UC Chief Wins High Marks in Test on South Africa Investment Policy

To any University of California student, the scene would have been familiar: a crowded auditorium with some people taking notes and some looking bored as a scholarly figure methodically delivers a lecture.

It was not, however, a course in sociology or political science. It was UC President David P. Gardner stating his view on the role of the university and its policy on investing in firms that do business in South Africa.

Through months of escalating protests on UC campuses, in which students and some faculty members called for the university to sell its South Africa-related stocks, Gardner had listened and said little. Even on the afternoon before the university’s Board of Regents was to vote, Gardner refused to divulge to them the details of what he would propose.

He had, however, talked privately to most of the regents, and when the June 21 meeting began, Gardner carefully read a four-page statement, had his aides distribute copies of a four-page motion and then settled back into his seat to wait for the regents to act.

Three hours later, after Assembly Speaker Willie Brown and other liberals on the board made impassioned pleas for phased divestiture over five years and after 50 demonstrators shouting “shame” were pushed out of the auditorium, the regents approved Gardner’s plan.

For Gardner, who became UC president in 1983, it was his first tough test.

He had already won two double-digit budget increases for the UC system, which he said he believes will halt a decade of slow decline. The South African divestiture issue, however, posed the kind of intense public controversy which, if mishandled, could throughly undercut the power of the university president. In the week after the vote, most of the regents contacted gave Gardner high marks for his deliberate and careful handling of a difficult, divisive issue. A solid majority also said they agreed with his essential conclusion that divestiture is a bad idea.

Several regents on both sides of the issue said, however, that Gardner offered such a weak plan that he alienated key liberals like Brown and Lt. Gov. Leo T. McCarthy and may have inadvertently aroused continuing student protests.

“A good number of those who voted for it (Gardner’s plan) would have preferred something a little stronger,” said Willis Harman, who backed Gardner. “It’s very easy for the public to conclude that we just turned this over to a committee so we can forget about it.”

Under the plan approved by the regents, Gardner will set up an advisory committee made up of UC officials, faculty, students and alumni to review the 33 companies that do business in South Africa whose stock, totaling $2.4 billion, is owned by UC. At least once a year, the committee will evaluate whether the firms are being “good corporate citizens” in South Africa and will report its findings to Gardner and the regents.

Brown’s call for a phased five-year divestiture lost on a 9-14 vote, with three regents disqualifying themselves. Gardner’s plan then won approval on a 16-10 vote.

Harman, a retired Stanford professor, said several regents like himself “wanted us to make a stronger statement. This may have been the right action, but it was the wrong packaging.” The result, he added, is that “life is going to be more difficult for us in September because we didn’t handle this very well.”

In September, the regents are to take up another controversial matter: whether to continue operating nuclear weapons labs under contract with the Department of Defense.

Gardner, 52, rose through the ranks of the UC administration but became president of the University of Utah before returning to head the nine-campus UC system. He quickly developed a reputation as a reserved and efficient manager of the university who, one regent said, “likes to play his cards close to his vest.”

Bill Honig, state superintendent of public instruction and an ex-officio member of the Board of Regents, said he believes that Gardner should have sought more of a compromise with those who were supporting selective divestiture.

“I think with a few minor changes, he could have gotten a strong, united majority. We kicked that away, and you don’t throw away that kind of political support cavalierly,” said Honig, who also voted for Gardner’s plan.

In particular, Honig and several others said they believe that the board should have incorporated two parts of Brown’s proposal into Gardner’s plan: a continued moratorium on the purchase of new stocks of firms doing business in South Africa and a call to sell stocks of those firms that are direct suppliers to the South African government.

“I was very disappointed that we didn’t go along with those two very moderate amendments. My guess is that because of that, UC is going to have a more difficult time in the Legislature,” said Yori Wada, a regent from San Francisco who voted first for Brown’s plan and then backed Gardner’s.

In response to a question during the debate, Gardner said he accepted the idea of selling stock in firms that directly aid the South African government but opposed adding that language to his proposal, preferring not to tie the hands of the committee. The amendments were then defeated in a vote.

“We should have called for a brief recess before that vote. I think we could have gotten together and worked out something of a compromise,” Honig said. “That’s one of the consequences of him (Gardner) playing it so close to the vest.”

Because the final plan does not include a strong policy statement, “it looks like we ended up with just a nameless, faceless, timeless and mandateless committee,” said Sheldon Andelson, a regent from Los Angeles who supported Brown’s plan.

In an interview, Gardner disputed the notion that he could have moved more toward divestiture without jeopardizing his majority vote.

“It is my view that for every vote I would have picked up on the liberal side (by adding Brown’s two amendments), I would have lost two on the other side,” Gardner said. As it was, three conservative regents voted against Gardner’s plan because they said it smacked of an anti-business attack.

“This was surely the most difficult and contentious issue I’ve had to face, and we skated very close to getting no resolution at all,” Gardner said. “If my motion had failed to gain a majority, I think we would have ended with no resolution.”

Several regents agreed with Gardner that his plan represented the best compromise.

“People like Willie Brown have tried to turn this into a political thing, but most of us don’t want any part of that,” said Frank Hope, a regent from San Diego. “The president (Gardner) has had this ad nauseum for six months--picketing outside his office, protests, petitions. He knows this issue and he knows what the regents think a hell of a lot better than people like Willie Brown or Bill Honig.”

In 1977, the regents rejected, in an 11-6 vote, a similar motion to sell South Africa-related stocks, saying also that the university must consider “social and moral concerns” when making investment decisions.

Gardner said his advisory committee will give the university a mechanism for reviewing the behavior of the American firms operating in South Africa.

Of the 33 firms in the UC portfolio that do business in South Africa, 30 are in good standing according to the Sullivan Principles, the voluntary code that seeks to measure whether firms are furthering equality for South Africa blacks.

“All will be reviewed each year, with a presumptive standard that includes whether they are engaged in the vigorous promotion of racial equality,” Gardner said. Selling those stocks, he added, would merely have “changed the ownership from someone who cares about what happens in South Africa to someone who doesn’t care.”

He added that he opposed the continued moratorium on new stock purchases because “it headed in the direction of divestment, which is the opposite of where we wanted to go.” He also opposed Brown’s amendment on direct suppliers to the South African government because “its language was too broad and too general. It could be read to include everything.”

In his generally overlooked opening statement, Gardner made it clear that he resented the fact that the debate on divestiture had “taken on more of a political and coercive character than a reasoned and analytical quality.”

“The regents should not permit the university to be used in support of one particular set of political views,” Gardner said. Instead, he said, the university should encourage “reasoned discussion” and a free exchange of views--a statement that was interrupted by hisses and shouts from student demonstrators.

Last week, Gardner said he hoped to “avoid a lingering bitterness” among those on the losing side of the divestiture debate.

“We took this very seriously. We spent an enormous amount of time on it. We had an open and extensive debate,” he said. “One always runs the risk of people feeling hostile about the outcome, but I would hope that they would not seek vengeance against the institution.”