Governor Gets Landmark Bill on Divestiture

Following an intense, somber debate, the Assembly on Wednesday passed and sent to Gov. George Deukmejian a landmark divestiture bill that will lead to the sale of up to $11.4 billion in state investments in firms operating in racially segregated South Africa.

“The state of California will send an important signal out across this country and out across the world that we are no longer going to do business with firms that help to prop up a regime that has apartheid, a government where racism is constitutionally enshrined,” said Assemblywoman Maxine Waters (D-Los Angeles), the author of the legislation.

Largest in Nation

By a vote of 50 to 26, the Assembly gave final legislative approval to what would be the largest divestiture plan in the nation, culminating seven years of efforts by Waters and other black legislators to win passage of such a measure.

Deukmejian, who switched positions and began advocating such legislation this summer, praised the Assembly action, saying, “California today sent a clear, unequivocal message to the racist government in South Africa: If the inhuman system of apartheid is not terminated we will withdraw $11.4 billion of our investments in companies that do business in South Africa.”

The divestiture plan will take effect over four years and require the sale of up to $8.3 billion in state pension funds investments in companies doing business in South Africa. It also will clear the way for the University of California to proceed with its own $3.1-billion divestiture plan by indemnifying the UC regents of any personal liability in disposing of the university’s holdings.

“No longer will we subsidize discrimination,” Assemblyman Gray Davis (D-Los Angeles) told his colleagues. “No longer will we underwrite apartheid.”

The Assembly, which usually conducts its business in a carnival atmosphere, was absorbed in the divestiture debate for 2 1/2 hours as a third of the Assembly’s 80 members rose to speak, many in personal and emotional terms.

“This is a historic day,” said Assembly Speaker Willie Brown (D-San Francisco), who is black. “When we pass this, and when the governor signs it, I think apartheid will absolutely be on the way out. I believe that other states and other nations will follow this example.”

Personal Experiences

Assemblymen Elihu M. Harris (D-Oakland) and Curtis R. Tucker (D-Inglewood) spoke of discrimination in their own lives in this country: of segregated schools, segregated restaurants and of being called “nigger.”

“There is no greater undermining of the human spirit than to be discriminated against because of the way God made you,” said Assemblyman Bruce Bronzan, a white Democrat from Fresno.

Assemblyman Tom Hayden (D-Santa Monica), a 1960s radical, told his colleagues that he was demonstrating as long ago as 1963 against U. S. corporations that were investing in South Africa.

For at least 13 years, UC students have protested against the regents’ policy of investing in firms doing business in South Africa.

Waters’ measure was opposed primarily by Republican legislators who argued that the legislation would harm blacks in South Africa who work for U. S. companies and would ultimately promote a communist takeover there.

Communist Policies

Opponents also argued that the bill ignored communist countries with policies that are as abhorrent as apartheid.

“The Legislature, in completely ill-advised fashion, seeks to make foreign policy,” protested Assemblyman Don A. Sebastiani (R-Sonoma).

Assemblyman Nolan Frizzelle (R-Huntington Beach), who in the past has defended apartheid, said Americans do not know enough about South Africa to understand that country’s system of legal segregation.

And Assemblyman Gil Ferguson (R-Newport Beach) told his colleagues, “What you’re being asked to do is to pour gasoline on a fire to put it out.”

Four Republicans joined Democrats in voting for the bill: Assemblymen Larry Stirling of San Diego, William J. Filante of Greenbrae, Ernest Konnyu of Saratoga and Gerald N. Felando of San Pedro. One Democrat, Assemblyman Alister McAlister of Fremont, voted against the legislation.

Democratic leaders praised the Republican governor for recently shifting his stand from favoring a go-slow approach to supporting full divestiture of all state and UC investments in firms doing business in South Africa. Last year, Deukmejian vetoed a milder divestiture bill and blocked Brown’s divestiture proposal before the UC Board of Regents.

Speaks to Republicans

“It takes a big man to recognize that circumstances and information should now dictate a different decision,” Brown said. Then directing his remarks to Republican opponents, the Speaker added, “If he could come to the conclusion that it is now time to make this bold statement and to take this action on behalf of the freedoms of blacks in South Africa, you too ought to be able to understand and make that necessary change.”

The legislation will give companies doing business in South Africa a one-year grace period before divestiture must begin. Starting in 1988, the Public Employees Retirement System and the State Teachers Retirement System will be required each year to sell at least one-third of their holdings in firms operating in South Africa. Divestiture must be completed by Jan. 1, 1991.

Investment Fund

The bill also will apply to the state’s Pooled Money Investment Fund, which makes up to $20 billion in short-term investments at a time, potentially investing billions of dollars in firms doing business in South Africa.

The bill, which was passed by the Senate on Monday, sped through the Legislature after Waters, Brown and Deukmejian reached agreement on the plan two weeks ago.

The bill was never considered by any legislative committee--a striking contrast to seven years ago when Waters could not win a single vote for a similar bill when she first brought it before an Assembly committee.