Alaska governor bans big new contracts with companies that boycott Israel

Gov. Mike Dunleavy issued a far-reaching administrative order on Monday that calls for public agencies to stop doing business with companies that support an economic boycott of Israel.

The order makes Alaska the 38th state to take executive acts or pass legislation against boycotts intended to support Palestinians. Many of those actions are years old, but the ongoing Israel-Hamas war, a conflict that has killed more than 25,000 people since October, has intensified attention on a two-decade-old campaign that urges companies to boycott Israel because of its actions against Palestinians.

Within the order, Dunleavy said that “the State of Alaska stands firmly with Israel” and that “it would be contrary to the public interest to contract with persons or business entities engaged in boycotts that seek to isolate or alienate Israel economically and socially for improper purposes.”

The language of the order closely follows House Bill 2, from Rep. Sarah Vance, R-Homer. Vance’s bill failed in a 20-20 vote of the Alaska House last year after a prior version in the 32nd Legislature failed to advance. Vance said she encouraged the governor both in the 32nd Legislature and after last year’s legislative session to take unilateral action.

“I’m pleased. This is something that I’ve felt was the right thing to do,” she said on Tuesday. “Israel is our ally, and when it comes to exercising the authority of where our state dollars go, I believe it should align with our values.”

An analysis of the order’s fiscal impact was not immediately available from the Dunleavy administration, and Vance said her research didn’t turn up any significant impacts.

“We don’t know if we have any contracts that would be directly impacted, but it’s just standing on principle,” she said.

Some legislators said that without a financial impact, the move is just about signaling.

“I don’t think it’ll have any impact on anything. I think it’s political posturing,” said House Minority Leader Calvin Schrage, I-Anchorage.

The last version of HB 2 exempted the $78 billion Alaska Permanent Fund, but Monday’s order did not list the fund among its exemptions. Other state corporations and some agencies, including the state’s pension funds and the University of Alaska, are specifically exempted.

Deven Mitchell, CEO of the Alaska Permanent Fund Corp., said he and other officials are still analyzing the order’s impact.

The order says that all future state contracts shall include a clause stating that “the support or participation of a boycott of Israel shall be grounds for termination of the contract.”

If there is open bidding for a contract, a bidder “that is determined to support or participate in a boycott of Israel shall be disqualified from that competitive procurement.”

Those conditions don’t apply to contracts worth less than $100,000, contracts with companies that have fewer than 10 employees, and individuals. Last year, officials from state agencies told lawmakers that the state had about 1,400 active contracts worth at least $100,000.

Vance said that in her discussions with Dunleavy, “his preference was that it be passed by the Legislature as law,” Vance said. “But I think he pleasantly surprised us by saying, ‘Hey, we’re going to do this.’”

Schrage said he was disappointed by the way the governor went about the order.

“My initial thought is just that this seems to be another example of the governor attempting to sidestep the Legislature and seems to be part of an increasing and problematic trend this year,” he said.

Vance said that even though the governor has acted, it doesn’t preclude the Legislature from taking action as well because Dunleavy’s move could be reversed by a different governor. Legislative action would be more permanent, she said.

“I sincerely believe in the Bible when it says that those who bless Israel will be blessed,” Vance said. “I want Alaska to be blessed.”