The shell of House Bill 685 easily passed Thursday evening on a 75-8 vote.
Hodges’ bill was part of a national conservative counter movement to the Boycott, Divestment, Sanctions campaign working to boycott Israel for its actions toward Palestinians. Hodges said it’s important for Louisiana to bolster Israel because the country is the U.S.’s closest ally in the ongoing fight against terror in the Middle East.
The Louisiana Deferred Compensation Plan allows public employees to supplement their retirement savings by using a portion of their salary for tax-free investments in mutual funds and indexes. Individuals elect to participate in the program and no state dollars are used.
HB685 would have required the deferred compensation plan’s commission and the state treasurer’s office to compile a list of companies in the mutual funds, indexes and money markets that boycott Israel. The commission would then be responsible for negotiating the removal of portfolio funds from companies on Hodges anti-Israel list and finding comparable funds for members to invest in.
Pearson and others questioned the bill’s reasonableness, noting index funds under large investment management firms like BlackRock, a firm the compensation plan utilizes and which oversees trillions of dollars in assets, won’t amend their company offerings to accommodate a small investment plan in Louisiana.
Pearson participates in the state’s deferred compensation plan and said few to no indexes or funds offer the same rate of return for the low participation cost the plan’s currently offering. Of the hundreds of companies in each fund, he said, only a handful may boycott Israel.
“Are we okay telling our Deferred Comp board to sell this fund because we have this one bad egg and 20 great ones?” Pearson questioned.
Pearson said divesting these funds over one delinquent company could do more harm to Israeli corporations and companies closely linked to Israel, many of whom participate in these funds, than to companies boycotting Israel.
“One is one too many,” Hodges said. “I don’t believe any state employee wants to invest in a company that boycotts Israel and supports terrorism.” Hodges implied that any company that boycotts Israel automatically supports terrorism.
Pearson’s amendment removed from HB685 mention of Israel and boycotting and left just the shell of the bill in place, including a provision to add two legislators to the plan’s commission board.
The measure will now advances to the Senate where its fate is iffy.