UC drops investments in response to activists’ gripes

University of CaliforniaFor the second time in three months, University of California pension administrators have ended their investments in specific industries after receiving complaints from student activists, spurring criticism that investments should be focused on returns — not on making political or social statements.

The Los Angeles Times broke the story this week of how UC pension officials had sold $30 million in holdings in companies that run private prisons. Such companies are criticized by activists who believe they are unaccountable and that the U.S. criminal-justice system is much too quick to consign young offenders to prisons for long periods, making it highly unlikely they will lead productive lives. The UC decision was both applauded and criticized, per the Times:

“By selling their shares they’re sending a message … that the UC system is against human rights abuses,” said Kamilah Moore, who graduated from UCLA in 2014 and is a field organizer for the Afrikan Black Coalition, a student advocacy group. …

 

Xavier Harris, who graduated this month from UC Merced, where he was a member of the black student union, said he was encouraged by the move. “It shows [administrators] are listening when we said this is an issue that affects our friends and families,” he said. “They should be in the business of education, not profiting from incarceration.” …

 

Ivo Welch, a finance professor at UCLA’s Anderson School of Management, said that UC administrators may be too sensitive to outside pressure.

 

“If you start going down the list of Fortune 500 companies, I’m sure we can come up with reasons we should divest from each one,” he said. “I’m almost left speechless by how we pamper student whims.”

Previous divestment decision also based on risk

In September, UC sold its $200 million worth of shares in companies in the coal and oil sands extraction business. UC officials had a slightly different tone in describing this divestment, acknowledging student protests but also saying there were legitimate questions about risks. This is from a Reuters report:

Chief Investment Officer Jagdeep Bachher said slowing global demand, an increasingly unfavorable regulatory environment pose insurmountable challenges for coal mining companies.

 

The profitability of companies focused on developing crude from Canadian oil sands has also fallen amid low global oil prices, Bachher said, making those companies increasingly risky investments.

But the next divestment target of student activists — Israeli-owned businesses or corporations that do considerable business with Israel — seems likely to be vastly more difficult to achieve. Such a politically fraught decision would be made by UC regents, not by staff. And the man generally considered the most influential regent — billionaire financier Richard Blum, husband of Sen. Dianne Feinstein — is an intense critic of the BDS (Boycott Divestment Sanction) movement that seeks to punish Israel for its treatment of Palestinians.

In 2013, he abstained from joining an otherwise-unanimous vote to approve the selection of Sadia Saifuddin as a student representative on the regents board in 2014-15. Saifuddin was a leader of the BDS movement at UC Berkeley and belonged to campus groups that the Simon Wiesenthal Center said were explicitly anti-Semitic.

More recently, Blum has fought for a tough UC speech code protecting Jewish students from what he depicts as steadily escalating intimidation and bullying from UC students associated with the BDS movement and other anti-Israeli groups. This led Los Angeles journalist Conor Friedersdorf to write a piece for The Atlantic about free speech on campus that compared Blum with students at UCLA who seek to regulate and punish other students for being insensitive to or insufficiently concerned about minorities.

3 comments

Write a comment
  1. Flowing Waters
    Flowing Waters 31 December, 2015, 11:35

    Boycott & Divestment movements work on many levels. We as individuals vote with our pocketbooks of course. First, they educate the public and the boards controlling the funds about their active role in evolution of consciousness about our planet. Most people covered by CalPers, other state, federal and teachers’ employment retirement systems, are not aware of the specific corporations supported by their retirement dollars. If they knew e.g. that CalPers has $800 million invested in Nestle, $500 million each in CocaCola and Pepsi, $53 million in Otsuka Pharmaceutical Holdings (Crystal Geyser) when we are in extreme drought, they might write in requesting divestment. We shouldn’t be surprised if legislators, city and county officials, judges and the governor fail to regulate the water privatization and water bottling industry.They are invested in these corporate water extractors. Major university endowment funds like the UC system should be glad their students and members are vigilant. I hope they will also address water as well as coal, oil, fracking industries.

    Reply this comment
  2. Schwartz
    Schwartz 1 January, 2016, 09:01

    Private prisons are more poorly run and have many more human rights violations than their public counterparts. Prisons for private profit is an insane idea, and the implications for more injustice in our already horrible criminal justice system are obvious. How can the ivory tower support this? Just another example of corruption which is now affecting every social institution in America.

    Reply this comment
  3. Just Another Disgruntled Citizen
    Just Another Disgruntled Citizen 1 January, 2016, 11:32

    The arguments brought forth by the student activists and their supporters about the alleged merits or lack of same of various public investments and policies is one thing, their determination to control the debate by bullying their opposition into silence or acceding to their demands in another.
    Let us not confuse the two.
    There ought to be room in this debate for everyone.

    Reply this comment

Write a Comment

Leave a Reply



Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

Related Articles

Chiang releases new cash flow figures

Today state Controller John Chiang updated the state’s official cash balance. For the third month in a row, the state

Governors luring away CA jobs

April 30, 2013 By Brian Calle As Gov. Jerry Brown recently traveled to China to promote trade and search for

Mexicans revolting against telecom monopoly

June 25, 2013 By John Seiler As I’ve written a couple of times on our site, Mexico’s economy now is