Last November, it seemed as if the City Council had decided to join the growing anti-apartheid campaign. The council voted unanimously to approve “in concept” a plan to cut economic ties between the city and South Africa, and told its three-member Finance Committee to figure out just how best to do that.
But in the nearly five months since the council’s decision, the Finance Committee has yet to reach any decision on divestiture. In fact, the committee has failed to take up the apartheid issue at even one of its monthly meetings.
The lack of any concrete action has left some anti-apartheid advocates upset, questioning whether the council’s devotion to divestiture is anything but a hollow political promise.
“It’s kind of irritating that no action has been taken,” said Frank Berry, Long Beach branch president of the National Assn. for the Advancement of Colored People. “And I guess it’s just going to sit there until it’s raised again by us or some other group.”
While municipalities such as San Francisco, Los Angeles and Boston have enacted divestiture plans, the matter has remained mired in a bureaucratic bog in Long Beach--but not, city leaders insist, because they are reluctant to take a stand on apartheid.
‘In Limbo Right Now’
“I don’t think there’s any question as to the City Council’s opposition to apartheid,” said Councilman Thomas Clark, chairman of the Finance Committee. “It’s just one of those things that’s in limbo right now because of other issues and because we just haven’t been pushed. Other issues have just come ahead of it.”
Councilman Warren Harwood, a member of the Finance Committee along with Clark and Councilman Edd Tuttle, agreed.
“I feel we need to take some effective action on it,” Harwood said, stressing that any delays have come while city staff members work out the “costly and complicated twists and turns” of a divestiture plan.
Berry said that the matter likely would have been resolved long ago, but the principal council backer of the anti-apartheid measure, Councilman James Wilson, has been busy preparing for his trial on charges that he was paid about $54,000 by fireworks magnate W. Patrick Moriarty in exchange for supporting legislation to legalize “safe and sane” fireworks.
Indeed, Wilson said that he plans to raise the matter again before the entire council as soon as his trial, which began this week, is over.
“They’ll keep it in committee probably forever if I don’t take it out,” Wilson said, suggesting that members of the Finance Committee have balked at taking up divestiture because “it’s such a complex issue.”
Sticky Legal Questions
Clark acknowledged that several sticky legal questions loom, chief among them whether a proposed restriction on depositing city money in banks that do business in South Africa would be a violation of state and federal antitrust laws.
The city currently has investments in excess of $475 million with more than a dozen banks and brokers, but has yet to determine which of these firms has ties with South Africa.
In a Dec. 3 memorandum to the Finance Committee, City Atty. John R. Calhoun said that a proposal that banks must break all connections with South Africa before doing business with the city might constitute an unlawful restraint of trade under antitrust laws.
A violation of the antitrust statute could prove costly. The city could be fined $1 million, forced to pay triple damages to the penalized banks and reimburse their legal fees, Calhoun said.
As a result, Calhoun has recommended to the committee that a compromise plan be adopted allowing city financial managers to invest money in banks with South African ties, but only if the institutions adhere to the Sullivan Principles.
Those principles, drawn up in 1977 by the Rev. Leon H. Sullivan, a Philadelphia Baptist minister, call on American firms to promote social reform in South Africa by requiring equal employment and improved living conditions for people of all races in the segregated country. Sullivan, a civil rights activist, is the first black member of the board of General Motors Corp.
Ban on Contracts Urged
Other cities have also tangled with the antitrust issue, among them Los Angeles. While that city had already taken steps to divest its employee pension funds of any South Africa investments, Mayor Tom Bradley went even further last month, calling for a ban on contracts with firms doing business in South Africa, among them IBM and General Electric.
Despite the push by Bradley, the Los Angeles city attorney’s office said that the proposed ban might violate the state antitrust law prohibiting discriminatory contracts. However, the author of that legal opinion, Deputy City Atty. Lewis Gutierrez, has acknowledged that the proposed ban could be defended in court on the grounds that the state antitrust law was not meant to interfere with the right of a city to regulate its contracts.
This antitrust statute was passed in 1976 to prevent compliance with an Arab League boycott of Israeli goods and Jewish-owned businesses. The law prohibits contracts that require discrimination on the basis of race, sex, color, ancestry or national origin.
While Long Beach’s investments in banks and other financial institutions could be affected if a divestiture plan is adopted, the city’s employee pension funds would remain unfettered.
A pension fund for police and fire personnel in Long Beach is financed on an annual basis from the city’s general budget. Retirement benefits for all other employees are administered through the state Public Employees Retirement System. While the retirement system operates independently of any single municipal government, it invests in firms with South African ties only if they uphold the Sullivan Principles.
Other advocates of divestiture said they also are eager to see the matter finalized.
“It seems to me it’s taken a long time,” said Sid Solomon, president of Long Beach Area Citizens Involved, a 580-member, liberal, grass-roots group. “Somebody needs to build a fire under the council to get something done on this.”