Why UT-Austin and Texas A&M students demand their schools divest from Israel

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Across University of Texas System campuses and Texas A&M, groups of students, faculty and staff have staged protests in solidarity with Palestinians and demanded that their schools divest from companies tied to Israel or weapons manufacturing.

As some have pointed out, this would require action from the investment management company that oversees the endowment funds for the UT and Texas A&M Systems.

“It’s clear that UT and other universities really have the opportunity to make a massive global impact with the decisions they make about their investments,” said Annette Rodriguez, an assistant professor of history at the University of Texas at Austin who is part of a coalition of UT-Austin groups calling for divestment from companies supplying the Israeli Defense Forces.

The governance structure of the university systems under Gov. Greg Abbott, a staunch Israel supporter, makes that a long shot. Here’s why university groups say they continue to protest and call for divestment.

What are UT and A&M’s ties to Israel?

The University of Texas/Texas A&M Investment Management Company, a nonprofit commonly known as UTIMCO, manages endowments — funds often created with donations and invested to continue generating revenue — that support the two university systems.

These include the Permanent University Fund, established by the state in 1876 to support the development of the UT and A&M university systems, and three separate UT System endowments.

Protesting students and groups have called out the university systems and UTIMCO for having Permanent University Fund investments in companies that supply “military equipment and defense contracts with Israel,” including Lockheed Martin, Raytheon and Northrop Grumman.

Protesters have also set their eyes on other companies listed by the Who Profits Research Center, which says on its website that it’s “dedicated to exposing the commercial involvement of Israeli and international corporations in the ongoing Israeli occupation of Palestinian and Syrian land and population.”

According to a 2023 audit report of the PUF and The Dallas Morning News, the endowment includes the following:

• Shares in Lockheed Martin valued at about $979,836
• Shares in Raytheon valued at about $584,622
• Shares in Boeing valued at about $8,452
• Shares in Northrop Grumman Corporation valued at about $1,388,595
• About $9.2 million in stock for Israeli software company Check Point
• About $100,000 in holdings for Tel Aviv-based Teva Pharmaceuticals
• Israeli government bonds and currency holdings in the Israeli shekel

Some protesting groups have pointed out that universities like UT-Austin have also received funding from Israel. According to a federal database that covers foreign funding, four public universities in Texas have reported more than $9 million in contracts, gifts and restricted gifts from Israel from June 2020 to February 2024. This includes the following:

• $1,501,306 to UT-Austin
• $4,338,028 to the UT MD Anderson Cancer Center
• $936,019 to UT Southwestern Medical Center
• $2,375,365 to Rice University, formerly known as William Marsh Rice University

Could UT and A&M divest from Israeli companies and weapons manufacturers?

Texas has had a law since 2017 that bans major companies contracting with government entities from boycotting Israel. UTIMCO could technically move to divest despite this law. But it probably won’t because of its political ties.

UTIMCO is governed by a nine-member board made up of at least three UT System Board of Regents, four members appointed by the UT System and two appointed by the Texas A&M Board of Regents. Four of the appointed members must have expertise in investments.

The regents for the UT and A&M systems — like in all Texas public university systems — are nominated by the governor and confirmed by the Texas Senate.

Gov. Greg Abbott, who has called on Texas universities to punish pro-Palestinian speech and cheered the arrests of protesters at UT-Austin, has appointed all current regents serving on university system boards during his almost decade-long tenure. And about two thirds of them have donated to his gubernatorial campaign, according to a 2022 Texas Tribune analysis.

On Sunday, Abbott commented on a story about students’ demands for UT-Austin to divest from weapons manufacturing companies selling arms to the Israel Defense Forces and that university President Jay Hartzell resign following his response to campus protests.

“This will NEVER happen,” Abbott posted on X. “The only thing that will happen is that the University and the State will use all law-enforcement tools to quickly terminate illegal protests taking place on campus that clearly violate the laws of the state of Texas and policies of the university.”

Free speech advocates have criticized Abbott and UT’s response.

A history of strong support for Israel

Abbott and Texas officials have been quick to express their support for Israel, which has launched airstrikes on Gaza and killed more than 30,000 Palestinian civilians in the last seven months. It follows an attack last October by Hamas militants that killed hundreds of Israeli civilians during a major Jewish holiday. Hamas also took more than 200 Israeli hostages during the surprise attack, and Israel has since detained thousands of Palestinians as prisoners.

Just a few days after the surprise Hamas attack, Texas Comptroller Glen Hegar reminded businesses of the state’s ban on Israel boycotts. Abbott flew overnight to Israel the following month to reaffirm Texas’ support for the Middle Eastern nation.

In 2017, Texas lawmakers joined many other states in passing laws against the pro-Palestinian Boycott, Divestment and Sanctions Movement, which “works to end international support for Israel’s oppression of Palestinians and pressure Israel to comply with international law,” according to the BDS Movement website .

Texas’ law used to require any businesses contracting with any state agency, higher education institution or local government to sign off on contract clauses in which they confirmed they had not boycotted Israel in the past and agreed that they would refrain from doing so for the duration of the contract.

The law faced legal challenges, including from a speech pathologist whose contract with a public school district was terminated after she refused to sign an agreement not to boycott Israel. It was rewritten in 2019 to only apply to businesses with 10 or more full-time employees and when a contract with a government agency is for $100,000 or more. The new law also requires the Permanent School Fund, the state’s retirement systems for state and local public employees to divest from companies that engage in such boycotts. This provision, however, does not include UT/A&M Investment Management Company.

Texas has similar laws against boycotts of fossil fuel companies and firearm manufacturers, but they also don’t require the state’s public universities to divest.

Last year, Texas lawmakers passed another law that specifically bans academic boycotts of foreign countries at public Texas universities if that decision would prevent students, faculty and staff from visiting, researching and interacting with that country. This means universities can’t prevent members of their communities from studying or engaging with a country, said Thomas Leatherbury, director of the First Amendment Clinic at Southern Methodist University’s Dedman School of Law.

Even though these anti-boycott laws don’t directly address university divestments, they highlight the political forces opposing such a move.

“I think it’s very clear that the governor and the state legislature are extremely pro-Israel,” Leatherbury said. “It would seem that even if a state entity could divest from Israel, it could be a really unwise political move to do so because of the expressed pro-Israel policies of the legislators and the executive branch of the state of Texas.”

A subcommittee of Texas senators is set to meet on May 14 for a public hearing on college policies related to free speech and to prevent antisemitism. In March, even before the latest round of protests, Abbott ordered colleges to revise their free speech policies to discipline antisemitic speech and singled out pro-Palestinian groups.

For Leatherbury, Abbott’s recent order and Texas’ laws targeting boycotts of Israel, fossil fuel companies and firearm manufacturers raise questions about First Amendment rights.

“They impose unconstitutional conditions on companies that do business with the government,” he said. “They’re examples of viewpoint discrimination, and preferring the state’s unconstitutional preference for a particular viewpoint.”

However, the legal landscape surrounding laws that ban boycotts on Israel is far from straightforward. While these laws have largely weathered claims of First Amendment violations, their reception in trial courts across the U.S. has been a mixed bag. Yet, they have generally survived against challenges that reach federal appellate courts. A notable example is an 8th Circuit Court of Appeals ruling that an anti-boycott law in Arkansas, similar to Texas’, was constitutional.

The crux of the matter, as articulated by the majority of the panel of judges in the 8th Circuit Court of Appeals in 2022, is that the First Amendment safeguards the right to express criticisms and praise as a form of free speech. However, it does not typically shield refusals to engage in business, as explained by Eugene Volokh, a professor of law at the University of California, Los Angeles who has submitted amicus briefs with similar arguments. The U.S. Supreme Court declined to review the decision in 2023.

This is reflected in anti-discrimination laws, which in most cases prevent businesses from discriminating in hiring decisions, Volokh said. However, there may be exceptions for businesses whose services directly involve speech, he said. (The U.S. Supreme Court also indicated this in 2023 in a case over a web designer’s refusal to create websites for same-sex marriages, noting its decision would provide similar protections for business owners such as artists, speechwriters and movie directors.)

Similar challenges to anti-boycott laws, like a lawsuit over Texas’ law brought forward by an engineering firm asked to sign a clause refusing to boycott Israel as part of a contract with Houston City Hall, have been dismissed on procedural grounds, Volokh said.

So why are university groups calling for divestment?

Rodriguez, the assistant professor who is part of the coalition of UT-Austin groups calling for divestment, said the group is aware of the political challenges of having their demands met, but it will continue to raise awareness of university investments related to weapons manufacturing and Israel to “shift the horizon of what is possible.”

“We are a public university and we are making choices about how we spend and invest our money, and the more the public is aware of this, the more again, the tide turns to divestment,” she said.

Movements for university divestments have seen some success today and in the past. Protesters calling for similar divestment demands at Ivy League schools, like Brown, and a few public universities — including Evergreen State College, University of Minnesota and the University of California, Riverside — have reached agreements to end their encampments as university leaders move to consider student arguments for divestments or commit to provide more transparency or other concessions.

Rodriguez said calls for universities to divest are important because they can “spill over” from college campuses to other groups like trade unions and religious groups, as occurred over 30 years ago during the movement to divest from South Africa and end apartheid.

During that time, UT-Austin students traveled to UT-Arlington to join students there for anti-apartheid demonstrations. The UT System Board of Regents assured students they would consider divesting, but Board Chairman Jess Hay also expressed opposing views to divestment, according to a 1985 Fort Worth Star-Telegram article. Rodriguez said that the regents never did divest, even though many universities across the country did.

“I think that UT has a unique opportunity here,” she said. “We could be a leader; we could be trying to rectify the mistakes of the past.”

Many financial analysts say divestments don’t usually change corporate behavior, according to NPR, and some say these divestments may even allow for other investors less likely to speak up to sweep in. But Rodriguez said the divestments in the anti-apartheid movement, which helped create “an understanding that the apartheid state was morally repugnant,” are an example of the strategy’s positive impact.

While UT-Austin President Jay Hartzell does not oversee UT System investments directly, Rodriguez said her group would like to see him chime in and make sure he “is being transparent, communicative and in conversation” with the university community.

More recently, groups at UT-Austin have also called on Hartzell to resign after he asked state troopers to help break up campus protests. They would also like to see the reinstatement of the UT-Austin student chapter of the Palestinian Solidarity Committee and “amnesty for those students who have been removed from the campus or been given disciplinary and trespassing actions,” Rodriguez said.

Spokespeople for UT-Austin, the UT System, Texas A&M System and UTIMCO did not return Texas Tribune requests for comment. In public statements made after protests, UT System leaders and Hartzell have defended their response to the protests.

“As I have previously stated, any attempt to shut down or disrupt UT operations will not be tolerated,” UT System Board of Regents Chairman Kevin P. Eltife said in an April 30 statement. “There is no rationale whatsoever that justifies the endangerment of our students and campus environments.”

At Texas A&M, the student group Aggies Against Apartheid organizes protests and community events to attract as much awareness as possible to the Middle East conflict. The organization demands that the university divest from companies profiting off of the conflict, denounce the police responses at other universities as violent and condemn the war as a genocide against Palestinians.

Akkad Ajam, one of the organizers, said he sees divestment as the most probable demand to be fulfilled out of the three. Whereas denouncement or condemnation would explicitly place A&M against the war, divesting could be framed as an effort from A&M to reinvest funds into other businesses that support the local community.

“That’s an easier decision to make than to say that we condemn the genocide because then that kind of throws them out there as one side of the political spectrum,” Akkam said.

Aidan McPhail, another organizer, said that A&M’s strong ties with engineering companies could be a significant roadblock in divesting from the intended firms. He pointed out that weapon manufacturers hire many students out of the school’s respected engineering program.

McPhail and Ajam said they feel cautiously optimistic about A&M’s response to Aggies Against Apartheid, but both recognized the process will be a long-term effort. Ajam acknowledged it took years before enough popular support swelled to help end apartheid in South Africa.

“The university has been working with us pretty closely, and has been respectful and friendly toward us, which is a significantly better response than many universities across the country have given their student demonstrators,” McPhail said. “I believe that we can achieve our goals, but it’ll be a difficult and a long struggle.”

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