Evading link with Sudan

UM foundation pledges not to invest in 4 firms


In response to student activists, and in step with a nationwide trend among college endowments, the University System of Maryland Foundation has pledged to avoid investing in four companies it believes help the government of Sudan commit genocide in the country's Darfur region.

"We don't want to be associated with the mass murder of innocent civilians," Leonard Raley, president and CEO of the $700 million foundation, said last week.

The announcement was greeted with enthusiastic approval by many in the university community, but some divestment activists said the foundation's resolution - formally adopted by its board in June but not publicly announced until last week - did not go far enough and left key questions unanswered.

In taking a stand against companies who do business with the Sudanese government, which the United States has accused of fomenting genocide in the country's western region, the Maryland system joins 23 other university endowments that have recently adopted anti-Sudan positions, according to the Sudan Divestment Task Force, a student-run organization that is one of the leaders of the movement.

The first college to take a stand was Harvard University, whose endowment sold last April a multimillion-dollar investment in PetroChina, a Chinese oil company that does business in Sudan. Additional schools that have recently followed suit include the University of Pennsylvania and Princeton University.

"I believe [this] is a respectable course of action for the USM Foundation," said Brian S. Bailey, a University of Maryland, Baltimore County student who is chairman of the system's student council. "The members of the USM Student Council are very proud of their actions."

But Laura Brewer, a University of Maryland, College Park student who was one of the activists urging the system to denounce investment in Sudan, said the resolution left her wanting.

"I'm pleased that they have taken our request seriously," she said. "That they did anything at all was more than some of us had expected. But as to ... specifics, I definitely think it lacks."

Brewer criticized the foundation for singling out for disinvestment only four companies that service the Sudanese government's oil economy: China's PetroChina and Sinopec; Malaysia's Nam Fatt; and India's Oil and Natural Gas Corp. "These are definitely some of the worst offending companies, but I think there are others that are equally harmful. Why pick these?" Brewer asked.

This summer, Brewer submitted to the foundation a proposal that they add several other companies to their no-investment list. Raley said the foundation is considering her proposal.

The bulk of the foundation's $700 million in assets is invested in equities, and most of those are managed by third-party fund managers who have the discretion to buy and sell shares on behalf of the foundation and other investors, said Raley.

None of these fund managers are invested in the four companies, and Raley said the foundation has "strongly recommended" to fund managers that they avoid investing in the four in the future.

"Our investment staff constantly monitors the investments of our fund managers. If we learn that any of the managers have investments in the companies on our list, it is our intention that we will redeem our shares," said Raley.

Daniel Millenson, a Brandeis University student who is executive director of the Sudan Divestment Task Force, criticized the University System of Maryland's lack of transparency in its disinvestment selection process, which raises questions about whether the existing investments might have determined which companies were added to the list.

In response, Raley said that the foundation staff member who recommended the four banned companies was not aware of the foundation's current investments. He pledged to make publicly available the foundation's selection criteria of companies in which it pledges not to invest.


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