City Committee Meeting Draws Packed Crowd, Email Flood Over Ethical-Investment Debate Tied to Israel-Gaza Conflict

A Pasadena City Council committee meeting on city investment policy drew sharply divided public comment Thursday night as dozens of speakers argued over whether the city should adopt stricter ethical-investment rules connected to the conflict in Israel and Gaza. The city clerk’s office reported receiving about 2,500 emails opposing a divestment resolution and roughly 250 to 300 emails supporting an ethical investment policy after the agenda was posted.

The debate unfolded during a special meeting of the Legislative Policy Committee of the Pasadena City Council, with Vice Mayor Jess Rivas and Councilmember Gene Masuda attending in person and Councilmember Steve Madison participating remotely.

The three-member committee considered a controversial agenda item titled “Investment policy discussion regarding ethical, environmental, social, and governance considerations.”

Before public comment began, a representative of the city clerk’s office told the committee that 41 speaker cards had been submitted on the investment-policy item and that the email correspondence had been distributed to the committee, posted online and made part of the public record.

Committee Chair Steve Madison asked speakers to keep their remarks to about one minute and requested that speakers form a line behind the lectern to keep the meeting moving.

Staff outlines limits of city investment authority

Assistant City Manager Matthew Hawkesworth told the committee that the city staff report was intended to explain Pasadena’s existing investment policy, outline how other local governments approach socially responsible investing, and summarize relevant legal considerations.

Hawkesworth said the city’s investment authority is limited under state law, explaining that Pasadena generally cannot invest in equities or stocks and is restricted to certain highly rated investment vehicles, including top-tier corporate bonds.

The city’s written investment policy for Fiscal Year 2025–26 states that investments may consider environmental, social and governance factors alongside traditional financial measures, including human rights and ethical considerations. The policy also specifies that the city shall not invest in common stock and is governed by California Government Code provisions regulating municipal investments.

Hawkesworth told the committee that the city’s pooled investment fund does not include investments in Israeli companies, but noted that Pasadena has expenditure contracts with companies that conduct business in Israel. He cited Motorola as one example raised by members of the public.

Public comments reflect sharply opposing views

Public comment revealed deep divisions over whether Pasadena should take any action related to investments or contracts connected to companies cited by divestment advocates.

Former Mayor Terry Tornek, whom Madison said he would call first as a point of privilege, urged the committee to avoid making determinations about contested international claims.

“Being asked to choose sides in a very complicated, emotional, international struggle where every fact is disputed,” Tornek said. “I don’t think the City Council should attempt to be the arbiter of this dispute.”

As Tornek spoke some audience members erupted. Madison interrupted him to call for order and respect from the audience, reminding attendees to allow speakers to be heard.

In contrast, Iris Chen, who identified herself as a Pasadena resident, argued that the city’s financial decisions should reflect community values.

“As taxpaying citizens, we say not in our name and not with our money,” Chen said. “I want my tax dollars and our city’s investments to reflect our values.”

Other speakers echoed those opposing perspectives, with some urging the city to adopt ethical-investment standards that include divestment, while others argued Pasadena should focus on local governance and avoid taking positions on international conflicts through its investment policies.

Legal risks and contracting concerns raised

Hawkesworth also warned committee members of potential legal implications if Pasadena pursued investment or contracting policies perceived as discriminatory.

He cited California Public Contracting Code Section 2010, amended in 2017 by Assembly Bill 2844, which prohibits certain discriminatory actions against individuals or entities under the pretext of a boycott of Israel. Hawkesworth said staff could not predict specific outcomes but cautioned that there was a risk such actions could jeopardize state contracts or grant funding.

Madison said the committee’s task was not to adjudicate the underlying conflict, but to examine whether the city could or should take any action within its legal and financial authority.

Committee members weigh next steps

After public comment concluded, Masuda said he did not support forwarding a divestment resolution to the full City Council and noted that the city does not control investment decisions made by the Pasadena Fire and Police Retirement System, which have been a focus of the local divestment movement.

Rivas thanked speakers and suggested a broader policy discussion that would not be limited to a single conflict. She proposed that the city consider expanding its environmental, social and governance framework to address investments in weapons manufacturers and fossil fuel companies, an approach she said could apply regardless of geopolitical circumstances.

Madison said he would support further discussion by the full City Council but expressed concern about adopting policies based on disputed claims and warned that city action could be misinterpreted in ways that inflame community tensions.