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May 16, 2011
SEC Allows TIAA-CREF Omission of Shareowner Resolution on Israel Divestment
    by Robert Kropp

Shareowner activists led by Jewish Voice for Peace requested that the pension fund engage with companies that profit from Israeli occupation, and divest if engagement proves unsuccessful.

In a letter dated May 6, the Securities and Exchange Commission (SEC) notified the Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF) that the Commission will allow the pension fund to exclude a shareowner resolution filed by Jewish Voice for Peace and other participants in the fund.

Stating "that avoiding complicity in human rights abuses and violations of law committed by others is both ethical and financially sound avoidance of unstable, insecure investments," the resolution requested that TIAA-CREF "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," and consider divestment if engagement proves unsuccessful.

In its r equest to omit the resolution from its proxy, TIAA-CREF stated that the proposal relates to the fund's ordinary business operations, addresses a policy that has already been "substantially implemented," and is misleading.

Taking issue with the fund's claim that its Policy Statement on Corporate Governance "renders the Proponents' proposal moot," Paul Neuhauser, an attorney for the shareowners, wrote in a l etter to the Commission, "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'."

"The Proponents are requesting the Company to take exactly the type of pro-active stance that it took with respect to portfolio investments in companies that were operating in the Sudan," Neuhauser wrote.

In 2009, TIAA-CREF committed to engaging with petroleum companies whose operations support genocide in Sudan, and to divest if progress was not made. The decision was made following years of engagement with the fund by Investors Against Genocide (IAG). Later that year, TIAA-CREF divested its holdings in four of the five major Asian state-owned oil companies with significant operations in Sudan.


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