Regents Approve Divestment
Board votes unanimously to pull investments from nine companies supporting Sudan.
Published: Friday, March 17, 2006
This article was first published in the online edition of the Daily Bruin.
By Nancy Su, Daily Bruin reporter
The University of California became the first major public university system to vote to divest from companies with financial holdings in Sudan in a unanimous decision by the UC Board of Regents on Thursday.
The university decided to withdraw its investments from nine companies that a board-appointed study group found to most significantly support the Sudanese government and provide the least benefits for the people of the country.
Inside the meeting, about 100 students in green Sudan-divestment T-shirts stood with linked arms and bated breath as each regent said yes to divestment.
After the vote, some regents stood and applauded the students as the audience cheered.
About another 100 students who were rallying outside the meeting danced in celebration when they were notified of the vote. Some eagerly called their friends to pass on the news. Many had been working toward divestment for over two years.
Hailed by regents and legislators as a student-initiated issue, the fight for UC divestment began with students who were concerned with the university's investments in companies that do business in Sudan.
Thousands of people in Darfur have died at the hands of Sudanese government-sponsored forces, in a series of events that the U.S. Congress has declared a genocide.
"The University of California has taken a principled stand against the tragedy in Sudan by severing its financial connections from those nine companies who aid the genocide and by lending its voice to those calling for peace in the region," said board Chairman Gerald Parsky.
Before the vote, some regents expressed support for the students' cause. During the meeting, none of the regents commented negatively on divestment.
Student Regent Adam Rosenthal, who first brought the issue to the board, called the vote historic and said the UC is sending a clear message to the government, other universities and Sudan that the UC will not stand by while people are dying.
State Assemblyman Paul Koretz addressed the board before the vote, saying UC divestment could set an example for other public institutions, citing public pension programs as one area where the state of California could divest.
"If the UC regents take this step today, I have very little doubt that other public pensions programs in California will follow suit," Koretz said.
Large-scale divestment plans could then put economic pressure on the Sudanese government to stop the killings in Darfur, he said.
There has been some concern since the UC took up the proposal for divestment that withdrawing assets from Sudan could have a negative financial impact on the university.
But the regents said they plan to seek action from the state legislature to mitigate these potential effects by releasing the university from any financial costs and claims arising from the decision to divest.
Divestment of all shares held in the companies must be completed within an 18-month period once the indemnification legislation is enacted.
Though the exact dollar amount involved will not be known until divestment is completed, UC Vice President for Business and Finance Joe Mullinix said divestment is not expected to significantly impact the UC's overall portfolio.
Disclosing some of what was discussed at the closed compensation meetings Wednesday, the board also addressed the recent compensation controversies the university has faced.
Parsky said the regents and the UC's president will immediately begin a process to reorganize the UC Office of the President, which has been the target of much of the recent blame for the university's compensation policy lapses and lack of transparency.
He said the board will assess how to best organize and staff UCOP to straighten business practices and management of the university to better complement the university's academic excellence.
The board will consider creating positions for a chief operating officer or administrative officer, as well as a chief financial officer with responsibility for non-academic functions within UCOP.
An independent compliance officer position could also be created to provide the regents with sufficient oversight. The compliance officer would report directly to the regents and be responsible for ensuring compliance with university policies and practices.