October 15, 2010

Investing in evil

The University shouldn’t invest in morally suspect enterprises

Over thirty years ago, opposition in the U.S. to the oppressive, racist government of South Africa under apartheid spurred a nationwide divestment campaign. Institutions ranging from businesses to state governments sold any and all assets connected to that nation’s unjust system. Major colleges and universities played a large role in the divestment movement. Faculty, students, and administrators on hundreds of campuses, including at the University of Chicago, called for their schools to divest. Hundreds of them did. The U of C refused.

In 2007, students on this campus started a campaign for divestment from Sudan in opposition to its genocidal practices in the Darfur region. Again, they did so alongside thousands of other students, politicians, and businesspeople, all of whom agreed that the Sudanese government did not deserve the benefit of their financial or symbolic support. Again, the U of C refused.

Last year, a number of students demanded that the University divest from HEI, a major hotel management company that operates hotels throughout the United States. HEI has a history of violating the rights of its maintenance and housekeeping employees, ranging from denying healthcare benefits to suppressing the organization of unions. Last October, the National Labor Relations Board, a government body designed to protect workers’ rights to organize themselves, issued a formal complaint against HEI, and others followed. It accused the company of threatening and coercing workers involved in union activity. As before, when faced with a call for divestment from an institution with blatantly unacceptable and even illegal practices, the University refused.

Sadly, these examples of reprehensible investment policy are only those that have garnered open opposition. Among the other problematic investments of the University are Allegheny Energy, Arch Coal, Inc., and Omnicare. Allegheny Energy, an electricity company in Pennsylvania, was sued in 2005 by the states of Connecticut, Pennsylvania, New York, and New Jersey for failing to comply with the Clean Air Act by producing sulfur dioxide and nitrogen oxide emissions that far exceeded legal limits. In a 2008 case, healthcare provider Omnicare was accused of pressuring doctors to use Johnson & Johnson products in exchange for illegal kickbacks from that company; Omnicare settled for $98 million. Arch Coal is the U.S.’s second largest mountaintop removal coal mining corporation and was the target of the first Federal Court ruling against strip mining and mountaintop removal, an environmentally devastating mining method.

The frustration around this laundry list of offenses comes not only from the immorality it implies but also the absence of sympathetic voices within the University administration. In response to concerns over investment, the Administration holds up the Kalven Report, a document that intends to protect academic freedom, to justify its behavior. But most of our academic peers (Harvard, Columbia, Stanford, Brown, and the University of Pennsylvania, to name a few) and many multi-national corporations and foundations do not exhibit such coldness to the moral implications of their investment practices. They have made institutional commitments to responsible investing by adopting policies that explicitly detail standards for investment and creating committees to ensure those standards are met. At the mentioned schools, when it became apparent that the universities were supporting the violation of workers’ rights, genocide, or state racism, the administrations did not just reaffirm their right to do what they please on the marketplace but were able and willing to actually change their practices to reflect their principles.

Responsible investment committees at other schools offer a diverse and important voice in investment policy through student, faculty, alumni, and administrative representation. In the hopes that the U of C would accept the logic that universities and their affiliates should not participate in or aid unacceptable business practices, the Students for a Democratic Society chapter at the U of C submitted a proposal to the administration for the establishment of this kind of committee. Such a committee would have the power to review University investments and evaluate them according to some basic guidelines, such as following U.S. law or not violating the “paramount social values” the Kalven Report identifies as exceptions to its mandate of political neutrality. Implementing this kind of policy at the U of C wouldn’t need to be substantively different from its successful implementation in 16 of the top 20 colleges in the U.S. and would be a step toward rectifying the damage the University has caused through decades of irresponsible investment. But, when given this opportunity to make good on its stated principles of social stewardship, to make up for past mistakes, and prevent further ones, the U of C refused once again.

It is unacceptable that the administration has ignored the consequences of its actions and investments for so long. Taking responsibility for its investments is of paramount importance to the University’s future as a legitimate academic institution.

Craig Johnson is a fourth-year in the College majoring in Political Science.