Corporate America and the Israeli Occupation

Corporate America and corporate boardrooms across the globe wield enormous political influence. It may in fact be argued that in today’s material world corporate interests are the primary motivating factors for political action. In the Israeli-Palestinian conflict that power, for a multitude of reasons, has been unjustly mobilized to help sustain 35 years of an illegal Israeli military and economic domination of the Palestinian people.

In light of this and the deteriorating situation in the Middle East the time has come for corporate boardrooms of companies involved in that region to reassess their role, even if that role has been to remain silent for all these years. The corporate world must channel its influence to end the Israeli occupation. The Israeli-Palestinian conflict has reached a dangerous point that has the potential to disrupt business activity, especially U.S. business interests throughout the Middle East. Long-term U.S. national strategic interests in the region are also at risk, namely the cost and uninterrupted flow of oil. Millions of U.S. corporate and citizen tax dollars spent on building the Palestinian economy were lost in this latest Israeli offensive against the Palestinian civil and national infrastructure. It would be negligent for corporate America to remain silent while its government recommits yet more tax dollars to the region without addressing the source of the conflict. Ending Israeli occupation is the only solution that will put the region back on track.

While earning my MBA degree at Tel Aviv and Northwestern Universities, Professor of Leadership and Ethics, David Messick, assigned two readings to the class. One, by Milton Friedman, argued that corporate executives do not have a social responsibility but they must conform to the “basic rules of the society, both those embodied in law and those embodied in ethical custom.” The second reading by Kenneth Goodpaster argued that corporate managers had a “dual role” in their capacities: to make decisions that were best for their corporations and to have an eye focused on how their business decisions affected the environment external to their firms. Both of these writers, although presenting conflicting viewpoints, are good reference points for the argument that corporations around the world have a role to play to help end Israeli occupation. Whether one solely relies on taking decisions that are legal or instead has a greater awareness of his or her corporate social responsibility, the result is the same – be aware how your actions may support the oppression of others.

For corporate executives less inclined to be socially responsible, U.S. laws that govern U.S. foreign trade must be the guiding light. There exist a number of laws that U.S. corporations are legally bound by, such as the U.S. Foreign Assistance and Arms Export Control Acts. United States law stipulates, inter alia, that any defense articles and defense services to any country shall be furnished “solely for internal security, [or] for legitimate self-defense” (<22U.S.C>. 2302 and 2754). Israel’s excessive and disproportionate use of force to suppress the Palestinian people and its recent offensive against Palestinian cities with <U.S.-supplied> weaponry clearly exceeds the bounds of what could be considered legitimate self-defense and therefore is in violation of U.S. law. Corporations would be ill advised to continue ignoring this fact in the hope that those persons that are being damaged by their business decisions will not take legal action in the future. Legal ghosts have haunted many firms, especially in Europe, many years after their neglect of humanitarian law. Pro-active decision-making today that aligns a firm squarely against Israeli occupation will spare it the potential agony of facing criminal charges in the future.

Furthermore, according to U.S. law, “no security assistance may be provided to any country the government of which engages in a consistent pattern of gross violations of internationally recognized human rights” (<22U.S.C>. 2304). The U.S. State Department has repeatedly documented in its annual reports that Israel engages in “torture or cruel, inhuman, or degrading treatment of punishment, prolonged detention without charges and trial, causing the disappearance of persons by the abduction and clandestine detention of those persons, and other flagrant denials of the right to life, liberty, or the security of people.” The time is long overdue for corporate America to take note and act accordingly.

Additionally, there is a multitude of U.S. policies and government decisions that should ethically guide corporations in this conflict. For instance, consider the illegal Israeli settlements that continue to be built across Palestinian lands in the West Bank, Gaza Strip and East Jerusalem. Successive U.S. administrations have stated that these settlements are either, “illegal”, “obstacles to peace”, “unhelpful”, “provocative” or “impediments” to peace. The time has come for corporate executives from firms like Caterpillar, whose equipment is used in building these settlements, to understand the negative contributions they make to Middle East peace by not heeding their own government’s warnings over many years. These negative contributions are above and beyond their potential violation of U.S. law. The separation of the executive, legislative and judicial branches of government, coupled with short-term goals of powerful interest groups, may complicate or delay legal action against those corporations that support Israeli occupation, but one should not be fooled into thinking that such a delay will last forever.

U.S. military-related corporations support Israeli occupation by way of an institutionalized mechanism provided for by Congress. Congress has stipulated that seventy-five percent of U.S. foreign military aid to Israel, which amounts to over $2 billion annually, must be spent buying U.S. products and services. Firms like Lockheed, Boeing, United Technologies, Raytheon, ExxonMobil, Northrop, Pgsus, General Dynamics and Oshkosh among others are directly contributing to the tools that Israel uses to violate international and humanitarian law. The following are some specific cases:

* U.S. weapons manufacture Lockheed Martin Aeronautics Company, which provides the fighter jets that have been used by Israel to bomb Palestinian cities that have been under military closure for 18 months, proudly announced on September 5, 2001 from Fort Worth, Texas that Israel had decided to purchase 52 more Lockheed Martin F-16 fighter jets. The contract value was reported approximately $1.3 billion for only the aircraft.

* Sikorsky Aircraft Corporation, a subsidiary of United Technologies Corporation, sells Israel U.S. armaments used to destroy Palestinian cities and perform political assassinations of Palestinian civilians from the sky. “Our company’s relationship of more than 40 years with Israel is a source of pride,” said Sikorsky President Dean Borgman in a February 1, 2001 press release while announcing his firm was awarded a $211.8 million contract for 24 additional Black Hawk helicopters to serve the Israeli Air Force.

* Other less visible military suppliers are those like Federal Laboratories in Saltsburg Pennsylvania, which provides CS tear gas to the Israeli military. During the first Palestinian Intifada (Uprising) in 1988, Federal Laboratories witnessed civil disobedience actions at their plant gate in Saltsburg and a lawsuit in U.S. courts after Israel misused their lethal tear gas by firing it into closed areas that resulted in the killing of many Palestinians. Federal Laboratories stopped exporting the gas for six months in 1988 and sent a fact- finding team to Israel before resuming sales.

Corporate America’s support of Israeli occupation is not confined to military equipment suppliers. In fall 1999, Burger King opened a franchise restaurant in an illegal Israeli settlement in the West Bank, only to be forced by its customers to close down the store to avoid a worldwide boycott.

This month alone three U.S. firms have been lured into collaboration with Israel’s illegal occupation. This week, Fifth Third Bank Northeastern Ohio purchased $500,000 worth of bonds from Israel. Robert King, president and chief executive of the Cleveland affiliate of Fifth Third Bancorp in Cincinnati proudly stated in a press release saying that, “This year is the state of Israel’s 50th anniversary, and now more than ever, it is poised to continue its growth as an industrial world leader.” No mention was made by Mr. King that such growth comes at the cost of systematic gross violations of human rights by Israel. I suspect a closer look at these Israeli bonds will find that they are part of the portfolio of hundreds of public and private pension funds across America. Pension fund managers and their beneficiaries can take an active part in ending Israeli occupation by immediately divesting their portfolios of these bonds.

And earlier this month, Microsoft Israel put company executives in Redmond, Seattle in an awkward position when they sponsored two large billboards on a main Israeli highway saluting Israel’s armed forces at the same time the Israeli military was indiscriminately bombing the Jenin refugee camp into what is rapidly amounting to war crimes. Only days after a grassroots letter writing campaign, partly led by the Israeli peace group Gush-Shalom, Microsoft executives announced that Microsoft Israel had acted alone and was instructed to take down the billboards, which they promptly did. Israel is the largest research and development site for Microsoft outside of the U.S. Bill Gates would serve world peace well by continuing his involvement and requesting Israel to end the occupation in order to qualify for continued commercial opportunities. The same can be said for Intel Corporation, which has the largest production facilities outside of the U.S. located in Israel.

Divesting in countries that are in blatant violation of international and humanitarian law is not new. The divestment campaign that targeted apartheid in South Africa is a case in point. When South African business leaders saw that apartheid was jeopardizing their own business interests they played an important role in convincing their government to fall in line with international law, which led to the ending of apartheid. One might argue that no grassroots commercial divestment in Israel can be large enough to convince the Israeli government to change paths. This is debatable. However, it is clear that such a campaign would send the right signals that the time has come for Israel to join the world community by ending its oppression of Palestinians. (It is interesting to note that Israel was one of the closet allies to the South African apartheid government.)

Corporate responsibility is difficult to gauge. Most serious business decisions take place behind closed doors, outside of public view. As executives struggle to climb the corporate ladder they are loathe to offer any comments that may “rock the boat” with regard to Israel. Nevertheless, standing on the right side of history with regard to the occupation is what will set apart the leaders in corporate America. The separation of personal convictions from corporate policy is a must and is always in the best interest of the firm. Otherwise, an ill- founded personal conviction may unnecessarily put the corporation on the front lines of a future legal battle that it does not desire. Today many European firms are learning this lesson the hard way after it was proved they supported discrimination and atrocities against Jews in Europe during WWII. To this date, many are still paying the price both morally and financially.

Israel has been able to sustain its illegal occupation largely for two reasons. First, the U.S. government, shackled by the special interest groups such as the pro-Israel lobby AIPAC, has continuously provided Israel with unfaltering political, economic and diplomatic cover. Even though this is the case, U.S. administrations have systematically provided the world with signals (SOS’s if I may) that wrong is being done. This can be seen in the repeated statements regarding Israeli settlements and in the State Department’s Country Reports on Human Rights Practices. The U.S. government needs corporate America’s help to realign its policy in the Israeli- Palestinian conflict. After all these years, corporate America should be hearing these signals and acting accordingly.

Secondly, and equally important, the Palestinians have failed so far to translate their struggle into a sustainable grassroots strategy that seriously engages the millions around the world who are in support of their cause. Grassroots activism played a significant role in the success of the South African movement against apartheid and creating such a comprehensive grassroots campaign will remain a burden that the Palestinian leadership must carry. It is not enough to have a just cause; you must also have a realistic strategy and campaigns that serve that strategy. Given the unrelenting Israeli campaign against Palestinians, we cannot let a lack of such a strategy be an excuse for U.S. companies to continue breaking U.S. law or for international venues to be intimidated to delay overdue justice.

Corporate boardrooms in America and around the world are positioned to contribute to ending Israel’s occupation. Not only is it part of their moral and legal obligation to do so, in the end it will make good business sense.

Sam Bahour is a Palestinian-American businessman living in the besieged Palestinian City of Al-Bireh/Ramallah in the West Bank and can be reached at

Sam Bahour is a Palestinian-American business consultant and frequent independent political commentator from Ramallah/Al-Bireh in Occupied Palestine. He blogs at @SamBahour