Jomsky, Mark
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cityclerk
Wednesday, December 17, 2025 4:27 PM
Iraheta, Alba; Jomsky, Mark; Robles, Sandra; Sabha, Tamer; McMillan, Acquanette (Netta); Soo, Christine
FW: Item 3, response to the staff report
From: Elbert Newton
Sent: Wednesday, December 17, 2025 4:26:48 PM (UTC-08:00) Pacific Time (US & Canada) To: cityclerk <[email protected]>
Cc: Rivas, Jessica <[email protected]>
Subject: Item 3, response to the staff report
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Dear Legislative Policy Committee of the City Council,
I'm writing in support of the resolution for divestment from companies profiting from the genocide in Palestine.
The staff report, on page 4 of 7 in the Investment Policy - ESG Considerations, says that the staff is unaware of any pension funds that are divesting from Israel as they did from South Africa or any "universally accepted list" which would guide such divestment.
We have suggested that the city use the list from the American Friends Service Committee (AFSC) which can guide this divestment.
In regard to pension funds that have divested, here is a list:
U.S. entities:
North Carolina: The Break the Bonds NC coalition recently announced that the state of North Carolina has sold all $6.7 million of Israeli government bonds held in the state pension fund. This win came out of a powerful campaign supported by over 40 organizations, including unions and faith groups.
Michigan After a year-long campaign, Michigan Divest announced in late November that the state Department of Treasury has dropped all state pension investments in Israel Bonds, totaling $10 million.
City of Northampton, Massachusetts September 19, 2025 Northampton City Council voted unanimously on a resolution "to divest from, and refrain from future investments in, companies with a substantial, ongoing, and intentional complicity in violations of international law and human rights in Israel and Palestine" as well as Israel Bonds.
City of St. Louis, Missouri November ~7, 2025 The city's Board of Aldermen overwhelmingly voted (10-1) for a resolution calling "on the Board of Trustees of the Employees Retirement System of the City of St. Louis, to ensure that all of the city resources entrusted to their stewardship, including stock holdings, bond investments, and pension funds are not invested in companies that are complicit in perpetuating violence against people within our city or abroad according to the guidelines established by the American Friends Service Committee." City of Dearborn, Michigan October 10, 2024 Dearborn City Council voted unanimously to prevent two funds under its control - the post-employment health care fund and the police and fire retirement system - from investing in "Publicly traded companies that consistently knowingly and directly enable or facilitate human rights violations or violations of international law as part of prolonged military occupations, apartheid and genocide. This specifically includes, but is not limited to companies that have provided Israel with weapons and other military equipment or military technology that has facilitated attacks on Gaza, the West Bank, Lebanon, Yemen, Syria, and any other country."
Massachusetts Teachers Association December 12, 2024 The MTA, which is the largest union in Massachusetts, debated BDS and passed a Divestment for Peace and Justice motion to "disclose and divest all MTA staff pension funds from businesses that provide arms or other forms of military assistance.
Outside the U.S.:
Norway: At the end of August 2025, the Norwegian Sovereign Fund, the largest in the world, announced it divested from 5 Israeli banks and from Caterpillar, where the fund's major individual share was almost $2 billion (US).
Denmark: In September 2025, the Danish pension fund,
AkademikerPension, announced the complete exclusion of Israel from its investments citing Israel's grave human rights violations, especially in Gaza.
The Netherlands: In October, the largest Dutch pension fund, ABP, announced it sold all shares in US machine manufacturer Caterpillar in which it had a stake worth €387 million. Since 2024, ABP has adopted a new sustainability policy meaning that investments must be "socially responsible." Universities Superannuation Scheme (USS) August 7, 2024 Following "sustained pressure from the pension fund's members, concerned over Israel's human rights record," the U.K.'s largest private-sector pension fund has reportedly sold some £80 million in Israeli assets "including government debt and Israeli currency in the past six months."
Respectfully,
Bert Newton
My podcast: Bible Study; Parody and Subversion in Matthew's Gospel Jomsky, Mark
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Gregg Mashberg
Wednesday, December 17, 2025 10:46 PM
Madison, Steve; Masuda, Gene; Rivas, Jessica; Jomsky, Mark Fwd: Proposed Divestment Resolution
LGA Letter (6).pdf; SA Ltr-l.pdf
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Dear Members of the Legislative Policy Committee,
Attached is my letter (LGA.ltr (6).pdf) regarding your December 1 8 special meeting, at which the issue of divestment of City and Retirement Board funds from companies doing business with the State of Israel is on the agenda.
Also attached, for convenience, is a copy of my November 21, 2025 (SA Ltr-1 .pdf), which addresses the issue of divestment from South Africa, which I refer to in today's letter.
Thankyou foryourtime and consideration.
Respectfully,
GreggMashberg
Gregg Mashberg1
Via E-Mail
December 17, 2025
Members of the Legislative & Governance Committee
City Council
City of Pasadena
100 N. Garfield Avenue
Pasadena, CA 91101
Re: Request to Decline or Table Any Recommendation to Advance an Israel- Focused Divestment Resolution
Dear Members of the Legislative & Governance Committee:
I write in advance of the Committee's December 18, 2025 Special Meeting in which it will consider providing (1) direction to the City Council regarding the Ethical, Social and Governance (ESG) component of its Investment Policy; or (2) direction to the Fire and Police Retirement System Board (PFPRSB) to consider modification of its investment policy. In both cases, the focus appears to be whether to divest from companies doing business with the State of Israel.
For the reasons set forth below, I respectfully suggest the Committee decline to recommend that the City Council consider any Israel-focused divestment measure, or—at minimum—to table the matter pending a thorough review of the full range of state and federal constraints at issue.
I am a resident of La Canada Flintridge. I write solely in my personal capacity as a concerned private citizen.
I recognize that the Committee's Agenda Report for the December 18 meeting summarizes certain governing investment standards and cites a California Debt and Investment Advisory Commission (CDIAC) white paper describing SRI/ESG ' Personal contact information available immediately upon request and contained in speakers' cards submitted at Council and Retirement System Board meetings. 1 approaches. And it correctly notes the City's investment-policy franiework is constrained by state law and fiduciary responsibilities.
The Report, however, does not address several material issues relating to an Israel- targeted divestment policy—particularly those arising under (i) California Constitution Article XVI, section 17 as applied to the PFPRSB, (ii) the City Charter's allocation of authority, (iii) the Local Agency Investment Law's mandatory objectives for City pooled funds, (iv) California's anti-discrimination contracting certification requirements as they relate to BDS-style policies, (v) federal foreign-affairs preemption and (vi) proper standards for government decision making.
Accordingly, in my view the Committee should avoid advancing a measure that could expose the City and/or PFPRSB to avoidable risk and governance disruption.
Please note this letter is summary in nature and not intended to be a full explication of the matters address or their potential consequences. 1) The Council is not authorized to "direct" PFPRSB investment decisions Pasadena City Charter section 1502 vests the PFPRSB with "exclusive control" over retirement-system investments, subject to the same constitutional and legal restrictions applicable to public retirement funds. A Council resolution, even if characterized as symbolic, "direct[ing]" divestment from Israel-facing companies can be viewed as an attempt- direct or indirect—to influence fiduciaries who must act independently and solely on financial grounds.
2) PFPRSB fiduciaries are constitutionally constrained to financial risk and return—political divestment is not authorized.
Article XVI, section 17 of the California Constitution mandates that retirement fiduciaries:
act solely in the interest of participants and beneficiaries; discharge duties with care, skill, prudence, and diligence; and treat duties to beneficiaries as overriding competing duties. 2 In my view, there is no room in this constitutional scheme for country-specific divestment—particularly one driven by political or ideological objectives, as is plainly the case here. Under Section 17(g), moreover, only the Legislature may impose investment prohibitions and, at that, must still prioritize fiduciary duty. To my knowledge, there is no such legislative mandate applicable to divesting from companies doing business with Israel; to the contrary, Assembly Bill 2844 and California Public Contracting Code 2010 (as noted in the Agenda Report (at 028)), reflect California's strong policy opposing BDS-style boycotts and divestment measures targeting Israel.
Notably, at its November 19, 2025, meeting, the Board's investment advisors, Versus Advisors, cautioned against divestment, as it "limits the opportunity set," "can increase risk or lower market returns or both," and "are not considered to align with the fiduciary standard." (See Nov. 19 meeting packet, at 285-86.) For these reasons, it would be inappropriate, in my view, for the Committee to "direct[] the Fire and Police Retirement System to consider modification to its investment policy" (Agenda Report, at 024) with respect to divesting from companies doing business with Israel.
3) The City's own pooled-funds investment authority is not a vehicle for foreign-policy sanctions
The Local Agency Investment Law (GOV. Code, §§ 53600, et seq.) imposes a defined hierarchy of objectives—safety, liquidity, then yield. While agencies can adopt investment policies annually, the statute does not authorize the City to use its investaent program as a mechanism for geopolitical sanctions or symbolic condemnation, particularly where the record shows the decision is driven primarily by non-financial considerations. Nor should a ESG policy, under any circumstances, override state and federal law that constrains localities and state agencies from adopting BDS/divestment policies. See AB 2844 and California Public Contract Code section 2010.
Without debating the outer bounds ofAB 2844 and CPCC §2010, the key governance point is this: a City-adopted "ethical investment" policy that is unquestionably inspired by a BDS-style divestment program against Israel creates avoidable risk under state contracting and anti-discrimination certification frameworks.
3 4) Federal foreign-affairs preemption presents a separate constitutional barrier
I would suggest that state and local measures that function as foreign-policy sanctions or intrude into the federal government's exclusive control over foreign-affairs under the Constitution, are constitutionally vulnerable to "preemption" under the Supremacy Clause—even when framed as "ethical" or "human rights" measures.
An Israel-targeted divestment resolution, designed to apply economic pressure on a foreign sovereign and to align the City with a contested geopolitical program—particularly one that sharply conflicts with U.S. foreign policy—raises serious preemption issues.
5) The Apartheid South Africa Precedent is No Precedent at All . The Agenda Report devotes substantial attention to Pasadena's 1988 divestment from South Africa, largely distinguishing that experience from the current anti-Israel divestment effort. I previously addressed this issue in my November 21, 2025 letter to the Mayor and members of the Council and Retirement Board (copy included with cover e-mail), and won't repeat that presentation here, other than to highlight the following:
Pasadena's South Africa apartheid-era actions occurred in a materially different legal and policy environment, and they aligned with widely recognized federal and state divestment policies at the time. By contrast, targeting Israel—a close U.S. ally—in a divestment campaign could raise fiduciary, statutory, and federal preemption concerns, having no grounding in the purported apartheid analogy. The Agenda Report itself notes staff are not aware of pension systems pursuing Israel divestment as they did for South Africa, and it recognizes the lack of a universally accepted screening list. Nor, as described in my November 21 letter, does the South African apartheid experience have any factual analog with respect to the State of Israel, whose society bears no resemblance to the apartheid regime. 4 6) Inappropriate to Consider—Much Less Adopt—Divestment on an Unresolved and Hotly Disputed Factual Record
•The factual allegations purportedly justifying divestment are subject to intense controversy among the public (as the Committee members well know), as well as governments and international bodies and institutions. It may very well be that no consensual resolution of the charges and countercharges will ever be achieved. Any local action taken to divest from Israel, thereby presuming to adjudicate the disputes rocking the international community, would, in my view, be vulnerable to characterization as arbitrary and capricious action. This is especially so presuming that neither the City Council nor the PFPRSB can—nor would—dedicate the financial and human resources necessary to turn itself into a local "International Court of Justice"—a notion that is absurd on its face
***
For these reasons, I respectfully request the Legislative & Governance Committee consider the following:
Decline to recommend that the full Council entertain any Israel-focused divestment resolution; or, at minimum;
• Table the matter pending further review and analysis of the issues presented in this letter and in the Agenda Report.
Thank you for this opportunity to address the Committee. Your time and attention are appreciated.
Respectfully submitted,
dr&gg Ma^vfe^er^
Gregg Mashberg
5 Gregg Mashberg1
Via E-Mail
November 21,2025
Re: Proposed Divestment Resolution
Dear Mayor, Councilmembers, Legislative & Governance Committee and members of the Pasadena Fire and Police Retirement System Board:
I write to address a recurring argument I have heard at recent public meetings—that divestment from companies doing business with Israel today is analogous to divestment from apartheid South Africa in the 1980s. This comparison is fallacious for the reasons described below and does not support the anti-Israel divestment proposal now being urged on the Council and Retirement System Board.
To begin, apartheid South Africa maintained a legally codified, race-based system of segregation that governed every aspect of life, including citizenship, marriage, residence, political rights, employment, and mobility.
Black South Africans were legally barred from voting, from holding national office, from living in most of the country, and from participating in the institutions of the state.
By stark contrast, Arab citizens of Israel, approximately 20% of Israelis, are full citizens under Israeli law. They vote in national elections, serve in the Knesset, sit on the Supreme Court, hold senior diplomatic, academic, and legal positions, and enjoy equal protection under Israel's civil and criminal law. Arab Israeli political parties participate fully in the political system, including serving in governing coalitions. Israeli civil society is consistent with this democratic structure. For example, approximately 25% of Israeli doctors are Israeli Arabs and approximately 20% of the students at Israel's world renowned Technion-Israel Institute of Technology are Israeli Arabs. While disparities exist—as they do in many societies (including ours)—the legal framework is not one of racial separation or exclusion. 1 Personal contact information available immediately upon request and contained in speakers' cards submitted at Council and Retirement System Board meetings. 1 Whatever one's views on the broader Israel-Palestinian conflict, the lives and legal status of Arab citizens in Israel bear no resemblance to apartheid South Africa's structure or intent.
Turning to the divestment analogy itself, the South Africa precedent is no precedent at all. The South Africa divestment movement of the 1980s ultimately rested on a clear statutory foundation. In 1986, Congress enacted the Comprehensive Anti-Apartheid Act, authorizing federal sanctions and enabling state-level divestment laws. Many pension systems acted only after receiving explicit legislative mandates.
In contrast, there is no Federal or California statute authorizing or encouraging divestment from Israel today. To the contrary, California's AB 2844 prohibits the state from contracting with countries engaged in discriminatory boycotts of sovereign states, explicitly including Israel.
Thirty-eight states have passed anti-boycott laws focused on Israel. Federal law, 50 U.S.C. 4841, et seq., prohibits participation in foreign boycotts, including against Israel.
The two situations also diverge sharply in terms of U.S. foreign policy. South Africa divestment aligned with the foreign-policy direction of the United States. Today, the U.S. government maintains a close strategic, military and economic partnership with Israel, opposes broad-based foreign led boycotts of Israel, and explicitly rejects the BDS movement. A municipal divestment action directed at Israel would conflict with articulated Federal (and California) policy—the exact opposite of the case with apartheid South Africa
There is an additional issue I would assume you will discuss with your counsel. Modern Supreme Court doctrine (Zschernig; Garamendi) makes clear that local governments may not impose their own foreign-policy sanctions. Local measures targeted at a single foreign nation risk intruding upon the Federal government's exclusive authority over foreign affairs and may be subject to preemption. These doctrines were not applied to South Africa divestment actions in the 1980s, but they apply today.
Finally, the fiduciary environment has changed. California's Constitution (Article XVI, Section 17), requires pension boards to act solely in the financial interest of beneficiaries, and prohibits divestment based on political 2 or symbolic considerations unless supported by demonstrable financial risk.
This constitutional framework did not govern public pension actions during the South Africa era.
CalPERS and CalSTRS have repeatedly stated that selective, political divestment conflicts with fiduciary duty absent statutory direction.
For these reasons, the uniform U.S. response to apartheid South Africa offers no support for divestment from Israel today, I respectfully urge the Committee to take these manifest distinctions into account and reject the argument.
Respectfully submitted,
Gregg Mashberg
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