August 2005 Focus List for progressive engagement on the issue of promoting peace, justice, and human rights in Israel and Palestine

Corporations in which stock is owned by PC(USA) entities and whose involvement is substantial and/or strategic in nature as related to the criteria

Caterpillar

Peoria, Ill.

Description: Caterpillar is a large manufacturer of heavy equipment used by the Israeli military and privately-owned companies under contract with Israeli government authorities. The equipment is used for demolition of Palestinian homes, the uprooting of olive trees, construction of roads and infrastructure in the occupied territories for use only by Israeli settlers, and facilitating military incursions by widening roads for the passage of tanks and armored vehicles.

Previous engagement: MRTI has had periodic contact with Caterpillar over the last twenty years on a variety of issues.

Citigroup

New York, N.Y.

Number of shares held by PC(USA) entities (as of 6/30/2005): Pension Trust for retired church workers (Board of Pensions) - 481,322, Presbyterian Church (U.S.A.) Foundation/New Covenant Growth Funds - 304,575

Description: Citigroup is a large international bank cited by the Wall Street Journal on April 20, 2005, for having "moved substantial sums for the same suspected terrorists who used Arab Bank..." This involved transferring funds to Arab Bank from charities based in the United States, Saudi Arabia, Kuwait and elsewhere, later seen to be fronts in part for funneling money to terrorist organizations. Some of these funds ended up as payments to the families of Palestinian suicide bombers.

The bank's defense is that it "has 'industry-leading' controls against money laundering" and follows rigorous procedures throughout its business.

Previous engagement: MRTI has had regular contact with Citigroup over the last twenty years on a variety of issues.

ITT Industries

White Plains, N.Y.

Number of shares held by PC(USA) entities (as of 6/30/2005): Pension Trust for retired church workers (Board of Pensions) - 20,080

Description: ITT Industries is a diversified manufacturer that supplies the Israeli military with communications, electronic and night vision equipment used by its forces in the occupied territories.

Previous engagement: MRTI has had little contact with ITT Industries over the last twenty years.

Motorola

Schaumburg, Ill.

Number of shares held by PC(USA) entities (as of 6/30/2005): Pension Trust for retired church workers (Board of Pensions) - 428,500, Presbyterian Church (U.S.A.) Foundation/New Covenant Growth Funds - 215,900

Description: Motorola is a large electronics and telecommunications company with a wholly-owned subsidiary in Israel that has extensive ties to the Israeli military. For example, it recently won a contract to develop encrypted wireless communications for the military that it uses in the occupied territories. The company also is a majority investor in one of Israel's four cell phone companies. The investment is controversial because the cell phone companies, according to the Oslo Agreement of 1995, must be licensed by the Palestinian Authority to operate in the West Bank and Gaza. This is not followed as the companies place their equipment in Israeli settlements with sufficient capacity to cover every Palestinian community. Without regulation, the companies have undercut prices and threatened the ability of the Palestinian cell phone company to survive. They also take advantage of the Israeli government policy of delaying or prohibiting the importation of modern equipment into Palestine. In addition, such practices evade taxes (estimated at over $40 million) that could help the Palestinian Authority develop its economy, and deprive Palestinian operators of revenue (estimated at over $500 million). The lost taxes and revenue go into the Israeli economy, and probably into the settlements through fees for placing equipment and discounts for cell phone service.

Previous engagement: MRTI has had periodic contact with Motorola over the last twenty years.

United Technologies

Hartford, Conn.

Number of shares held by PC(USA) entities (as of 6/30/2005): Presbyterian Church (U.S.A.) Foundation/New Covenant Growth Funds - 56,000

Description: United Technologies is a large military contractor whose subsidiary has provided helicopters to the Israeli military. They have been used in attacks in the occupied territories against suspected Palestinian terrorists. The company also provides other military hardware.

Previous engagement: United Technologies was previously on the General Assembly's military-related divestment list, but was removed following revisions to the policy a few years ago. MRTI has not had contact with the company.