Palestine.”32 At the church’s biennial
General Assembly in July 2012, the issue of divestment came to the fore from the
committee as well as from a number of Presbyteries across the country. The General
Assembly’s deliberations were thoroughly covered in the press, locally and
nationally. The Presbyterian Church (USA) had been discussing this issue at every
bi-annual General Assembly since 2004 (in 2004, 2006, 2008, 2010, and 2012). In
2012, the divestment overture won in committee by a 3 to 1 ratio,33 and was
subsequently defeated at the conference floor by the slimmest of margins (333
against, 331 for, and 2 abstentions), amply demonstrating that this issue divided the
church delegates almost evenly.34 In the end, an overture to boycott settlement
goods passed with 71% of the vote, the wide margin showcasing the growing

29

“US Quakers sell shares over Israel policy concerns,” Associated Press, October 3, 2012
http://www.boston.com/business/news/2012/10/03/quakers-sell-shares-over-israel-policyconcerns/GJReufxJYh0a5QE2YiIZVO/story.html
30

“Methodists Vote Against Ending Investments Tied to Israel”, The New York Times, May 2, 2012:
http://www.nytimes.com/2012/05/03/us/methodists-vote-against-ending-investments-tied-to-israel.html
Summary of resolution text: http://calms2012.umc.org/Text.aspx?mode=Petition&Number=1072
31

“The Position of the United Methodist Church regarding the Israeli occupation of Palestinian territory,
the Israeli settlements, and boycott of settlements products,”
https://www.kairosresponse.org/Oppos_To_Settlements_Resol.html
32

“MRTI recommends PC(USA) divestment of three companies,” September 12, 2011:
http://www.pcusa.org/news/2011/9/12/mrti-recommends-pcusa-divestment-caterpillar/
33

“Assembly committee recommends divestment,” July 4, 2012:
http://www.pcusa.org/news/2012/7/4/assembly-committee-recommends-divestment/
34

“In Close Vote, Presbyterian Church Rejects Divesting in Firms That Aid Israeli Occupation,” The New
York Times, July 5, 2012: http://www.nytimes.com/2012/07/06/us/presbyterian-church-wont-divest-in-firms-aidingoccupation.html

Page 10 of 34

concern about corporate responsibility regarding the illegal Israeli settlement
enterprise in the West Bank and East Jerusalem.35
•

In March 2013, the Mennonite Central Committee voted to divest from companies
that benefit from products or services used to perpetrate acts of violence against
Palestinians, Israelis and other groups.36

•

The Brown Advisory Committee on Corporate Responsibility in Investment Policies
(ACCRIP)—a committee comprised of Brown University faculty, staff, alumni, and
students that considers issues of ethical and moral responsibility in the investment
policies of Brown University—issued its recommendations to the University at the end of
2012, including the committee’s concerns that “Brown may be invested in firms whose
products and services are being used to commit human rights violations in Palestine,” and
recommended that “the University should consider the implications of its investment in
companies perpetrating human rights abuses, and whether or not divestment is an option
in dealing with the issue.” 37

•

In June 2012, “the undergraduate student government at Arizona State University
unanimously passed a bill demanding that ASU divest from and blacklist companies that
continue to provide the Isra

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A7c675aa3da69337d. Public record. Not legal advice.