Council Members Protest New City Investments in South Africa
Despite last year’s City Council recommendation that San Diego sell its stock in firms that do business in South Africa, the city retirement board has acquired more than $3 million worth of shares in such companies over the past year.
The board’s actions angered three City Council members in a Rules Committee meeting Monday, and council members Tuesday reaffirmed their desire for the board to divest.
“To say that the council’s plan has been ignored is putting it mildly,” Councilman Uvaldo Martinez said. “We requested that the board submit a plan of divestment by this year, and the whole policy direction has been ignored.”
The Rules Committee also requested Monday that the city attorney restructure the retirement board’s investments and report to the committee with divestiture guidelines, committee consultant James Lantry said.
Pressure from several city employees and members of The Campaign Against Apartheid, a local organization that favors divestiture, prompted last year’s council recommendation that the board divest, Martinez said.
However, Conny Jamison, a retirement board member and San Diego city treasurer, said that the board never agreed to the council’s request.
“The board never indicated that they would divest last year,” Jamison said. “We have a fiduciary responsibility to act in the best interest of the beneficiaries of the retirement system.”
Of the $560 million in the city’s retirement fund, $36.7 million is invested in companies that do business in South Africa, Retirement Administrator Robert Logan said.
Since last year’s council recommendation, the board has invested in GMAC, Sara Lee and Security Pacific National Bank, all of which do business in South Africa. The board still has investments in the Minnesota Mining & Manufacturing Co., Dunn & Bradstreet, and the Avery Co., which also do business in South Africa.
Over the past year, the retirement board has divested its stock in two companies that have business dealings in South Africa, but the decisions were based on financial reasons and were not a statement against apartheid, Jamison said.
“Coincidentally, we divested from those companies,” Jamison said. “The decisions had nothing to do with South Africa.”
By August, the amount of investments will decrease by $6 million when cash deposits in two companies mature, Logan said. One of the firms is Times Mirror Co., owner of the Los Angeles Times, which maintains a news bureau in Johannesburg. The other company is IBM.
The 13-member retirement board operates under the provisions of the City Charter and the municipal codes. The City Council has limited power over the board, however.
Scudder, Stevens & Clark, an investment consulting firm based in Los Angeles, is the board’s investment adviser. Robert Templeton, vice president of Scudder, said his firm was aware of the City Council’s request.
“The request has been discussed,” Templeton said. “No one on the board has expressed any sympathy with the South Africa system or apartheid.”
The board’s actions and the council’s reaffirmation come in the wake of social unrest, a declared state of emergency and the 10th anniversary of the Soweto riots in South Africa. Over the weekend, a San Diego man visiting the country was among hundreds arrested and jailed in Cape Town.