The Swarthmore Ville, 1995 ("Michaels")
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WHY WE CAN NEVER DIVEST AGAIN
The Backlash Against South African Divestment
Jerry Nelson '65 with Walter Pinkus '65
2 June 2015 2500 wds Rev 18Jun15
This sketch draws on original research by Hannah Jones:
The campaigns to get the College to divest from South Africa and to
divest from fossil fuel companies have much in common: long duration,
continued attempts to deflect action from whatever might produce
political power, and to deflect public discussion from moral
considerations or broader issues. There must, however, be one difference: the
old South African campaign produced a resolution from the Board to bar
all future generations from any moral consideration of where to invest
the College's wealth, and today, the climate change campaign must
Not long after South African police opened fire with live ammunition on
a crowd in Sharpeville, killing 69, I had a conversation with a
mid-level CIA officer that was remarkable for the case officer's
adamant insistence that South Africa would pull the world down on
everyone's head rather than accept forced integration of the
races. I entered Swarthmore that summer, knowing there was
something very wrong in South Africa, but it would be years before I
knew that Israel and South Africa jointly developed atomic weapons, or
that an American Vela satellite recorded a nuclear test flash and gamma ray burst off the
South African coast (later denied). I will never know if the
Agency was already tracking all of this in 1960, and my Case Officer
had gotten wind of it.
Evil works in
darkness. Evil's roots twine deeply. We will never know the
evil we prevented by taking a moral stand against South Africa's
Apartheid, and by helping to replace racial hatred with racial tolerance.
STUDENTS ARE ALWAYS FIRST: 1978
students started bringing in speakers on Apartheid in the late 1970s,
and, in 1978, the "Swarthmore Anti-Apartheid Committee" was formed and
the Board of Managers was petitioned for divestment, which was achieved
in twelve years.
ONLY "NICE" COMPANIES
A salami of
small steps and diversionary distinctions began. Today, the Board
offers to make Swarthmore more energy efficient (better HVA/C); then, the
Board offered to place future investments only in nice companies (the Sullivan Principles),
but not to divest.
What is a nice
company? A nice company has "egalitarian employment practices":
no discrimination, no Apartheid, problem solved. Any black South African who beats the political
disenfranchisement, social caste system, wage discrimination, inferior
housing, health care deficiencies, closed university admissions and is
still qualified will be hired by a nice company because nice companies
do not discriminate. Swarthmore's Board promised to invest only
in nice companies.
CAMPUS INVOLVEMENT DID NOT REACH ALUMNI IN 1980
formally became a campus-wide issue with the formation of a joint
Board, Administration, student, and faculty "Advisory Committee on
South Africa" in 1980.
A significant difference today is the involvement of alumni, made possible by the
Internet. This has led to careful control of email lists by the
College. So please sign up with your email at
are largely the source of the endowment to begin with, the endowment is
now the major source of the annual
operating budget. The endowment provided 1/3rd of annual
operating costs less than 20 years ago, and provides between half and
2/3rds of operating costs today. We all want to protect the endowment and donate to it,
even as we ask for shifts.
change, alumni should channel their donations through either or both of
the funds described here:
http://www.nelsonic.org/SwatDivest/TwoPlans.html Give, but make your
gift a vote for change.
THEY HAD INDIVIDUAL STOCKS THEN, TODAY IS DIFFERENT
The Board kept
its word. It was OK to invest in nice companies doing business
with South Africa, but four companies in its portfolio weren't even
nice. The College divested from them between 1978 and 1985.
In those days,
under Thomas McCabe, the College invested in individual stocks.
Today, the college uses eighty financial advisors and money management
firms. Divestment must wait for firms like those to develop
investment strategies and baskets of stocks that do not include the
fossil fuel industry. Such special investment services and
instruments are beginning to appear, and we must be willing to accept
gradualism as the College moves to them. But as of mid-2015, the Board is stone-walling, and
won't even start.
MOVE ANY STUDENT INITIATIVE TO "THE COMMUNITY" AND CO-OPT IT
South Africa (1978) and fossil fuels (2010) were solely student
initiatives. We can be proud of our students for their values,
energy, and contribution to the College and its reputation.
African student initiative was given campus-wide status by the
formation of the "Advisory Committee on South Africa" (1980).
With students now in the minority, the Advisory Committee became a tool
for confining action to the divestment of three "not nice" companies,
and then resuming support of white dominance with all other investments
committee co-opted and neutralized, the students had to form
another. The "Ad Hoc Advisory Committee on Ethics and
Investments" was formed in 1985 (year seven) to set the goal back on
total divestment. The original 1978 "Swarthmore Anti-Apartheid
Committee" remained active, and was joined by an activist "Swarthmore
College Divestment Coalition".
theirs and ours today, had sit-ins prior to Board Meetings, 32 days for
us (19 March to 20 April 2015) and 21 days for them, with Haverford and
Bryn Mawr students as well as faculty participating. Our 2015
sit-in received national press coverage:
Sit-in results were meager.
offered diversions: if you care about climate, you can put all
your new donations into a little green investment fund which the Board
will start with one of its 80 money management firms (no fossil fuel
stocks, promise!), while they put their two billion dollars elsewhere,
and we both agree not to do anything politically effective,
moral, or just. But we got more than the South African
activists. The 1985 Board of Managers announced their offering
was the formation of a new committee! (It was the "Ad Hoc
Committee for Ethical Investment Recommendations".) In response, the
sat in, occupied the President's office, disrupted the next Board
meeting in Dec 1985 and again in March of 1986 (supported by a faculty
Only now (March,
1986) was the Board presented with any deadline for action.
Today, Swarthmore Mountain Justice was quick not only to set up
deadlines which the Board could choose to meet, but to create alternate
channels of alumni investment around those deadlines. ("The Escrow
Fund", explained further here
A STOCK MARKET CRASH
Making it impossible for the Board to hold a meeting seems to work better than sit-ins.
successive meetings disrupted, with at least one faculty member joining
the disrupters, and with demands for deadlines being raised, the Board
cleared their meeting room and came out later in the day (1 March 1986)
with a pledge to divest fully, but, of necessity, in stages. The
stock market crash of October 1987 made the need for prudence and delay
acceptable to all, and indeed ushered in 15 years of sub-standard
performance for the College's endowment, however invested. Thus
it was three more years (1989, year 11) until the Board of Managers
could present its first plan for complete divestment from South Africa,
which they thought could be accomplished in less than a year (by 1990,
year 12). Remember that the first divestments were made between
1978 and 1985 and the stock market crash in 1987 affected all equity
investing. Some statements about "divestment" and "returns" must
be normalized by market performance.
BEING LATE IS EMBARRASSING
Being late on an obvious moral issue is an embarrassment for any institution.
Swarthmore students were among the nation's leaders on South African
divestment, and we can thank our students again for being national
leaders on fossil fuel divestment in 2010, acknowledged in the New York
Times and the Philadelphia Enquirer.
the Board of Managers has thrown away five years of national leadership
on a moral issue which will soon be more obvious and anguishing than
South Africa's injustices.
The United States government delayed even longer on South Africa than our Board of Managers.
and his African National Congress (ANC) remained on the US terrorist
list until 2008, years after his release from prison (1990), Nobel
Peace Prize (1993), and presidency (1994). When ANC members
applied for visas to the USA, they were flagged for questioning and
were required to obtain a waiver to be allowed into our country.
The US Department of State had to issue that waiver.
"This is a
country with which we now have excellent relations, South Africa, but
it's frankly a rather embarrassing matter that I still have to waive in
[issue special waivers to] my own counterpart, the foreign minister of
South Africa, not to mention the great leader Nelson Mandela," said
Secretary of State Condoleezza Rice.
shades into pathetic. In 2002, former ANC chairman Tokyo Sexwale
was denied a visa. In 2007, Barbara Masekela, just off her post here in
Washington as South Africa's ambassador to the United States (2002 to
2006), was denied a visa to visit her ailing cousin and didn't get a
waiver until after the cousin had died.
on Apartheid. We are trying to lead on climate change. We
thank our students of the 1980s and today. The Swarthmore College
Board of Managers belittles the College that it was unable to lead on
Apartheid, and is unable to lead today on climate change and the
degradation of humanity's only habitat. After climate change
has become severe, pervasive and irreversible, after we are left
looking sillier than a nation that called Mandela a terrorist as the
world everywhere hailed him, no one will care what our endowment was.
A POISON PILL
The current divestment movement cannot succeed because divestment is forbidden.
The Board points
repeatedly to its "long-standing" policy to "manage the endowment to
yield the best long term financial results, rather than to pursue other
social objectives". Divestment requests must be rejected, the
Board is following the rules.
This policy was
first put in place in 1991, the year after the program of divesting
Swarthmore's holdings in entities doing business with the Apartheid
regime of South Africa was completed. Given the short time
between the South Africa divestment and formalization of this new
policy, it is hard to call the policy anything but a "poison pill"
reaction saying "we'll NEVER get forced into THAT again!"
As Walter Pinkus
'65 puts it, It is irrelevant to the current situation that you are
following an investment policy that has only been in place for the most
recent twenty-four of the College's 150 years. That policy should
never have been put in place to begin with, because it is a denial of
the values held by the College's founders and their successors, values
confirmed by their prominent actions in almost every major reform
movement in American history, including abolition [of black slavery],
African-American history, Indian rights, women's rights, prison reform,
humane treatment of the mentally ill, and temperance (Friends
Historical Library, Swarthmore College).
the South African divestment campaign and the fossil fuel industry
divestment campaign, and all our alumni who ever worked for either of
them. We are united by the 1991 backlash against South African divestment which now sits as a
roadblock to fossil fuel divestment: "We cannot divest. We must
follow [our own] rules." It is a comforting barrier that steels
the spine of those too spineless to take a moral stand based on
SWARTHMORE'S MISSION STATEMENT SETS A WORTHY GOAL
seeks to help its students realize their full intellectual and personal
potential combined with a deep sense of ethical and social concern."
The College's Mission Statement is widely cited:
COLLEGE CATALOG, 1.1 Objectives and Purposes
.... Swarthmore seeks to help its students realize their full intellectual and personal
potential combined with a deep sense of ethical and social concern.
We have lived it. Our mission statement is not just words.
In 1991, the
Board of Managers passed a resolution which they cite today as
binding: "Investment Committee manages the endowment to
yield the best long term financial results, rather than to pursue other
is a poison pill for social consciousness, moral action,
and a life lived to high standards of personal integrity. Mission
statement or poison pill? Students, alumni and faculty must
reverse an aberrantly wrong choice by other members of the
AN IMAGINARY VICTORY DINNER
President's Climate Commitment Fund released moneys for it, the dinner,
its sweep of tables, was assured, and everyone looked happy to be in a
new place, and to be there together.
The alumni of
the late 1970s and 1980s flew into Swarthmore, more than had ever
registered on the Webpage. After dinner, the Chairman of the
Board of Managers didn't know whom to call, so many of the old
activists mounted the stage together, forty years after their South
Africa campaign started. The Board presented a framed resolution
to the old students. The resolution replaced what everyone
called the 1991 "poison pill" barring considering moral action or
social justice in any investment decision. Instead we had what
some called the President's Prerogative and others, The Leadership
RESOLVED: It is the sense of the College Community that final decisions of social
justice reside with the President.
Valerie Smith assured us she understood our traditions, and promised
everyone time to talk all issues to death before she decided anything.
greatest surprise was praise of the Board's Investment Committee when
those who had fought hardest for fossil fuel divestment spoke at the
event's close. Sitting in on presentations by private equity fund VCs,
getting a taste of derivatives and hedging, and visits to money
managers to see how potential investment baskets, even the ones used in
the slow but ongoing divestment program, to see how they are
constructed while investment strategies for running them are
back-tested --- all that had produced something more than a technical
understanding of what it takes to turn a big ship.
Across the room,
for one night, everyone understood that excellence flows from funding
which must not fail, but Swarthmore leads because it has always looked
Afrikaner houses in Capetown, South Africa, from slave trade days.
resource & document list
Resource 1, Petition: http://swatmj.org/petition/
Resource 2, Two
Plans for college
Resource 3, document: "We
Divest for Social Ostracism and Public Humiliation"
Resource 4, YOU ARE HERE: "Why
We Can Never Divest Again
Resource 5, document "Fossil
Fuel Divestment FAQ"
Resource 6, document "Swarthmore
Chooses Excellence in the 1800s."