Deukmejian Assails Plan to Force UC Divestiture

Gov. George Deukmejian said Tuesday that it would be “very foolish” for the Legislature to hold up construction funds for the University of California in an attempt to force UC to sell its investments in companies that do business in South Africa.

“I don’t see any benefit in punishing the students of the University of California for some of the wrongs that are being carried out by a government of some foreign country,” the governor said at a press conference.

Deukmejian, a member of the UC Board of Regents, said that there are no plans to sell the stock his wife inherited in a company doing business in South Africa and that he does not believe the investment represents a conflict of interest for him in deciding the divestiture issue.

The Board of Regents is under pressure from student protesters and some legislators to sell its $1.7-billion investment in U.S. companies that do business with South Africa because of that country’s system of racial separation known as apartheid.

Proding Regents

As a way of proding the regents, Assembly Speaker Willie Brown (D-San Francisco), himself a regent, proposed last week that the Legislature withhold up to $300 million earmarked for UC construction and other non-educational purposes.

“I think that’s a very foolish action to take,” Deukmejian told reporters in response to a question.

A budget subcommittee controlled by Democrats is expected to vote on the construction funds next week.

The governor said he has not yet decided his position on the divestiture of UC funds or on a bill in the Legislature that would halt investment of state pension funds in companies conducting business with South Africa. The retirement systems have $7.8 billion invested in such firms.

“I’m not going to take any position on any divestiture bills at this time,” he said. “I really want to have the benefit of hearing and studying and considering all the arguments that are to be made on this subject and also to consider the various options that might be available before I make any final decision.”

Deukmejian reported earlier that he has a financial interest of between $10,000 and $100,000 in General Electric Co., one of more than 250 U.S. companies doing business in South Africa.

“I don’t have any plan for that stock at the present,” the governor said. “This stock was stock that was inherited by my wife from her parents. It’s a decision that she should make, because it is her stock.”

Deukmejian is one of more than two dozen legislators and regents who have a financial interest in firms linked to South Africa. These stock holdings, he said, should not disqualify any of the officials from voting.

“I don’t believe it would be a conflict of interest,” he said, adding that if a conflict did exist, legal advisers would tell him so.

“There have been for years and years members of the Board of Regents who have stock holdings who have been voting on issues involving how those funds are to be invested, and there have been no questions raised to my knowledge with respect to any conflict of interest.”

During the wide-ranging press conference, the Republican governor fended off criticism of Democratic legislators that his Administration has been slow in cleaning up toxic waste sites.

During his tenure, he said, more than 100 sites have been cleaned up, compared to 13 during the Democratic Administration of Gov. Edmund G. Brown Jr.

High Priority

Deukmejian acknowledged that his Administration is giving high priority to small-scale waste sites in order to spread state funds as far as possible.

“To clean up as many of these as possible is a wise expenditure of the dollar,” he said. “If you have one major site, that is going to use up all the dollars.”

In addition, Deukmejian said long delays at the Department of Motor Vehicles resulting from a new appointment procedure have been greatly reduced by an increase of 128 employees and an expanded telephone system.

“The number of complaints now have been greatly reduced,” he said. “We’re expecting that with the increase in personnel, we will be able to eliminate that backlog very shortly.”