Association Has $38.5 Million Invested in Firms Tied to S. Africa

By TINA DAUNT

Aug. 22, 1993 12 AM PT

TIMES STAFF WRITER

Ventura County’s government retirement association has invested $38.5 million in 25 companies boycotted by the state of California for doing business in South Africa, county records show.

The investments make up nearly 9% of the retirement association’s stock portfolio, which totaled $430 million last month. Unlike the state retirement association, which is prohibited from putting money into firms tied to South Africa, Ventura County has no restrictions on how its retirees’ money is invested.

As a result, the association has given seven investment banking firms liberty to purchase stocks in any type of business--as long as the ventures yield at least an 8.2% return for the county’s retirement system.

Supervisor John K. Flynn, who served on the county’s retirement board several years ago, said he does not believe the association should limit its investments because of social issues in South Africa or any other country.

“There are only about 20,000 black people living in Ventura County,” Flynn said. “They are the only ones who would care about this. . . . Well, maybe a few liberals would care, but not too many. I don’t like what’s gone on in South Africa, but I cannot use the pension fund to correct that.”

But the county’s decision to purchase stock in the firms has come under sharp criticism from the head of the NAACP in Ventura County.

“The policy of the association is discriminating against people of color and that policy needs to be looked at,” said John R. Hatcher II, president of the NAACP in Ventura County.

“Everyone talks about how racist this county is and this just adds to that. What I’m disturbed about is Flynn is echoing what a whole lot of others are saying. The county needs to do some serious selective buying.”

Neil Moyer, president of the Ventura County Environmental Coalition, also blasted the association’s policy.

Although the South African government has agreed to make reforms to end some of the racial strife in its country, Moyer said Ventura County must join the state in keeping financial pressure on the country.

“Even something as big as the state of California can manage to alter its investment polices to reflect social responsibility,” Moyer said. “Yet Ventura County seems to be stuck somewhere in the last century.”

He said the association should consider reversing its stance.

“They need to have some sort of social conscience in the treatment of its funds of its employees,” Moyer said.

County Treasurer-Tax Collector Hal Pittman, a member of the county’s retirement board, said the issue of South Africa has come up before, but the panel opted not to tie the hands of its investment managers.

“If we start saying you cannot invest in this and you cannot invest in that, where does that leave us?” Pittman said. “Thus far, the emphasis of the portfolio has been to go out and make us some money. I’m not saying that’s a permanent policy. We are always reviewing our policies.”

The county’s retirement board, which meets every two weeks at the Government Center to review the association’s investments, is comprised of nine members. In addition to Pittman, the panel includes Supervisor Maria VanderKolk, one retired county employee, three current employees and three citizens.

The members are either elected by the county employees and retirees or appointed by the Board of Supervisors.

VanderKolk said she did not have enough information on the investments to comment.

“I haven’t been on the retirement board long enough,” said VanderKolk, who was appointed to the association by the supervisors earlier this year.

Supervisor Vicky Howard, who served on the retirement board last year, did not return calls for comment.

The California Public Employees Retirement Assn., which represents the employees in Ventura County’s cities, is prohibited by a 1986 state law from holding stock in companies with economic links to South Africa.

Each month, the state association updates its list of companies with ties to the racially torn country. On Aug. 1, the retirement association issued a list of 143 companies it could not invest in.

Jose Arau, a principal investment officer for the state association, said some companies have recently renewed their ties to South Africa because of the country’s promise to make political reforms.

“Now that things are improving in South Africa, more companies are going back in,” Arau said. “But we still have to take them out of our portfolio.”

Arau said he disagrees with the state’s policy prohibiting the state public employees retirement group from investing in South Africa.

“We are apolitical and this is a political thing,” Arau said. “It restricts our ability to invest. It restricts our universe.”

According to Ventura County’s investment documents, the boycotted companies include such prominent firms as Colgate-Palmolive Co., Texaco Inc. and Phelps Dodge Corp.

Albert Harris, the chairman of the county retirement association and a Ventura financial planner, said he was unaware that the county had invested in 25 firms with dealings in South Africa.

“My thoughts have been that some of the companies that we have been doing business with had very, very small dealings with South Africa,” Harris said. “We’ll have to talk to our financial managers about it.

“If we give up the 25 firms, we have to figure out what the financial impact is. It could be pretty great. My main concern is that the fund stays solvent. It’s for our retirees’ future.”

SOUTH AFRICA CONNECTIONS

Ventura County retirement fund holdings include investments in 25 firms boycotted by the state of California for doing business in South Africa.

Company: Holdings Abbott Laboratories: $2.2 million

American Cyanamid Co.: $731,262

Avery Dennison Corp.: $693,954

Bristol-Myers Squibb Co.: $879,727

Colgate Palmolive Co.: $2.8 million

Cummins Engine Inc.: $1 million

Digital Equipment Corp.: $1.2 million

Glaxo Holdings: $2.4 million

International Paper Co.: $1 million

Kimberly-Clark Corp.: $1.3 million