SAN JOSE OFFICIALS are weighing growing calls to divest the city from companies that critics say don’t align with local values.
The City Council is set to take up the controversial divestment conversation March 24 during an annual review of the city’s investment policy. A group of local advocates has long been urging the city to cut financial ties with companies engaged in a broad range of business activities — including those doing business with federal immigration enforcement agencies, militaries such as Israel’s, as well as businesses involved in “mass incarceration and detention.”
“Momentum is definitely on our side,” Drusie Kazanova, co-founder of the group San Jose Against War who has been leading divestment organizing, told San José Spotlight. “There’s a mass movement in resistance to the Trump administration and their attacks, both domestically and abroad.”
Kazanova said local organizers initially launched the divestment effort in response to Israel’s conduct during the Israel-Hamas war. Over the past two years, however, their demands — advanced through rallies, a letter-writing campaign and an online petition — have expanded to include other corporate practices as well.
Even as the momentum grows, some councilmembers have voiced skepticism about the divestment calls, amid concerns such a policy could undermine the city’s financial standing at a moment when its budget is already under considerable strain. In a March 2 message to residents, Mayor Matt Mahan said the city is looking at a $56 million shortfall.
The divestment conversation got a boost from District 5 Councilmember Peter Ortiz in October, when councilmembers approved his proposal directing staff to study the potential consequences of withdrawing the city’s investments from all companies that do business with U.S. Immigration and Customs Enforcement (ICE).
Conflicting allegiances
The review identified just one company, Microsoft, in San Jose’s investment portfolio that holds a contract with ICE. The computer software giant was awarded a $600,000 contract with the federal agency in 2025, according to a city memo. The city holds more than $8 million in the company’s bonds.
In his memo urging the review, Ortiz cited President Donald Trump’s immigration crackdown, as well as San Jose’s past efforts supporting immigrants. Ortiz was not available for comment.
“Divesting from corporations tied to ICE builds on that legacy and reaffirms the City’s commitment to safeguarding the safety and dignity of all residents, regardless of national origin or immigration status,” Ortiz wrote.
Ortiz’s memo did not address advocates’ calls for divestment from companies with ties to prisons or the defense sector.
“Divesting from corporations tied to ICE builds on that legacy and reaffirms the City’s commitment to safeguarding the safety and dignity of all residents, regardless of national origin or immigration status.”
Councilmember Peter Ortiz
San Jose’s $2.5 billion investments cover a variety of accounts, such as the city’s retirement funds and a number of funds used for housing efforts, according to a recent financial report. Corporate investments make up 22% of the portfolio.
It’s not clear what sorts of divestment proposals councilmembers might consider at their upcoming meeting, or whether any policy vote will take place. The issue became a flashpoint during the Feb. 19 meeting of the city’s Public Safety, Finance and Strategic Support Committee.
After reviewing the existing report on divestment impacts, District 1 Councilmember Rosemary Kamei proposed that staff analyze additional strategies to divest the city’s funds from companies with ties to ICE.
“Given that the community wants to know, I think we should fully know what it means for our general fund,” Kamei said during the meeting. “I think our public dollars do reflect our values.”
Divestment could come at a cost
But her proposal at first received pushback from District 10 Councilmember George Casey, who voiced skepticism about considering far-flung policy matters to determine the city’s investment strategy.
“I just think it’s a separate conversation entirely from this process, whether or not we are going to embark on these types of decisions and conversations,” he said.
The staff report also warned divestment could harm San Jose’s financial standing by reducing the diversity of its investment portfolio and forcing it to buy and sell assets at unfavorable terms. Advocates contend such concerns are overblown.
Ultimately, Casey joined the unanimous committee vote to advance the package to the full City Council.
The annual investment review had originally been set to go before council March 10, but the item has been delayed as staff prepares a “supplemental memorandum,” a spokesperson for the City Manager’s Office told San José Spotlight. The spokesperson declined to provide further details.
Meanwhile, residents supporting divestment said their expectations remain high.
“The absolute bare minimum is that the San Jose City Council make ethical investments in our local community and not financially support Israel and the genocide and horrific murder of the Palestinian people that the world has bared witnessed to,” resident Elizabeth Agramont-Justiniano told San José Spotlight.
Contact Keith Menconi at keith@sanjosespotlight.com or @KeithMenconi on X.
This story originally appeared in San Jose Spotlight.