The Anti-Defamation League Is Investing in the New Oligarchy

This article was originally published on Mondoweiss.

In late February, just in time for its annual “Never is Now” conference, the ADL announced it had created an exchange traded fund (ETF), stock symbol TOV,  so people could invest according to “Jewish values.”

However, it will likely not surprise you that TOV, Hebrew for good, it turns out is not so TOV. The fund’s “Jewish Values”  include investments in the major oil companies, the major military contractors, and surveillance and spyware specialists like Palantir and Crowdstrike. In fact, the only S&P 500 companies excluded from TOV are two tobacco companies, a company that mines tar sands, and General Mills because that company sold its stake in a Jerusalem-based subsidiary. What’s up here? Where are the “Jewish values”? The ADL explains it prefers to “own and advocate.”

What’s going on here? When did the ADL turn into an investment advisor? It turns out this is part and parcel of the ADL’s campaign against the Boycott, Divestment, and Sanctions (BDS) movement. In other words, the ADL is aggregating stock ownership in order to pressure companies to adopt pro-Israel policies.

Back in 2022, the ADL acquired JLens, an organization that describes itself as “the Jewish community’s voice in the corporate boardroom” combatting 
“threats of antisemitism, Israel delegitimization, and all forms of hate.” While TOV is so far just a minnow in the world of the stock market, with pledges from Jewish organizations to invest $100 million in the exchange traded fund, a look at the ADL’s first campaign after it acquired JLens, tells us where they are really going.

How the ADL Disciplines Capital

The ADL launched its capital strategy by acquiring JLens and branding it as a “Jewish values” investor network, but in reality it is meant to be an Israel advocate in the arena of finance capital.

JLens had been established in 2012 to pressure investors against the global call to boycott and divest from Israel. Beginning by vetting the investments of Jewish communal organizations, and in partnership with the funding network of the Jewish Federations of North America, JLens established itself as a significant capital actor, advising $11 billion in Jewish communal funds.

Once it became a subsidiary of the ADL, JLens branched out into battling shareholder resolutions like those initiated by No Tech for Apartheid, and creating research that purports to show universities that divestment from apartheid-complicit companies would hurt their endowments.

It would then come as little surprise that JLen’s first campaign under the ADL’s wing was to undermine the practice of ESG investing. “ESG” stands for “environmental, social and governance” and generally refers to more socially conscious investing.

JLens’ biggest battle to date has been with Morningstar. Morningstar, which was a respected, neutral source of information for individual and professional investors ran into the ADL buzzsaw when it acquired the Dutch company Sustainalytics in 2020. Sustainalytics rates corporations on their environmental, social values, and corporate governance performance and risks. Their product is research and ratings, sold to investors as a platform for making socially-responsible investments – and as “ a quantitative, reliable method” to make sure they don’t have war crimes, climate deniers, forced labor, etc. in their portfolio. Investors reasonably assume that egregious violations of international law, including land seizure and apartheid, do not meet social responsibility standards.

When Morningstar bought it, Sustainalytics was already on the radar of pro-Israel corporations and advocates because it took note of their role in “human rights controversies.” As the Jewish News Service reported, “Critics have long noted that Sustainalytics issued damaging scores to companies operating in eastern Jerusalem and Judea and Samaria [settler terms for the West Bank] —what it formerly referred to as “occupied” Palestinian territories.” Reasonably enough, Sustainalytics had downgraded firms operating in Israeli settlements. Its critics complained that its ratings used “unfair assumptions, sourcing and models”. In short, Israel advocates did not like Sustainalytics’ attention to the violence and illegality of the settlement economy.

The Campaign Against Morningstar

What happened next made it clear that where the ADL and its right-wing allies are concerned, being “neutral” or objective is not an option for U.S. corporations. The Foundation for the Defense of Democracies, an ADL partner in the campaign against Morningstar, claimed Morningstar was “allegedly pro-BDS” and engaging in “economic warfare activities” against the state of Israel. JLens placed Morningstar on its Do Not Invest list. Ominously, the statement added, “JLens does not offer an opinion as to whether the business activities of Morningstar are in violation of U.S. anti-BDS laws.” But it certainly implied legal action. Shortly after its initial attack, JLens recruited a major lawfare organization, the Louis D. Brandeis Center for Human Rights Under Law, to its pressure campaign against Morningstar.

JLens then launched a concerted campaign to undermine Sustainalytics’ risk algorithm by simply exempting companies operating in settlements, or supporting the Israeli occupation of Palestine from being downrated for human rights violations,   More broadly, the campaign directly attacked the idea that investments, particularly of public, charitable, religious and educational organizations should be aligned with the values of those institutions. To back its demands, JLens and the ADL assembled its coalition of Israel-focused investors – The Jewish Federations of North America – along with the political firepower of the American Jewish Committee, and the Louis D. Brandeis Center for Human Rights Under Law. This coalition engaged in “almost weekly” encounters with Morningstar, as JLens reported to its supporters and was backed by threatening letters from numerous state officials.

Morningstar capitulates and creates the Israel Exception

Morningstar, facing pressure from the ADL and from states with anti-BDS laws, agreed to hire an independent law firm to investigate any anti-semitic bias in its ratings process.  By the end of 2023, Morningstar had abjectly caved in and exempted Israel from the human rights criteria it applies elsewhere.

In January, as Israeli settlers held real estate sales in the U.S. for land illegally and violently seized from Palestinians, the investment advisor and ratings company Morningstar announced that it no longer considered Israeli settlements a human rights problem. Instead, Morningstar decided, that corporations that invest in settlements can be pitched to investors as socially-conscious. Morningstar said, ​​“This means we won’t cover those areas because human rights issues, when related to contiguous territorial disputes, are less likely to be objective, reliable or consistent, and subject to complex geopolitical factors, divergent views and conflicting partisan media reports.”

To accomplish this Morningstar “updated” its rating algorithm to make “research on human rights issues connected to disputes concerning contiguous territories, which includes relevant issues pertaining to Israeli-Palestinian conflict area, ineligible for analyst coverage.”

Many of us would have less trouble than Morningstar in finding that the ethnic cleansing of Gaza and the occupied West Bank poses human rights issues. But Morningstar had crumbled under a concerted campaign led by the ADL and red state attorneys general, charging the ratings company with antisemitism for downgrading companies that profit from illegal West Bank settlements. The ADL, in concert with rightwing politicians, has worked to remove some of the last, frail, remaining guardrails for capitalism. It’s the model for everything to come.

The ADL, Israel, and the New Oligarchy

For the ADL and other Israel advocates, making Israeli state violence and ethnic cleansing stop mattering is essential. In the political sphere, the ADL has done that by casting genocide as “self-defense” and those who object as “antisemites.” But the governance of the U.S. is increasingly not political – it is run by capital. Vote for whoever you will, but the vast majority of electeds are at the service of big money. The ADL’s work in the capital sphere went largely unnoticed until student Palestine solidarity movements created powerful calls for universities to divest from companies complicit with Israel’s occupation and settlement of Palestinian land. Then the ADL hit back with alumni threats and, through its subsidiary JLens, crafting a report purporting to show that BDS would damage their endowments’ returns. The ADL has been at work for years to protect the flow of capital to Israel from BDS.

Morningstar and MSCI (JLens’ next target), as the two leading companies rating the ESG performance of corporations, are an obstacle to freeing trillions of dollars to be invested in war, surveillance, energy extraction, private prisons, and other extractive and exploitative capitalist enterprises. Israel needs these investments in order to support its army, expand its colonization of the Middle East, and keep selling the tech that makes it a strategic partner of repressive police and military forces around the world. And the launch of TOV, with its focus on aggressive shareholder advocacy,  promises to take this strategy several steps further.

But it’s not just Israel that needs capital to be militarized against the unrest that state violence produces. The United States has been hardening police forces and ramping up repression of political protest. Oligarchs here, too, aim to inoculate capital against calls by the public to defund state violence and to ameliorate climate change. Red states have been passing laws penalizing boycotts of fossil fuel corporations and weapons manufacturers, using language identical to their anti-BDS laws. Universities, in particular, have come under attack for any socially conscious investing. And student divestment campaigns have met fierce resistance from the ADL as well. This is the plan to make America great again.

The ADL and JLens success in exempting Israel from investor accountability for its human rights violations, illegal settlements, and out-of-control war machine is the tip of the spear in eviscerating ESG investing.