Illinois Lawmakers Push to Repeal 2015 Anti-BDS Pension Investment Law Amid Free Speech Debate

House Bill 2723 Seeks to Allow State Pension Funds to Invest in Companies Boycotting Israel

SPRINGFIELD — A growing number of Illinois state lawmakers are moving to repeal a 2015 law penalizing companies that boycott Israel, sparking a debate about free speech versus pension investment restrictions.

House Bill 2723, introduced by state Rep. Abdelnasser Rashid, D-Bridgeview, would strike language related to Israel from current law guiding state pension investments. The bill has 22 co-sponsors in the House and Senate, though some names were later removed.

First State to Enact Anti-Boycott Legislation

Illinois' 2015 law prohibits state pension funds from investing in companies engaging in the Boycott, Divest, Sanction, or BDS, movement against Israel, making Illinois the first U.S. state to enact such legislation. The measure was signed into law by Gov. Bruce Rauner, a Republican, and was modeled after similar post-9/11 measures restricting Illinois' pension funds from investment in companies that engage in business with the governments of Iran and Sudan.

When boycotting Israel became grounds for blacklisting, Illinois lawmakers established the Illinois Investment Policy Board, tasked with investigating companies' investment choices. Opponents of the laws have warned they curtail free speech. Israel is the only country for which boycotting is penalized in Illinois by the board.

Thirty Companies Currently on Prohibited List

Thirty companies are currently on the Illinois Investment Policy Board's prohibited entity list for boycotting Israel. In 2021, Unilever was added to that list after its subsidiary — ice cream company Ben & Jerry's — announced it would stop selling its products in the Occupied Palestinian Territory, as defined by the United Nations. While remaining a supporter of Israel, the company said it did not support "an internationally recognised illegal occupation."

Chicago-based investment firm Morningstar narrowly avoided state divestment in 2022, when the Illinois Investment Policy Board accused the firm's subsidiary, Sustainalytics, of having an anti-Israel bias. The company then commissioned an independent report that found evidence of anti-Israel bias in Morningstar's standalone product, Human Rights Radar. Morningstar agreed to accept a series of recommendations, including discontinuing the Human Rights Radar and no longer taking input from the United Nations Human Rights Council, in order to avoid state divestment.

Free Speech Arguments

"This is about the right for people to advocate for what they believe — in this particular case, for human rights advocacy — without the state telling you what you have to believe and how you have to act," said Rashid, the first Palestinian-American to serve in the Illinois House of Representatives. "It is a matter of making sure Illinois is on the right side of history — not participating in the oppression of the Palestinian people – but it is also about making sure the Illinoisans and companies that do business in Illinois are not being forced and bullied and retaliated against because they chose to stand for human rights."

Political Costs of Supporting the Bill

While President Trump-supporting Republicans and right-wing activists rail against a bipartisan national bill that would toughen penalties for boycotting Israel's government, Illinois' Democratic supermajority legislature appears hesitant to put an end to its 2015 anti-boycott law, which passed unanimously in both houses.

Rashid's and Porfirio's bills have stalled in committee despite the initial support from about one-fifth of the Democratic caucus, including the leaders of the Latino, Black and Progressive caucuses. Sen. Napoleon Harris, D-Harvey, was listed as a cosponsor on March 20, and Sen. Adriane Johnson, D-Buffalo Grove, signed onto the bill on April 2, but both had their names removed on April 8.

"Even though it had quite an impressive list of sponsors and cosponsors, it's a controversial piece of legislation that is likely to engender a lot of debate that most legislators don't want to vote on, because they either have Jewish or Palestinian constituents, or both," said Dick Simpson, a professor emeritus at the University of Illinois at Chicago and former Chicago alderman.

Activists Hope for Change

Deanna Othman, member of the Chicago chapter of American Muslims for Palestine, said HB 2723 is urgent, citing both a humanitarian crisis and a crisis of free speech.

"Unfortunately, it's more relevant now than ever, because we've seen all of the crackdown on student protesters and people who engage in boycott and people who are just voicing their First Amendment rights," Othman said. "If I cannot stand up for the rights of my fellow Palestinians, whose rights can I stand up for?"

Public Opinion Shifts

About 53% of Americans express an unfavorable opinion of Israel, according to a Pew Research Center study conducted last month. This is an increase from March 2022, when that figure was 42%.

The survey found the share of Americans with little or no trust in Israeli Prime Minister Benjamin Netanyahu to "do the right thing for global affairs" increased significantly from 2023 to 2024.

Pro-Israel Organizations Oppose Repeal

The pro-Israel, pro-peace advocacy group J Street does not oppose boycott initiatives "that explicitly support a two-state solution and recognize Israel's right to exist," according to a statement of its policies. "It is critical to maintain the distinction between boycott efforts that work against the interests of Israel, and initiatives which are limited to opposing the occupation."

But J Street does oppose the broader Global BDS Movement, which advocates for three tenets: That Israel should stop policing the border on and occupying legally Palestinian land, that Arab-Palestinian citizens of Israel should have full equality with Jewish citizens and that Palestinians be allowed to return to their homes, as stipulated in UN Resolution 194.

What's Next

The bill remains in committee and its fate is uncertain. Activists say they are hopeful a repeal of the anti-BDS law will pass in 2026 if it continues to stall this year. But it remains an uphill battle, even as they point to a steady decrease in American popular support for Israel.