UC Urged to Renew S. Africa Debate : Brown Cites Rising Violence in Call to Re-Examine Divestiture

Contending that the government and the economy of South Africa have become “dangerously unstable,” Assembly Speaker Willie Brown has asked the University of California to reopen the debate about divesting its huge stock holdings in firms that do business there.

In June, a divided UC Board of Regents rejected Brown’s call for a phased divestiture of the $2.4 billion in pension money invested in companies with ties to the racist regime. Instead, the board set up an advisory panel to review the stock holdings.

After months of student protests, UC officials had hoped to put the South Africa issue behind them.

But “in the light of the escalating civil strife in the Republic of South Africa and the growing antagonism between the regime and the people it attempts to govern,” Brown wrote in a letter to UC President David Gardner, “I respectfully ask that the issue of the university’s portfolio holdings . . . be brought before the Board of Regents once again.”

UC students also wasted no time in reviving the issue. Within hours after classes began at the Berkeley campus Monday, about 300 students rallied in Sproul Plaza to protest apartheid.

Brown also indicated that he is broadening his argument this time. Some critics of divestiture had said social and political views should not influence investment decisions. Under their “fiduciary duty” as trustees of the pension funds, they said, they are obligated to make the best and most prudent investments.

But the spread of anti-apartheid violence has made divestiture a prudent business move--in addition to a morally correct position, Brown said.

The South African economy is sinking into “its worst recession since the 1930s” and the growing disorder threatens both the regime and the corporations that do business there, he said in the letter to Gardner.

“I would hope given the experience of Chile and Iran that some American corporations are re-examining the wisdom of maintaining a presence in so unstable a country,” Brown wrote.

Gardner had no comment on the request, except to say through a spokesman that he was preparing a reply that would be issued today.

Several regents noted that Brown, as a board member, is entitled to bring up any motion he wishes. But it is not clear that any opinions on the board have changed since June.

“I don’t see a change in my vote. We set up the machinery to look at the stocks and to withdraw in certain cases,” said Regent Willis Harman, who, though considered a swing vote in June, voted against divestiture. “There’s too much division on the board over this, so my preference is to leave it alone.”

Vilma Martinez, a Los Angeles attorney and chairwoman of the UC board, said she didn’t know whether any regents had changed their minds in two months, but that she doubted that a majority had been swayed.

“This was a very difficult issue. We gave it careful consideration and a resolution was reached. And I suspect most of us will want to give that resolution a chance to work,” Martinez said.

Under a plan devised by Gardner and approved at the June meeting, a nine-member advisory panel will conduct a case-by-case review of the university’s stock holdings. The committee, which is to be chaired by UCLA Chancellor Charles Young, will judge whether the American firms operating in South Africa are taking steps to further equality for blacks. If not, the committee may urge the regents to sell the stock.

UC has a stock and bond portfolio valued at about $6.3 billion. Of that, $2.4 billion is invested in 33 companies with ties to South Africa, although most have less than 1% of their assets invested there.

The next UC board meeting is scheduled for Sept. 19 at UCLA.