Exposing Corporate Ties to your School: Intro & Part 1 — Investments

By Mike Ewall (2000)

Introduction

Note: this arti­cle is a fol­low up on a pre­vi­ous arti­cle in SEAC’s nation­al mag­a­zine titled Pick­ing an Issue: From Ser­vice Projects to Issue Campaigns.

There are many ways that cor­po­ra­tions can be con­nect­ed to your school. The fol­low­ing is a guide on how to go about research­ing and expos­ing these ties. First, some background…

Pub­lic vs. Pri­vate: If you attend a pub­lic school or col­lege, their records are open to pub­lic scruti­ny. You have a right to ask for and receive any infor­ma­tion. If you attend a pri­vate school or col­lege, they are under no oblig­a­tion to reveal any­thing. You have no right, even as a con­sumer of their edu­ca­tion prod­uct, to find out any­thing about them, unless the infor­ma­tion is avail­able through their con­nec­tion with a pub­lic agency of some sort.

Know your rights: Your state has a law known either as a “Right-to-Know” Act or as an “Open Records” Law. This law should not be con­fused with the fed­er­al Free­dom of Infor­ma­tion Act (FOIA). While FOIA applies to fed­er­al insti­tu­tions, your state’s right to know laws will apply to every­thing run by your state, coun­ty or local gov­ern­ments. This includes state uni­ver­si­ties, com­mu­ni­ty col­leges and pub­lic grade schools. You can find a copy of this law in your school’s library (ask the librar­i­an… it should be with­in a large com­pendi­um of state laws or “state code”). It might be in the same sec­tion as “open meet­ings” if it’s not under “open records,” “right-to-know,” or “pub­lic access to….” Also, you can request copies of state laws from any of your state leg­is­la­tors (look up your state rep­re­sen­ta­tive or state sen­a­tor in the gov­ern­ment sec­tion of your phone book). Final­ly, you might be able to find stuff by dig­ging through your state’s web­site. Start at www.state.XX.us (replace XX with your two-dig­it state code).

Be nice to sec­re­taries and oth­er staff: Many of the peo­ple you’ll be deal­ing with are sec­re­taries. Sec­re­taries are not your ene­my and they can be very pow­er­ful friends. They may be low in the cam­pus hier­ar­chy, but they have access to lots of paper­work and doc­u­ments that you may want. A friend­ly sec­re­tary could eas­i­ly slip a copy of a doc­u­ment to you or your group if they were sym­pa­thet­ic to your cause. In some cas­es, even jan­i­tors have helped stu­dents get things they need by trash-pick­ing doc­u­ments from the pres­i­den­t’s office.

Be pre­pared to be inter­ro­gat­ed: No mat­ter who you ask and no mat­ter whether it’s pub­lic infor­ma­tion or not, nine times out of ten, you’ll be asked a lot of ques­tions by the peo­ple who you’re ask­ing for infor­ma­tion from. Be pre­pared to answer: What are your names and how can I con­tact you? What do you want this infor­ma­tion for? What do you plan to do with it? What group are you with? Are you with the news­pa­per? Is this for a class? Which one?

It’s best not to out­right lie in response to these ques­tions. If you lie and say it’s for a class, you’ll have to be ready to say which class and who the teacher is in case they ask. It’s okay to be vague or exag­ger­ate a bit, but out­right lying may catch you real­ly unpre­pared and can hurt you if you can’t fol­low it up or if you get caught.

Admin­is­tra­tors are gen­er­al­ly savvy enough to know that you’re not just doing this for no rea­son or for sim­ply aca­d­e­m­ic curios­i­ty. You can try to say that your not sure what you’ll do with the infor­ma­tion at this point or you can give some soft answers which only hint at the full range of what you might do with the info. Def­i­nite­ly don’t be blunt and say that you’re look­ing for any infor­ma­tion you can use to attack the uni­ver­si­ty with. It won’t help…

Don’t let the inter­ro­ga­tion go deep­er than you want it to go. Take advan­tage of paus­es in the con­ver­sa­tion to change the top­ic and ask ques­tions of your own.

Put requests in writ­ing: Espe­cial­ly at pub­lic schools. Start a paper trail. If you get denied infor­ma­tion (no mat­ter whether it’s pub­lic infor­ma­tion or not), ask that the denial be in writ­ing and on let­ter­head. This paper trail will help future stu­dents know what you did and will help you be able to prove that cer­tain things happened.

For­mat: Try request­ing any infor­ma­tion in dig­i­tal form, if pos­si­ble (sound like you’re mak­ing it easy for them by allow­ing them to email it to you). This may work for lists of research grants, invest­ments and, in rare cas­es, for contracts.

Part 1 — Researching Investments

Note: Invest­ments are one of sev­er­al ways that cor­po­ra­tions can be con­nect­ed to your school. Invest­ment tac­tics are lim­it­ed in the fol­low­ing ways:

1. Invest­ments can only be used to affect pub­licly-trad­ed cor­po­ra­tions. Pri­vate­ly held cor­po­ra­tions can­not be invest­ed in and you’ll have to use oth­er tac­tics to affect them.
2. High schools, com­mu­ni­ty col­leges and oth­er small schools may not have sig­nif­i­cant invest­ments, if any. This means that invest­ment cam­paigns inher­ent­ly exclude low­er-income stu­dents and high schoolers.

If you’re at a col­lege or uni­ver­si­ty, your school most like­ly has a heap of mon­ey (par­tic­u­lar­ly in things called “endow­ments”) that it invests in the stock mar­ket to make mon­ey for the school. This mon­ey some­times grows on trees (if they invest in log­ging and paper cor­po­ra­tions) and it usu­al­ly grows at the expense of the envi­ron­ment, work­ers and con­sumers in gen­er­al. If you can get a list of your school’s invest­ments, you can com­pare the cor­po­ra­tions they invest in to the anti-social and anti-envi­ron­men­tal his­to­ries of these cor­po­ra­tions. You may find that your school holds stock in Shell Oil or Coca-Cola (both of which do busi­ness with a mil­i­tary regime in Nige­ria that mur­ders envi­ron­men­tal activists). Maybe your school is invest­ed in tobac­co cor­po­ra­tions or mil­i­tary contractors.

What­ev­er the case may be, your school can pres­sure these cor­po­ra­tions by no longer invest­ing in them or can hold these cor­po­ra­tions account­able by using the stock to vote to change the cor­po­ra­tion’s behav­ior. If you are real­ly ambi­tious, you may try to demand that your admin­is­tra­tion set up a stu­dent invest­ment review board that has the pow­er to over­see the school’s invest­ments and make sure that they use their stocks to encour­age cor­po­ra­tions to be less destruc­tive than they’d nor­mal­ly be.

How to find out?

To find out what your school is invest­ed in, you’ll need to fig­ure out who to ask. A good place to start is in your school’s admin­is­tra­tion build­ing. If it’s not obvi­ous, start by look­ing at a cam­pus map or by just ask­ing around until some­one points you in the right direc­tion. The admin­is­tra­tion build­ing is usu­al­ly where your col­lege pres­i­den­t’s office is. Once you’re in the admin­is­tra­tion build­ing, look to see if there is a finan­cial office oth­er than the type of office that would deal with stu­dent stuff (i.e. not your stu­dent loan office and not where you pay tuition).

If you can’t fig­ure it out eas­i­ly, stop in any office and do this:

1. Be con­fi­dent, calm and very polite. Dress a lit­tle nicer than usual.
2. Tell the per­son you see that you’re try­ing to find the office that deals with the uni­ver­si­ty’s investments.
3. After one or two ref­er­ences, you should be in the right place.

You’ll prob­a­bly need to ask a sec­re­tary your ques­tion first. Ask if this is the office that has a list of uni­ver­si­ty invest­ments, and who is the right per­son to ask for a copy of it. Gen­er­al­ly, some­one will appear from an office tucked away behind the sec­re­tary and will grant you a few min­utes of their pre­cious time. Some­times, you’ll be told that the per­son you need to speak to is out of town, in a meet­ing or oth­er­wise unavail­able. If so, find out exact­ly when would be a good time for you to come back and find this per­son. You may be giv­en a chance to set up a meet­ing with this per­son. If so, take it.

If you get to speak to some­one who knows about invest­ments, you’ll have to explain what you’re look­ing for. Here’s what you want to say:

“Hi. We’re inter­est­ed in get­ting a copy of the school’s investments.”

“Could you please explain which of the uni­ver­si­ty’s funds (like endow­ments and such) are invest­ed in stocks, bonds or mutu­al funds?”

Note: This is an okay time to act a bit igno­rant. If you’re too con­fi­dent here, they’ll be even more sus­pi­cious. Also, you want to give them a chance to feel the need to teach you how things work. You’ll want to have them teach you as much as they can, so you can learn the sys­tem. Take notes and ask as many ques­tions as you feel com­fort­able asking.

What NOT to do: Don’t con­fuse the school invest­ing in things like cor­po­ra­tions and World Bank bonds and such with “invest­ing in the school.” Near­ly all schools are non-prof­it and it’s not pos­si­ble to “invest in the school.” If you act as though you’re ask­ing how to invest in the school, they’ll think you’re crazy.

Expect to be inter­ro­gat­ed a bit and han­dle this as best you can. You may want to use this oppor­tu­ni­ty to ask whether the school has any sort of invest­ment poli­cies (some have poli­cies from the anti-Apartheid move­ment against the South African gov­ern­ment in the 1980s). Some schools have com­mit­tees which deal with invest­ment deci­sions. If so, find out who is on the com­mit­tee, how they get there, when/where their meet­ings are and how to get some­thing on their agenda.

Look not only for a list of the cor­po­ra­tions, bonds and mutu­al funds, but HOW MUCH is invest­ed in each one. And if they have a mon­ey man­ag­er like a bank invest­ing on their behalf, or are invest­ed in a mutu­al fund, you also want to know what they are invest­ing in. The school may claim that they don’t know what they’re invest­ed in, because it’s always chang­ing, but they can find out if they want­ed to and they can pro­vide a “snap­shot.” More on this below.

Many pub­lic uni­ver­si­ties have pri­vate non-prof­it foun­da­tions, like “Foun­da­tion for Blah Uni­ver­si­ty” or “Blah Uni­ver­si­ty Foun­da­tion,” which are sep­a­rate enti­ties from the school itself and han­dle some or all of the school’s invest­ments. This means that, even though it might be for a pub­lic school, the infor­ma­tion is pri­vate and you have no right to know.

If you’re at a pub­lic school, it’s pos­si­ble that it has both pri­vate and pub­lic invest­ment funds. Ex: Ship­pens­burg Uni­ver­si­ty of Penn­syl­va­nia has a pri­vate non-prof­it housed on cam­pus, which con­trols some of its own invest­ment funds, but the school itself also has its own (much larg­er) investments.

If all else fails: Start a “what are they hid­ing?” cam­paign. Get let­ters to the edi­tor into the cam­pus AND com­mu­ni­ty news­pa­pers, raise as much of a fuss as you can about why they’re hid­ing. Get the Stu­dent Gov­ern­ment and Fac­ul­ty Sen­ate to pass res­o­lu­tions in favor of an invest­ment dis­clo­sure pol­i­cy. Gar­ner as much sup­port as you can.

What to do once you have the infor­ma­tion: Once you get a list of your school’s invest­ments, you need to decide what you want to do with the information.

Divest­ment:
A divest­ment cam­paign involves con­vinc­ing your uni­ver­si­ty to sell their stock in a cer­tain cor­po­ra­tion in order to pres­sure that cor­po­ra­tion to change a cer­tain behav­ior. The threat to the com­pa­ny is that if enough peo­ple and orga­ni­za­tions sell that com­pa­ny’s stock, its val­ue goes down. They have an inter­est in mak­ing sure that cam­paign does­n’t become popular.

In the 1980’s, the famous (and suc­cess­ful) divest­ment cam­paign was Anti-Apartheid, the tar­gets were all cor­po­ra­tions doing busi­ness in South Africa or with the South African gov­ern­ment, and the behav­ior to be changed was sup­port­ing a racist gov­ern­ment (either direct­ly or with tax dollars).

In the 1990’s (and ongo­ing) a divest­ment effort against the mil­i­tary regime in Bur­ma involved cam­paigns against Pep­si­Co (which left Bur­ma after a high pro­file cam­pus-based cam­paign), Tex­a­co (which left after the Uni­ver­si­ty of Wis­con­sin at Madi­son sold over $230,000 worth of stock), Uno­cal (that cam­paign is ongo­ing), and many others.

Invest­ment:
“If gov­ern­ment was run like a busi­ness…” Heard that one before? Well, let’s think about it. If gov­ern­ment was run like a busi­ness, then when you walk into a vot­ing booth, you’d see a sign from the par­ty in pow­er telling you how to vote. All of the peo­ple who did­n’t even both­er to vote would be count­ed as vot­ing that way. Cor­po­ra­tions count non-votes as votes for what­ev­er the board of direc­tors rec­om­mends to its share­hold­ers. Orig­i­nal­ly, the rule for cor­po­rate vot­ing in Amer­i­ca was “one per­son, one vote.” Now it’s one piece of stock, one vote.

Some schools have a pol­i­cy of invest­ing based only on fidu­cia­ry con­cerns (a.k.a. only mon­ey mat­ters). In the 1980s, dur­ing the anti-Apartheid cam­paign, some schools adopt­ed social cri­te­ria for invest­ing their funds. You ought to check to see what invest­ment reforms may have been put in place by your school at that time.

Rather than have some­one at your school doing the dai­ly stock trad­ing, most schools hire pri­vate mon­ey man­agers to do this for them. Often these mon­ey man­agers are big banks. When you ask your admin­is­tra­tors for a list of your school’s invest­ments, you may be told that they don’t know, since the invest­ments are con­stant­ly chang­ing. Your school has the pow­er to ask their mon­ey man­ag­er for a list of what the invest­ments cur­rent­ly are. While invest­ments might change over time, they prob­a­bly aren’t chang­ing very much. Penn State Uni­ver­si­ty, after pres­sure from stu­dents, agreed this past year to start releas­ing a “snap­shot” of their invest­ments each sum­mer. You can ask for some­thing similar.

Anoth­er catch is that your school may have its mon­ey invest­ed in mutu­al funds. Mutu­al funds are funds run by pri­vate com­pa­nies who invest in a vari­ety of cor­po­rate stocks, ensur­ing more sta­bil­i­ty than invest­ment in a sin­gle stock. If your school has invest­ments in mutu­al funds, you’ll need to get them to do the same as with their mon­ey man­agers — get them to release a snap­shot of what they’re invest­ing in.

There’s a spe­cial cat­e­go­ry of mutu­al funds known as Social­ly Respon­si­ble Invest­ment (SRI) funds. These funds are run by out­fits which try to use their col­lec­tive stocks to vote in a “social­ly respon­si­ble” way when they have the chance. These SRI funds will also intro­duce share­hold­er res­o­lu­tions or “prox­ies” which stock­hold­ers can vote on. You can find infor­ma­tion on SRI cam­paigns at the web­site of the Sus­tain­able Endow­ments Institute

IF YOU SUCCEED:

If you suc­ceed in get­ting a list of your school’s invest­ments, please send a copy to SEAC by email or at SEAC, PO Box 31909, Philadel­phia, PA 19104–0609. SEAC can help you fig­ure out what cam­paigns you may want to engage in depend­ing on your school’s invest­ments. SEAC can also help you fig­ure out what cer­tain cor­po­ra­tions are doing which you may want to try to change.

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The author can be reached at 215–743-4884 or by email.

Lat­er parts of this arti­cle will even­tu­al­ly appear in upcom­ing issues of Thresh­old. Future arti­cles will cover:

• Pro­cure­ments (stuff that your school buys)
• Waste Con­tracts
• Research
• Stu­dents as Products
• Cam­pus Democracy
  
  

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Addendum to Part 1 — Weaknesses of SRI

It assumes that there are “good” cor­po­ra­tions and that invest­ment in cor­po­ra­tions is com­pat­i­ble with social progress.

Cor­po­ra­tions are designed in a way that is incom­pat­i­ble with social respon­si­bil­i­ty. The whole idea of a cor­po­ra­tion need­ing to make more and more prof­it over time in order to pay peo­ple who do NOTHING to earn that prof­it is flawed. It encour­ages the cor­po­rate behav­iors that we gen­er­al­ly oppose (abuse of labor, con­sumers and the envi­ron­ment). Mon­ey does­n’t grow on trees. Mon­ey IS trees. Mon­ey is the blood of work­ers. Mon­ey that is “made” through invest­ments is made by hurt­ing things we hold dear. “Social­ly respon­si­ble” cor­po­ra­tions only make things look less dam­ag­ing. Some­times they are less dam­ag­ing. That does­n’t change the fact that their activ­i­ties are still dam­ag­ing. Tru­ly social­ly respon­si­ble cor­po­ra­tions would not make any prof­its. Their prof­its would go back to their workers.

It does­n’t require peo­ple to chal­lenge capitalism/corporatism.

The notion that it’s accept­able to make mon­ey by doing noth­ing oth­er than hav­ing mon­ey is uneth­i­cal and should not be encouraged.

It helps green­wash the cor­po­ra­tions that look social­ly con­scious, which encour­ages oth­er cor­po­ra­tions to make them­selves look social­ly con­scious, when in real­i­ty, most of these “good” cor­po­ra­tions aren’t very good.

Sun Oil has signed the tooth­less “CERES” Prin­ci­ples. This act has allowed them to be con­sid­ered social­ly respon­si­ble by SRI firms. A real look at this oil cor­po­ra­tion’s behav­ior does not jus­ti­fy them being con­sid­ered respon­si­ble at all (no oil com­pa­ny deserves such a title). SRI firms help encour­age cor­po­ra­tions to pre­tend that they’re “green” or oth­er­wise social­ly respon­si­ble, even when they’re not. A good hard look at Ben & Jer­rys, Body Shop, Green Moun­tain Ener­gy or most oth­er “good” com­pa­nies shows that they aren’t much dif­fer­ent in their behav­ior from oth­er com­pa­nies that fight unions, sell unhealthy prod­ucts, and lie to con­sumers about the eco-friend­li­ness of their prod­uct (yes, these are real exam­ples from these com­pa­nies and are only the begin­ning). For info, vis­it the pages on these com­pa­nies in the Cor­po­rate Dirt Archives at www.corporations.org

Shift­ing invest­ments from one set of “bad” cor­po­ra­tions to “good” or “bet­ter” cor­po­ra­tions does­n’t pres­sure any spe­cif­ic cor­po­ra­tions to make spe­cif­ic changes. Only focused cam­paigns on cer­tain cor­po­ra­tions over cer­tain issues can cre­ate the sort of pres­sure that is need­ed to get cor­po­ra­tions to change spe­cif­ic behaviors.

If a school stops invest­ing in a set of 100 com­pa­nies and shifts those invest­ments to some­thing else, the spe­cif­ic cor­po­ra­tions in those 100 aren’t going to think that they need to react to spe­cif­ic cam­paigns against them. Uno­cal isn’t going to all of a sud­den pull out of Bur­ma, Afghanistan or Cana­da or reduce their pol­lu­tion in Cal­i­for­nia. It takes spe­cif­ic, tar­get­ed cam­paigns to get cor­po­ra­tions to change their behav­ior over a stock action.

SRI Mutu­al Funds can be use­ful if they do lots of proxy actions, but with­out that proxy work, their invest­ment shift­ing makes no pos­i­tive social difference.

It does­n’t help democ­ra­tize a school’s invest­ment deci­sions to trans­fer invest­ment deci­sions from the school to an out­side invest­ment firm. All it can do is help ensure that stock will be vot­ed on respon­si­bly at schools where stu­dents are inca­pable of get­ting demo­c­ra­t­i­cal­ly elect­ed invest­ment boards set up to make those deci­sions themselves.

Divest­ment is a pow­er­ful tool as well and should not be dis­card­ed with the assump­tion that “engage­ment” is more productive.

Divest­ment can be as pow­er­ful or more pow­er­ful than stay­ing invest­ed in order to vote on proxies.