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San José council rejects broad divestment push, directs staff to refine investment policy
Summary
After hours of public comment on a proposed ethical-investment memo from Councilmembers Ortiz and Kamei, the City Council voted down the Ortiz/Kamei measure and instead adopted a staff-recommended update with direction to return with further analysis and guidance.
SAN JOSÉ — The San José City Council on Wednesday rejected a proposal to broaden municipal disinvestment from companies with ties to immigration enforcement and instead approved a staff-recommended update to the city’s investment policy, directing city staff to return with more detailed analysis of options and fiscal impacts.
The dispute centered on a memorandum drafted by Councilmembers Peter Ortiz and Rosemary Kamei that would have prohibited new city investments in firms the memo linked, directly or indirectly, to U.S. Immigration and Customs Enforcement (ICE), such as Alphabet, Microsoft and Amazon. Dozens of public commenters filled the council chamber — many urging action on ethical investment, while others warned that divestment would worsen a city budget shortfall.
“Hoy tenemos la oportunidad de hacer historia una vez más,” Councilmember Peter Ortiz said, describing the memo as a way for San José to “defend our immigrant community” without immediately selling existing holdings. “No estamos instando a desinvertir en Israel ni a involucrarnos con países extranjeros… Esencialmente es una tercera opción.”
Supporters told the council the measure would align city finances with local sanctuary-city values. “San José is a sanctuary city — we should not profit from companies that facilitate deportations,” said public commenter Joan Simon. Several speakers cited staff estimates that affected holdings represent a meaningful share of the portfolio and urged the council to act on principle.
Opponents leaned on senior finance staff analysis and budget warnings. Finance Director Maria Oberg and Budget Director Jim Shannon told the council that removing corporate bonds or otherwise constraining the corporate-bond program could reduce investment income by an estimated $3 million to $5 million annually and, depending on scenarios, more over time. “These are prudential, fiduciary decisions,” a staff presentation said.
Councilmembers debated legal, administrative and fiscal trade-offs for hours. Councilmember Tim Casey cautioned the council against adopting a rule without objective definitions and a manageable administrative framework: “This memorandum never defines what counts as a ‘link,’ whether indirect relationships count, or what standard of evidence we would use,” Casey said.
After debate, the Ortiz/Kamei proposal failed to secure a majority. Council then adopted a substitute motion — accepting the staff recommendation to update the investment-policy list of authorized dealers and instructing staff to return with additional analysis on how other municipalities have approached similar decisions and to propose workable implementation details. The substitute passed unanimously (8–0).
What the council approved was not an immediate sale of holdings. Under the approved direction, existing investments in the named companies would be allowed to ‘‘mature’’ and not be newly purchased, while staff studies implementation pathways, fiscal impacts by fund, and administrative feasibility; staff also agreed to provide comparative information from peer cities.
Mayor Matt Mahan and several members stressed both values and constraints: they affirmed the city’s commitment to immigrant protections while citing the council’s fiduciary responsibilities and the technical difficulty of tracking corporate structures, subsidiaries and securities on the secondary market.
Next steps: staff will return to the council with the requested analysis and any recommended policy language or operational procedures. The council’s action closes the immediate effort to adopt the Ortiz/Kamei memorandum as written, while opening a directed staff process to study options further.
Council vote: Ortiz/Kamei memorandum — failed (4–4); substitute motion to accept staff recommendation with additional analysis — passed (8–0).
The meeting record shows extensive public comment both for and against the memo; the full staff report and the supplemental memo referenced by councilmembers will be posted to the City Clerk’s docket for public review.
