4 Divestiture Backers Face Own Decisions on Portfolios

Four Los Angeles City Council members who backed a landmark divestiture plan Tuesday to rid the city of investment links to racially separated South Africa must now wrestle with some divestiture decisions of their own.

The council members, including Zev Yaroslavsky, the leading sponsor of the divestiture plan, own stocks or bonds in companies that do business in South Africa.

A review of the economic interest statements filed by Mayor Tom Bradley and each of the 15 council members shows that in addition to Yaroslavsky, Councilmen Marvin Braude, John Ferraro and Howard Finn hold financial interests in companies doing business in South Africa.

“If they feel so strongly about (divestiture), they ought to withdraw their investments immediately,” Councilman Ernani Bernardi said. “They should have done it a long time ago if they had these strong feelings.”

Review Portfolios

When asked about their holdings, the four council members said they had intended to either sell the stock or at least review their portfolios to determine whether to rid them of such investments.

Ferraro hotly rejected the notion that it was hypocritical for him to champion a city policy of divestiture while retaining similar investments of his own.

“I don’t feel awkward at all,” he said. “I feel I’m voting against my own interests here by voting for the stronger policy I want.”

The four council members’ investments range from Yaroslavsky’s $12,000 in stock in IBM and Tenneco Inc. to at least $60,000 invested by Ferraro in half a dozen companies, including Exxon, ITT, Mobil and Raytheon.

According to their financial statements, Braude also reported owning at least $20,000 in stock in W. R. Grace & Co. and Stauffer Chemical Co., while Finn listed a minimum investment of $23,000 in General Motors, Ford Motor Co., IBM, International Harvester and Warner-Lambert.

The company names were among those listed as conducting business in South Africa in a January, 1985, report by the Investor Responsibility Research Center Inc., on which city staff has relied extensively for its information on divestiture.

The investments of individual council members could prove larger, because the interest statements require that public officials merely estimate the extent of their financial dealings in broad financial categories.

Yaroslavsky said he inherited 78 shares of IBM stock and 50 shares of Tenneco stock from his late father. He said the existence of the city’s new policy will hasten his move to sell them.

“The city’s policy is to do it in a financially prudent manner. That’s the guideline that all of us should focus on, and that’s what I intend to do,” Yaroslavsky said.

Didn’t Have Time

Finn said he intended to sell the stock he owns in companies doing business in South Africa but has not had time to do so.

“It’s a matter of giving it the proper attention. I just haven’t gotten around to it,” he said.

Finn said he would be “in no hurry to divest” if those companies are complying with a code of conduct, known as the Sullivan Principles. The voluntary code, drawn up in 1977 to pressure companies in South Africa to push for social change, requires that employers improve working and living conditions of non-white laborers.

Ferraro, who had pushed Tuesday for a ban on purchasing new goods and services from businesses involved with South Africa, said he also intended to review his stocks and bonds.

Braude said he was unaware whether the companies in which he owns stock are linked to South Africa. However, Braude said he was not surprised that he and other council members have such investments, because of the presence of major corporations there.

Braude said he intends to check further on the extent of the companies’ business in South Africa before deciding whether to divest.