the Murphy Administration is dealing with its own divestment debate documents obtained by Politico on Thursday show the governor may pull tens of millions of dollars from a Japanese conglomerate because the company cut ties with an Israeli defense contractor over the war in Gaza according to the report the divestment would make New Jersey one of the first known states to penalize a business that severed a relationship with Israel since the War Began budget and finance writer John Reitmeyer is with me now to explain how a Christie era law triggered this decision John good to see you uh this is interesting because this is quite the opposite of what all of these demonstrations have been calling for and in fact what other countries are doing which is divesting so how is this uh how did this come about from the 2016 law yeah that's right Brion it's good to be with you today uh the law really came at a time when many states were being pressured to respond to the formation of what's known as the BDS movement or boycott divest and sanctions movement that really started almost two decades ago in response to concerns about the treatment of Palestinians uh by the Israelis including in in settlements which are considered um illegal under international law and so there was this movement to begin boycotting or pressuring companies to separate ties from Israel Over concerns human rights concerns about the settlements which are again um considered to be illegal under international law the the the push back to that was this effort to pass laws in States like New Jersey and dozens of other states where companies then would be punished for um pressuring or boycotting Israel and so New Jersey law was put on the books in 2016 and since then we've had a couple of instances where Investments involving State Pension funds have uh been questioned if a company is perceived to be participating in a boycott of Israel most recently it involved uh the ice cream company Ben and Jerry's and its parent company ended up losing its pension fund investment as a result of its pull out of activities in settlements what are the financial implications for the state we should note these are uh a preliminary determination that's been made by the state but if it to go through with it does it just affect the pension or does it affect things like annuity funds other pots of money it it does I mean I think we should put this in context um for both the state and for this company it's a very small amount of money relatively so the pension fund is worth almost hundred billion dollar in New Jersey and the company itself is a major conglomerate with a pretty hefty stock price and so the amount of money that we're talking about will not make or break by any means New Jersey's pension fund nor will it probably have a major impact on the finances of of this company I'm not very familiar with it but just looking at its uh at its current stock price I I don't think the the pulling out if if it ends up this provisional determination ends up becoming final I don't think it will have a major impact on the company either although it'll be uh for sure symbolic you cited the Ben and Jerry's example but are there other instances especially in more recent times where this law has been triggered and in effect put into use not this particular law I mean the state has been pursuing so there was a divestment law passed in the wake of the uh Russian uh war against Ukraine and there have been some uh some pursuit of uh Contracting involving that divestment or or economic separation law more recently um there have really only been a handful of times since the 2016 law was passed that that investment have been flagged uh I should note that the the law requires an annual report to be prepared as well and this company didn't do any uh hiding of its position it was publicly reported um back in February that it was breaking ties with Israel in the wake of an international court of justice ruling that warned Israel to take steps to prevent genocide of GA of Palestinians living in Gaza and so this has been out in the open and the state by law uh feels like it has to take this response based on on uh what the action that was taken in 2016 during the Christie Administration yeah I mean that's what it constitutes and so they have to follow, John Reitmeyer for us, John thanks for shedding some light on that you're welcome [Music]