David J. Hoffa, YRF Vice President, was interviewed in June by Israeli journalist Daphna Maor while in Israel for the IDC Herzliya Conference. Hoffa spoke on a panel, Israel's Legal Warfare in the International Arena, which discussed how decisions of large institutional investors (especially unions) are effected by the BDS movement.
In the article published in Hebrew in The Marker, the financial supplement of the popular Israeli daily national newspaper Ha'aretz, Hoffa says he opposes the BDS and "claims that the boycott perpetuates hatred." He added that the movement has not had a significant impact on investment decisions.
Read the English translation here:
The Marker (translation)
By: Dafna Maor
July 6, 2016
“People believe Trump and Sanders because they don’t accept donations from the large financial institutions.”
David Hoffa, a lawyer who secures compensation for shareholders of corporations who commit fraud and an avid supporter of Israel, believes the shake-up of American politics will be good for Americans. As an active member of The Rabin Foundation and opposer of the BDS movement, he claims that, “the boycott is the perpetuation of hatred.”
What is the relationship between American trade unions and the boycott movement against Israel? What does a lawyer who extricates shareholders’ money from fraudulent corporations have in common with Donald Trump?
David Hoffa, a lawyer and son to a dynasty of American trade union leaders, is the one person who can answer these questions. Hoffa serves as Vice President of The Yitzhak Rabin Foundation – an American non-profit organization dedicated to perpetuating the values, vision and legacy of the late Israeli prime minister through its support of programs that reflect Rabin’s belief in Israel’s democratic values, existence, security, peace and reconciliation with her neighbors. Hoffa is the son of James Hoffa the President of the Teamsters, an American trade union, and grandson to Jimmy Hoffa, President of the same union and one of the most famous American political figures of the 1960’s. Hoffa is Of-Counsel to the law firm Robbins Geller Rudman & Dowd LLP which specializes in class action lawsuits on behalf of investors in fraud cases.
Hoffa came to Israel in June as a participant of the Herzliya Conference on a panel addressing opposition to the BDS movement and international legal challenges. It was his second visit to Israel this year. He has visited Israel many times before as a guest of The Rabin Foundation, a businessman, and as an individual for whom Israel is close to his heart. [At the Herzliya Conference] He was also filling in for J. David Cox, President of the American Federation of Government Employees, a large labor union.
Hoffa shared that supporters of The Yitzhak Rabin Foundation in the U.S. are trade unions, politicians and business people. However, his relationship with Israel began in great part with the American labor movement and his first trip with his father in 2008. “My entire family came. We took part in a dinner honoring my father at which President Bill Clinton spoke, my father was honored, and we raised a lot of money.” Today Hoffa is active in the fight against BDS, the boycott movement against Israel.
Hoffa’s interest in Israel began ideologically, after which he understood there could also be a professional opportunity in the country he holds dear. “We met with a lot of people and I realized we could also do business, even though it was not my original intent. I am now involved in business development in Israel. We represent institutional investors, such as pension funds, insurance companies and banks, in claims of securities fraud in the U.S. Just as was the case with Enron, we help them recoup money from disastrous losses. Over the past four to five years, Israel has increased investing in the American market. While most of the companies invested in have reputable names, some have problems. We help Israeli investors recover their money. Our law firm is the largest in class-action securities lawsuits.”
“Freedom of Speech Protects Trump”
One of the specialties of Robbins Geller Rudman & Dowd is not just the lawsuits themselves, it’s also the filing of settlement claims, a process that is not always easy for Israeli investors. “We recover not just for our own settlements but we help institutional investor clients file US class action securities claims regardless of whether we prosecuted the case or not.”
The firm is suing the presidential candidate Donald Trump on fraud committed at Trump University. The colorful billionaire took to the stage to attack the judge, an American of Hispanic descent, in a manner that brought about even the conservative Republican Party to express harsh reservations of his blunt racism. Hoffa does not believe this will harm Trump’s defense. “I don’t know if it will affect the lawsuit itself, which was filed in 2010. The judge, who is of Hispanic descent, was born in Indiana and I have no idea how that is even relevant to the claim.”
Do you think such incitement by politicians endangers America’s democracy?
Hoffa: “No. It is his right to criticize the court, his opponent, or us. Freedom of speech protects him. In any case, we’re talking about a lawsuit that was filed six years ago, even before Barak Obama ran for president the second time. The legal system in the U.S. is experienced enough and large enough to withstand such things. I don’t think people will target judges. It is permissible to file a suit and say that the judge is biased.”
You don’t think today’s prevailing political correctness harms freedom of speech?
There is a trend that encourages political correctness. In universities, companies and governments – they want everyone to play nice, not to speak this way or the other at universities or work. But in reality, there is more freedom of speech than ever before, including in social media. The problem is people don’t like it when they’re not able to control it. Every tweet spreads around the world; it scares people. I agree with you --there is a bias towards political correctness – it’s discouraged to say anything bad about anyone. This is because universities, for example, don’t want to be identified with such things. Companies are only interested in selling and maintaining neutrality.”
The fact that we hear such statements, says Hoffa, demonstrates that there is more democracy and freedom of speech than ever before. “No one would hear about things happening in a small country that doesn’t have freedom of the press.”
Your firm asked to publicize a video of Trump giving an affidavit. Do you think the video damages him?
“I haven’t seen the video, but it certainly would not look good. No one wants personal matters made public. He was sued for establishing a phony university. People paid money and didn’t receive what was promised to them.”
Trump’s rival for presidency, Hillary Clinton, is being attacked for her connection to Wall Street and corporations. On the other hand, as Obama says, she is the most experienced and skilled candidate we’ve had in a long time. How does this balance out in your opinion?
“She is very skilled in foreign policy. She was a U.S. Senator. She was a First Lady. She is extremely smart and very talented.”
Unfortunately, added Hoffa in a less conciliatory tone, the Supreme Court decision with regard to Citizens United which allows unlimited contributions from business sources, creates a difficult problem in American politics. “They can give donations and flood the elections with money, and it’s a problem. They are influential through their television advertisements, it is very troubling.”
What also concerns Hoffa is Clinton’s return from civilian life. “The fact that she worked at The Clinton Foundation after she left politics, and then returned: who knew she would return to politics after she received donations for speaking engagements? Not that it isn’t legitimate.”
“The penalties the banks received are pennies”
The question, says Hoffa, is whether Clinton knows how to draw a line between her private business and her public role. “Whether she can be professional? A lot of politicians in the U.S. are close to bank and insurance executives. Sometimes there is a conflict of interest and we have to ask ourselves whether we trust the individual to distinguish between interests: Does her loyalty to the heads of Goldman Sachs mean that as President she will act favorably toward them? Trying to return to politics after you were paid for speeches creates image problems.”
The Clinton Foundation does wonderful things, however the money comes from somewhere. But that’s reality. Bernie Sanders had an important point: How do you receive money from someone and later make a decision regarding them. I don’t know the answer, but in my opinion she is professional enough to make the distinction.”
Eight years after the financial crisis, the banks paid billions of dollars in penalties and settlements, but the system hasn’t changed. Jaime Dimon, CEO of JP Morgan Chase Bank, is king of Wall Street and his bank is larger than ever. There is no significant difference in the way in which they do business and the influence the banks have. Do you think this will change and does your role as a lawyer play a part in this?
“The banks were saved by the government. They survived. Meanwhile, many people who worked or invested in the banks suffered. Not a single executive served in prison, aside from the junior levels. Those who contributed to the crisis went unpunished. The penalties were pennies for the banks – a billion dollars in order to settle something forever and leave you in peace.”
“Not all the cases we deal with are filed against banks, but all of them are against scams, manipulations and becoming rich at the expense of others. When there is a settlement between the stock exchange and the banks, the money is divided between compensation to the victims with part returned to the government. We do something else: we try to return the money to the shareholders. They are the owners of these companies.”
“CEO’s are salaried employees whose roles are to manage the companies. The board’s role is oversight, but they don’t really do that in reality. Everything is connected to the boards. Sometimes there is a revolving door between the board and the management. They don’t want to change it, there is opacity. They do not always work in the interest of the shareholders.”
“We file lawsuits that deal with corporate management. If a corporation is managed properly, corruption does not exist and problems are disclosed when they arise, hence there are no surprises and no collapse of a house of cards. The purpose of our lawsuits is to deter companies from doing so, but they continue nonetheless.” For most shareholders, says Hoffa, there is no time to read emails about their stock portfolio or pension plans and submit to the board’s recommendations. “If you have a mutual fund, it selects for you. The fund manager’s interests are not necessarily aligned with yours. This is not to say there is no activism on the part of shareholders. Unions in the United States are concerned about human rights, limiting executive pay, quality of working conditions and limiting employers from firing workers. The unions are very good at this (activism). The Teamsters – of which my father is and grandfather was President - manages $100 billion in investments in its pension plans. That's a lot of money for which they can vote and have influence."
Do you think the rise of politicians from outside the establishment, such as Sanders and Trump, is a direct result of the crisis?
"It's a huge change. If you look at Sanders on the one hand and Trump the other, they are bringing in new voters that were not a part of the political system in the past. They bring new people into the arena. I think it's a good thing. It shakes up the approach of 'business as usual,' and fundraising. They shook up the establishment, both of them, and they reached a lot of voters."
"Something went wrong in both parties if candidates that have no real chance were able to connect as they did with new voters. The Sanders' gatherings were amazing. People came and contributed $20 - that's the average, because they want change. The politicians have lost their connection to the ordinary person. It is a signal to everyone of the need to connect. People do not trust the usual (establishment) politicians. Experienced people like Clinton are confronted with running against someone with no experience like Trump."
"It relates to what I said about political correctness - people trust Sanders because he says what he thinks. They believe him. He does not get money from the banks for speaking, while Trump is a celebrity - he does not get money from the banks and he too says what he thinks. It will create a mess, but it's a good thing."
"The State came out against the workers"
You are the son in a dynasty of union leaders. However, the U.S. working class is under a legislative attack at the state level, the rate of union membership has plummeted in recent decades. Is the influence [of the unions] disappearing in the U.S.?
"I'm not involved in the field, but the Teamsters are very active. The numbers of members in unions is going down. The reasons behind this are that there are not as much traditional, unincorporated jobs. I am in favor of free trade, but trade agreements need to be fair - not just for corporations."
"The NAFTA agreement (the free trade agreement between the U.S., Canada and Mexico) was a very controversial change. The agreement was great for Mexico, U.S. corporations and perhaps Canada. But in our view, it did not help America, or American workers. You can buy a cheap television, but there were no jobs created. People are working two jobs instead of one but can’t earn a living. They are not organized, so they do not have health benefits, pensions or job security. As industry declined, it moved to southern areas in the United States and abroad where there are fewer unions. American corporations manufacture abroad and import back to the U.S., and as a result, we close factories in the U.S. It's also hard to unionize people at McDonald's or gas station employees, who work for minimum wage."
"The new trade agreements - TTIP (Trans-Atlantic) and TPP (Trans-Pacific) - were carried out on a fast track, asking Congress to vote within two days, without including clauses for the protection of workers. No one is privy to what is in the agreements, and you cannot change anything. For example, there is no ban on child labor or compensation for employees injured on the job."
"The 'Right to Work' movement of the Republicans (which protects freedom of employment and opposes the right to collective bargaining) operates just so that people earn less. This legislation passed overnight in Michigan without any discussion - and this is the industry capital of the American unions. Suddenly the country went against the workers. It's as if they are assuring that nobody earns enough."
You came here to talk about BDS. You are active in the world against the movement. How effective is the struggle against BDS?
"In the U.S. we were able to change the trend in which some municipal and union pension funds were divesting investments in Israeli companies or providers to Israel. In some cases, it was excessive as with the boycotting Caterpillar which provides equipment used in house demolitions in the Occupied Territories. From a selfish, American point of view, the boycott harms American workers. Is this the best way to change the policy of another country?"
"People have a right to their opinion, but the role of pension funds is to provide returns for pensioners, and not to deal with such matters --in my opinion, the boycott is just the opposite involvement – it’s isolation perpetuating hatred. The legacy of Rabin, as a person who was born here and was a co-founder of the State and Commander in Chief, is the understanding that the future does not lie in a military victory. One needs to talk with the people you dislike. BDS is exactly the opposite - the opposite of peace, detachment and turning one's back."
Hoffa recounts how senior Teamsters convinced large unions, including the UAW (United Automobile Workers), not to support the boycott. "It's evil; it's the opposite of peace. Just imagine if someone would do it to Saudi Arabia and its oil."
"I live in Michigan and in Detroit there is a large population from the Middle East. People are there for the same reasons people always come to the United States - to live as free people, to establish a business, and to educate their children in a safe environment. There are many Iraqi Muslims, Christians, Lebanese, people from everywhere, from Syria and Yemen. In meeting with these people daily, the hostility disappears."