DWP Pensions and South Africa

Public employees and retirees throughout California should be grateful for the action by three employee representatives on the Board of Administration of the Los Angeles Department of Water and Power in refusing to support a proposal by the board to rid the pension fund of investments in companies that do business in South Africa.

One of the members, Vincent J. Foley, who voted against divestiture, was quoted as saying that critics of the divestiture policy object to the use of non-economic factors such as the troubled South African political situation in determining where to invest retirement funds. As a longtime contributor to the Public Employees Retirement System, I appreciate and understand what I regard as considered, reasoned management of my money, as Foley has indicated.

Foley was further quoted as saying, “We take our fiduciary responsibilities very seriously, and we don’t want politics to interfere with that.” Obviously, at the local and state levels, the politicians are more concerned with expressing their self-styled “moral indignation” than they are with exercising sound fiscal responsibility. This is particularly obvious at the state level since the divestiture bill sent to the governor will indemnify managers of state pension funds from any personal liability in carrying out the divestiture policy. During the next three years, the fund managers would be required to sell off investments in companies still operating in South Africa. Any losses in those forced sales will be borne by others--not the fund managers or the politicians!

Aside from the financial risks in any divestiture plan, a more important consideration is the intrusion by elected officials at local and state levels in the foreign policy function of the federal government. It is not a responsibility of the mayor of Los Angeles or the governor of California to determine the foreign policy of this nation. Neither do they have any moral or legal right to expect that their so-called “moral indignation” be subsidized.

The sheer hypocrisy of those who argue the case for divestment is evidenced by their failure to advocate such a plan for firms doing business in the Soviet Union. Why have none of them spoken out against President Reagan’s proposal to subsidize the sale of wheat to the Soviet Union--at taxpayers’ expense? The answer could be that there are no black votes to be gained by expressing “moral indignation” over methods used by the Soviet Union to control its people.

Others have expressed it better than I can in previous letters and articles. We have no right to take actions that could result in the destruction of the South African nation. Acting in our own self-interest, which is the only way our nation, or any nation, should act, we should work with the South African government to resolve its internal problems.

WILLIAM H. LONGENECKER JR.

Indio