Illinois’ own anti-BDS law

The anti-BDS law signed into law by former Gov. Bruce Rauner in 2015 is more narrowly tailored than subsequent versions passed in other states.

Rep. Sara Feigenholtz, a Chicago Democrat who sponsored the bill in the Illinois House, said an earlier proposal was broader and included the contractor provision.

“The reason our law is not being challenged is because we chose not to include contracts and we align our values with investment policies,” she said.

The Illinois law essentially prohibits the state from directly investing retirement system funds in any companies that boycott Israel.

The Illinois Investment Policy Board identifies companies that participate in Israeli boycotts under the law, notifies those companies who have been identified and allows them to dispute whether they are in violation.

The investment board has seven members. Four are appointed by the governor and the other three appointed respectively by the Teachers’ Retirement System, State Universities’ Retirement System and Illinois State Board of Investment.

The board has restricted 21 companies for their boycotts of Israel. Most recently, the board identified property-rental app Airbnb to be included on the list of restricted companies that participate in a boycott of Israel in violation of Illinois’ law after the service pulled listings from Israeli settlements inside the West Bank.

Feigenholtz said the Ribikoff Amendment, part of federal tax law since the 1970s, sets the precedent that supports the constitutionality of Illinois’ law.

The Ribikoff Amendment prohibits anyone in the U.S. from participating in any foreign boycott imposed by a foreign country against a U.S. ally.

Brian Hauss, an ACLU attorney, said the civil rights organization does not have plans to sue states over their pension investment provisions.

Still, Hauss said the fundamental purpose of any anti-BDS law is unconstitutional.

“Anytime the government wants to compile a blacklist of its citizens based on their protected First Amendment expression, I think we find that extremely troubling,” Hauss said.

Jay Tcath, executive vice president at the Jewish United Fund/Jewish Federation of Metropolitan Chicago, said lawmakers were conscious to avoid a contracting provision.

“There is an issue, I would acknowledge, with contracts, and we didn’t go down that path with this legislation,” said Tcath, whose nonprofit organization was involved in crafting Illinois’ law.

The law simply follows in the tradition of three similar restrictions on state retirement funds to companies in apartheid South Africa, Sudan and Iran, he said.

“In the case of South Africa, we are not going to invest with those who support apartheid; in Sudan, those who support genocide; in Iran, those who support the building of a nuclear weapon; and those who are boycotting an important economic and strategic ally, Israel, of our country and the state of Illinois,” Tcath said.

“One can be a critic of Israeli policy and say what Israel is doing merits BDS against it. That is a legitimate argument. But you can’t say that the state in passing the BDS law is violating constitutional protections that were not at all at risk in the earlier three cases,” he said.