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TIAA-CREF Hoax – Clarification

9 Jul

After watching the Presbyterians vote down divestment another 3-4 times on Friday (and seeing them boo someone trying to continue to drag it back on the agenda), I decided I could take a couple of days off before wrapping up the PCUSA story.

But before that, it’s time to keep a promise I made before the Presbyterians took center stage to clarify any remaining confusion over the recent TIAA-CREF divestment story/hoax.

Now that a week or so has passed before that story broke, we can now say with certainty that any story indicating TIAA-CREF itself has engaged in BDS activity (i.e., politically motivated divestment from Israel) is unambiguously false.

The company still maintains close to a billion dollars worth of investments in Caterpillar Tractor, and they have made statements before, during and since the recent “divestment” announcement that they are neither making investment or divestment decisions based on Middle East politics (Israel-related or otherwise), nor are they responding to any political campaign (by Jewish Voice for Peace or anyone else) to make politically motivated divestment choices.

So stories that announce or imply that CREF has done anything but make automatic buy and sell choices based on existing indexes (financial or otherwise), especially those like this one that assign specific human and political motivation to such decisions, should be seen for what they are: a deliberate attempt to deceive the media and the public.

The second story associated with recent events has to do not with TIAA-CREF but with MSCI, an indexing organization that is followed by CREF and others.  This organization, which maintains an investment index based on Environmental, Social and Governance (ESG) issues, did recently remove Caterpillar from its list of approved investments.  And because MSCI indexes are followed by TIAA-CREF, this is the reason why CREF removed Caterpillar from the one fund it maintains that is tied to MSCI’s ESG-related recommendations.

Now to be fair, MSCI did release a statement saying that “The key factors determining the rating include a January 2012 labor dispute and subsequent plant closing in Canada, an on-going controversy associated with use of the company’s equipment in the occupied Palestinian territories, management of environmental issues, and employee safety.”

But the company also made another statement indicating that they use an “established methodology” to determine which companies are listed and de-listed.  But, as previously noted, the company has an unambiguous way to specify a prohibition on certain countries (a prohibition they place on countries like Sudan, but not Israel).  It could be that MSCI was responding to campaigns by JVP and others which put Caterpillar on their radar.  The trouble is, MSCI also makes it clear that “decisions are not based on representations from interest groups.”

Fortunately, this most recent statement published by MSCI finally clears up this seeming inconsistency.

In it, they indicate where issues like the Middle East conflict fall into their decision-making matrix (as a component of “Community & Society” which constitutes 10% of their overall score for a company).

Significantly, they state explicitly that their analysts “do not make judgments on the positions of the interested parties” but rather follow political controversies (Middle East related and not) to determine if they might cause a risk to the investments or reputations of index members.  In other words, because a controversy regarding Caterpillar and Israel exists, MSCI is professionally obligated to follow it (as they must follow any political controversies related to an investment), but only to determine if they pose financial or reputational risks to investors (not to make moral or political judgments on the parties or issues involved).

Given that MSCI is not a BDS organization, they most likely don’t see the Arab-Israeli conflict as the only issue impacting “Community and Society” in the universe.  So, at most, this controversy must weigh as just a fraction of the 10% MSCI assigns the “Community and Society” category as a whole.  But was this fraction of a percentage enough to tip the scales against Caterpillar this year?

Well apparently, this item has been incorporated into MSCI’s calculus since 2004, an eight year period during which it caused no changes to Caterpillar’s status.  So was 2012 the tipping point when the boycotter’s cause célèbre finally got Caterpillar bounced?  NO according to MSCI, (the horse’s mouth), who says that this political factor “did not trigger the rating downgrade in February 2012.”

So there you’ve got it.  TIAA-CREF did not divest from Israel (again, defining divestment as the BDSers do as a decision to sell assets in order to make a political statement).  And if MSCI used as a factor in its decision making “an on-going controversy associated with use of the company’s equipment in the occupied Palestinian territories,” that factor (1) could only have been weighted as fraction of 10% of their decision; (2) reflected no political or moral judgment on the part of MSCI regarding Caterpillar, Israel, the Palestinians or anyone else; (3) has been included in their decision-making for close to a decade without affecting MSCI’s inclusion of Caterpillar in their ESG indexes; and (4) did not play a role in this year’s decision to remove Caterpillar from their list of recommendations.

Walking through these details takes some time, and I’m sure the “TIAA-CREF/MSCI divested!” meme will continue to propagate and morph faster than this speed at which the truth can catch up.  (In fact, a comment left here has somehow merged the TIAA-CREF, MSCI and Presbyterian stories to create a fiction whereby TIAA-CREF had divested not just from Caterpillar, but from other BDS targets – Motorola and Hewlett Packard as well.)

Now it is the propagandist’s job to stress any information that supports their version of events (even if it consists of a single phrase in a press release) and ignore all other information that might get in the way of their storyline (such as the subsequent statements noted above which provides the context and clarification needed to genuinely understand the issue).  And I don’t in any way want to deny BDS activists the right to do their job.

But the rest of us are allowed to look at a picture bigger than JVP et al would prefer others to not think about.  And we are also allowed to take into account the boycotter’s multi-year track record of trying to pass off business decisions as politically (i.e., BDSily) motivated, only to be exposed as trying to sell false information in an effort to generate momentum for their otherwise flailing cause.

TIAA CREF BDS Hoax – Motivation

23 Jun

While the world of modern finance can sometimes seem mind-bogglingly complex, the notion of divestment (as used by the BDS “movement” as their own middle name) is remarkably simple to understand.

For “divestment” (as the BDSers use the term) is specifically a political act consisting of the decision by an institution (such as a school, church or financial firm) to sell off assets for the sole purpose of making a political statement (usually in protest of the company or country associated with the assets being sold).

Such political divestment is not only distinct from other activities that also involve the selling of assets (such as selling stocks because you feel they will soon decrease in value), it is often in opposition to motivations behind these other sorts of selling activities (especially if political divestment involves selling  assets that might otherwise benefit an institution financially in order to make a political statement).

As a political decision, divestment must be a public act.  For divesting secretly (i.e., not explaining to anyone WHY you are selling off specific assets) drains political divestment of all political meaning.   And just as critically, the people who must ensure the world knows why they are divesting for political reason are the people who are actually doing the divesting.

This seems so obvious it feels strange to have to explain it.  But in nearly every case of a BDS boasted “victory,” (such as Hampshire or TIAA-CREF), you’ve got a situation where someone other than the organization allegedly doing this divesting (Students for Justice in Palestine – or SJP – in the case of Hampshire, Jewish Voice for Peace – or JVP – in the case of CREF), has claimed the right to speak in the name of and assign political motivation to a third party.

To show you how such claims must be considered bogus, consider if I was to claim that TIAA-CREF continuing to hold millions of dollars in stocks from companies on various BDS blacklists as representing the retirement giant’s faith and devotion to the Zionist enterprise and contempt for the BDS “movement.”  In such a situation, most BDSers would legitimately cry foul and explain that CREF has bought those assets for purely financial reasons.

Yet when organizations like Hampshire or CREF sell off just a small portion of these same assets (while retaining others), in swoop these same BDSers claiming that such decisions were not only political, but were the direct result of their own BDS-related activities and campaigns.

Even when the organizations allegedly doing all this divesting strenuously deny that they made any political decisions, the boycotters continue to fire off their victory press releases and create more and more convoluted explanations as to why an organization like CREF (which has made statement after statementregarding their rejection of JVP positions and requests) are actually in the BDS camp.

In the past, I’ve attributed this behavior to a post hoc fallacy in which the boycotters claim (and maybe even believe) that because their own political activity preceded the decision by an institution to sell off assets on the BDS blacklist, that their campaigns caused these sell offs.  While such an explanation seems ridiculously simple-minded and self-serving, it at least gives the BDSers some wiggle room to claim logical incompetence, rather than the desire to deceive, as the motivation behind their many fraudulent statements (especially in cases where the sell-off of assets represented pure business decisions or automatic decisions made by computers – as the result of indexing mechanisms, for example).

But in the case of the most recent BDS hoax related to TIAA-CREF, the spearhead organization behind the CREF divestment campaign (the aforementioned Jewish Voice for Peace) is not just claiming that because CREF sold some Caterpillar shares after JVP’s divestment campaign started that CREF was thus responding to their campaign.

Rather, they are assigning specific, human decision-making to the TIAA-CREF organization which they claim in their press release not only sold the shares specifically for political reasons, but did so in defiance of a named US Congressman.  And while post hoc fallacy can explain an argument that because A preceded B that A caused B, assigning make-believe motivation to human decision makers who clearly did not make the decisions being described can only be seen as a deliberate act of deception.

And so the claim by JVP and others that TIAA-CREF has divested from Israel is exposed as a lie for the simple reason that TIAA-CREF has NOT divested from Israel (presuming divestment means what it means when the BDSers themselves use the term).  Now JVP et al can always prove me wrong by holding a press conference with the decision makers at CREF to confirm their version of the truth.  But absent that, we can only conclude that the BDSers have returned to old habits of hoaxing.

Lacking the ability to get TIAA-CREF itself to confirm their claims that TIAA-CREF is now in the BDS camp, the BDSers have been reduced to spinning wild tales about an organization that, as far as I know, has never come up in any BDS discussions to date: the financial indexing firm MSCI.

As far as I can tell, the boycotters are trying to say that we should ignore the fact that TIAA-CREF has refused to divest and continues to deny that they have divested, and to instead assign a CREF divestment victory to them because of the decisions of this third party.

And who is MSCI and what did they actually decide?  More on that tomorrow.

TIAA CREF – Another BDS Hoax?

22 Jun

We interrupt regular broadcasting with news of yet another potential BDS-related hoax.

Once more, a hoax tale seems to be centered on TIAA-CREF.  If you recall, the boycotters were caught red-handed several years ago trying to pass off a generic business decision by the retirement giant as a response to their request to get the organization to divest from Israel.

Rather than simply act as though the whole incident never happened, the BDSers took the unusual step of launching a multi-year campaign to get TIAA-CREF to actually do what they had simply pretended they did the year before.

The response to date from CREF has been a series of polite “please piss off” messages.  Which is why this recent announcement that their divestment campaign has borne fruit seems mighty suspicious indeed.

To begin with, the story is not accompanied by any statement from TIAA-CREF itself that it has taken any action that could be described as political in nature.  Which makes sense once you realize that CREF is still heavily invested in the company the boycotters are claiming as a divestment win (the long suffering Caterpillar Corporation).

In fact, if you dig a little deeper it looks like CREF did not make any politically related investment or divestment decision at all, but rather that one of its funds (one targeting social investors) was following the lead of an independent research firm (MSCI) which generates an index which many “Social Responsibility” investment funds use to determine what will and will not be included in their portfolios.

Now earlier this year, MSCI downgraded and eventually removed Caterpillar from their index, which means that CREF was just following along with a decision made by an independent researcher, not making a judgment regarding Caterpillar on its own (as reflected by the fact that other funds managed by CREF still hold millions in Caterpillar stock).

Which brings us to the question of why did MSCI (an organization none of us – including the BDSers – ever noticed or mentioned until just this week) made the decision they did regarding Caterpillar?

BDS press releases do a masterful job of claiming victory while never citing a single quote (or anything specific) that would indicate that this decision was based on their effort – or anything having to do with the Arab-Israeli conflict for that matter.  (As usual, Jewish Voice for Peace goes to the furthest rhetorical extreme, claiming that TIAA CREF not only made a specific decision to divest from Israel, but did so in defiance of a US Congressman – with no evidence supporting either contention/invention, of course.)

Might MSCI have taken into account some of the faux controversy the BDSers themselves have generated in judging whether Caterpillar was in or out?  Or might some of the union issues the company has been facing been a deciding factor?

We don’t know (but many of us are trying to find out).  But given the total lack of evidence those touting the “BDS victory” narrative have produced, I think it’s safe to say that we’re looking at another situation where a business decision with no specifically known motivation is being sold by the boycotters as a result of their work.  And given the boycotter’s track record for fraudulently trying to pass off similar stories in the past, I think it’s safe to ignore any BDS bombast until they can produce for us a quote from TIAA-CREF itself (the company they are claiming to have done the BDSers’ bidding) confirming the story.

I have a sneaking suspicion that this move may represent a “long bomb” play by the boycotters in the run-up to next week’s PCUSA General Assembly, a hope that one story of BDS success or momentum might help put them over the top when the Presbyterians vote on divestment in the next couple of weeks.  But if this turns out to be yet another BDS hoax, one wonders how that story will play out as the boycotters descend on Pittsburg in order to explain to the Presbyterians that following them is the only moral choice.

PennBDS: The TIAA-CREF Campaign

21 Jan

This is part of a series of articles based on the program of the upcoming PennBDS conference. Check out this landing page to find out more.

In some language (probably Yiddish) there exists a word that combines the notions of chutzpah and clownishness.  And if one needed an example to illustrate this concept, one need look no further than the biggest campaign on the BDS agenda:  the one asking the massive educational retirement fund TIAA-CREF to divest from the Jewish state.

What makes this campaign so absurd is that, according to the BDSers themselves, TIAA-CREF already complied with their wishes and divested from Israel back in 2009!

If the chronological paradox of a group launching a major campaign to get CREF to do what the boycotters claimed they have already done sounds like a badly written Doctor Who episode, you need to understand that 2009 was what I refer to as the Year of the BDS Hoax.

The hoax that Hampshire College divested in 2009 was exposed years ago (and confirmed with absolute certainty just a few weeks back).  But in that same year, the BDS presses were running hot with stories of major investment firms following their wishes and pulling funds from the dreaded Zionist entity.

The story behind the original TIAA-CREF hoax was that the retirement fund sold off shares in a company called Africa-Israel, a company headed by a controversial figure who had been targeted by anti-Israel activists.  But more importantly, it was a highly leveraged company heavily invested in real estate that was struggling with massive debt after the financial crisis of 2008.  And CREF’s decision to sell off shares had everything to do with the company’s financial woes, and nothing to do with politics.

The story behind subsequent divestment hoaxes was that in 2010 Israel emerged as a First World economy, exemplified by the country joining the Organizationfor Economic Cooperation and Development or OECD (over the protests of the usual suspects).  The Israel economy, you see, has nearly doubled in size over the last decade (i.e., during the very years the boycotters were working tirelessly to bring that economy to its knees).  This fast growth, coupled with sound governmental financial management, transitioned Israel from a developing to developed economy, similar to the transition the so-called “Asian Tiger” economies went through in the 80s and 90s.

This transition had counter-intuitive consequences in the financial markets since many institutional investors have funds specifically chartered to only invest in developing economies.  And once Israel left that developing category by joining the OECD, those funds were legally required to sell their Israel-based assets.  Now there is always a lag between when such required/automatic sell-offs take place and when investors chartered to buy stock in developed economies get around to doing so.  And so, ironically, First World economic status led to a transition period where more selling (i.e., “divestment”) than buying (i.e., “investment”) of Israeli equities took place.

In the case of sell-offs related to the Africa-Israel’s financial crisis and OECD-related financial-timing issues, the BDS brigade took advantage of ambiguity regarding the word “divestment” to claim that these sell-offs were a result of their work and should be seen as acknowledgement of their Israel = Apartheid message by the financial community.  You see, there is “divestment,” the selling of stock for any reason (the usual one being expectation that it will down in price), and “divestment” the deliberate action by an institution to sell shares in certain companies purely as a political statement (something I refer to as “political divestment” to avoid the aforementioned ambiguity).

Now we all know what real, genuine political divestment looks like.  We saw it with regard to South African during the Apartheid years, and we see it now in connection with countries like Sudan and Iran. In each and every case, it is the people actually performing political divestment that explicitly tell the world they are doing so. Political divestment done in secret is utterly meaningless, so the one and only way you know that divestment is political in nature is that the organization doing this type of divestment (be it TIAA-CREF, Hampshire College or some else) say so themselves.  And just as Students for Justice in Palestine cannot speak in the name of Hampshire College, so too divestment advocates don’t get to project their own political motivations onto the actions of financial institutions.

To state the obvious, neither TIAA-CREF or other organizations claimed by BDSers as political divestors did anything of the kind.  And they were none-too- amused that partisan political organizations were trying to stuff propaganda into their mouths by claiming purely financial decisions were actually political.  So within a few days of the BDS press releases going out, claims of divestment by TIAA-CREF and others were thoroughly debunked.

Now most normal people would either own up to such dishonest behavior (if they want to act ethically and morally) or shut their mouths, pretend the whole thing never happened and never mention TIAA-CREF again (if they’d rather avoid the whole ethics and morality thing).  But what are we to make of the fact that less than a year after getting their hand caught in the cookie jar the BDS “movement” announced that their brand new, biggest campaign yet was going to consist of getting TIAA-CREF to actually do what the boycotters just pretended they did the year before?

I actually played with the whole time-travel notion in this epic time waster (which you are free to read during the PennBDS/Jewish Voice for Peace session on this topic).  But here in the purely linear temporal space you and I call reality, the idea of fraudulently claiming an organization like TIAA-CREF as your ally one year only to turn around and campaign to get them to really do what you claimed they had already done qualifies as positively weird.

Beyond this weirdness, this story also raises the question of whether one should trust anything (including claims about Middle East realities) coming from the mouth of a “movement” that would lie about something so blatantly.  And given that the facts noted above are just a .13 second Google search away, it makes you wonder when they decided that everyone but them is a complete and total idiot.

Wazzup BDS? – Part 2

6 Jun

If the BDS cru has anything to crow about after another year of being shown the door in North America, they can probably point to the UK to encourage the ranks.

Here in the US, student councils were thought to be fertile territory for getting divestment resolutions passed (a weak substitute for convincing schools to actually divest, but a desired booby prize given that real college divestment remains a fantasy after a decade of tireless divestment effort on campus).But alas for the boycotters, student councils refused to take the bait (especially after the Berkeley BDS fiasco last year).

Not so in the UK where divestment calls were recently passed at two major college unions: the National Union of Students (NUS) and the University of London Unions (ULU).

In a period where boycott is still on the agenda in the umbrella Trades Union Council (TUC), these wins have given a shot in the arm to BDS advocates working both the student and union “beats.”

Why such a difference between student and union groups in the UK (who seem to be giving a hearing to BDS) vs. the US (which continues to be barren territory for any type of boycott or divestment win)?No doubt the BDSers would point to Europe as the source of all enlightenment creating a path that we mouth-breathing Americans will eventually follow.Meanwhile, critics point to dynamics particular to Europe (where Jews have limited political clout vs. Muslims whose political strength is growing).The fact that Europe has become an uncomfortable place for Jews generally has caused many to highlight general European discomfort with people of the Hebrew persuasion (which, in England, is unrestrained by Holocaust guilt you find on the Continent).

Personally, I suspect that these particular votes can be explained with more pragmatic reasoning based on the general BDS strategy of: (1) finding civic organizations with a progressive bent, ready to make statements on international issues beyond their purview; (2) infiltrating said organizations in order to get them to subscribe to the narrow BDS political agenda; and (3) refusing to back down under any circumstance, regardless of how much BDS politics poisons the organization they are trying to subvert.

And, in truth, the NUS and ULU votes seem to be modeled on similar votes in Britain’s teacher’s union (the UCU) whose leaders continue to try to pass anti-Israel resolutions despite these being abhorred by the membership.At the student union events, decisions to brand Israel an Apartheid state were passed in the waning moments of long meetings by “majorities” of one and then declared the will of 120,000 student union members, most of whom had no idea these words were being voted into their mouths.

So these votes seem to say more about the inability of British civic organizations to avoid being manipulated than it does about England, Israel or the Middle East.

In fact, if you look at other BDS “successes” in the UK, they seem to be following a trajectory into deeply troubling, if not grotesque, territory.At Covent Garden, a group of thugs harass an Israeli shop into closure and this stormtrooper-like activity is declared a win for enlightened virtue.

In Scotland, a council representing a region whose child mortality rate is twenty points worse than Gaza’s is putting their energy into keeping Israeli products out of the region and then strutting with indignant rage when they’re accused of book banning (with the excuse that “we’re not banning Israeli books, just books printed in Israel”).

But you have to go back to the aforementioned UCU to see the ultimate endpoint of the BDS “consciousness.”

For, in addition to struggling to get an academic boycott passed in the face of members uncomfortable with their union leading an assault on academic freedom, UCU has also had to struggle with the fact that their boycott has been declared as potentially violating European anti-racism law.

What to do about this little inconvenience? Why simply reject the EU definition of “anti-Semitism” of course!In a vote that is sure to cause even more Jews to flee the organization, UCU declared that any definition of anti-Semitism that defines as bigotry even outlandish or pathological criticism of Israel must be declared null and void.

While anti-boycott activists may have made a tactical error in stressing the role of anti-Semitism in UCU shenanigans over the last few years, I can’t imagine anyone thought the organization would have the chutzpah to simply define modern manifestations of the phenomenon out of existence.

But that just goes to show you the effectiveness of trying to prick the conscience of BDS fanatics without understanding that, at the end of the day (and despite their pose as the ultimate examples of human-rights enlightenment), with regard to conscience the boycotters have none.

TIAA-CREF 2 JVP: FU!

2 Jun

As some of you may recall, in 2009 Jewish Voice for Peace (JVP) and other associated usual suspects decided they would play their then-familiar divestment hoax card with the huge and well-known academic retirement fund TIAA-CREF. Fortunately, this was just the period when blogs like this one were coming online to double check the BDSers claims and catch them with their hands in the cookie jar during a twelve month period of similar attempted divestment frauds.

Demonstrating that such groups have chutzpah (no substitute for integrity, but worth mentioning), they followed up their 2009 hoax with a 2010 campaign to get TIAA-CREF to actually do what JVP just pretended they did one year previously: divest from Israel.

Well, lo and behold, TIAA-CREF decided that you can’t screw someone on Friday and then ask them to do your bidding the following Monday. And so divestment will not be on the CREF shareholder ballot in 2011. As one of my favorite commenters might put it: “Ooops!”

To get a sense of the thinking behind these types of stunts, let me direct you to the most excellent adventures of Sydney and Omar (a little something I posted last year during a slow period).

Party on dudes!