Mayor Orders Pension Planners Out Of South Africa Funds
LOS ANGELES (AP) _ With Nobel laureate Bishop Desmond Tutu at his side, Mayor Tom Bradley ordered pension commissioners in the second largest U.S. city to divest nearly $700 million in investments to pressure South Africa to change its racial policies.
″These commissioners will support the policies of the mayor or another set of commissioners will,″ Bradley declared Friday at City Hall as he stood by a beaming Tutu, the 1984 Nobel Peace Prize winner and a leader of the movement against South Africa’s racial segregation policy of apartheid.
Commissioners have been asked to devise divestment plans for $697 million worth of pension funds now invested in companies that do business in South Africa.
The funds, those of the fire and police departments, the department of water and power and other city employees, total more than $4 billion.
″It is feasible and it will be done,″ Bradley said.
Tutu, 53, avoided voicing support for divestiture because to do so is an indictable offense in South Africa, where a government chosen by voters among the 5 million whites dominates a country where 22 million blacks live.
The Anglican bishop did, however, criticize those who say that removal of U.S. businesses from South Africa would hurt blacks.
″I have said quite a few times that people ought to stop using us, South African blacks, as alibis for not doing what they know they ought to do,″ he said.
Bradley’s threat to fire pension commissioners if they failed to follow his plan was not idle, said his spokeswoman Ali Webb.
″The mayor was demonstrating that he is committed to these sanctions,″ Ms. Webb said.
In August, Bradley replaced 120 of the 170 commissioners he appoints, including members of the three pension boards.
On Tuesday, Bradley announced his intention to order the divestiture, and he proposed keeping money out of banks that make loans to the South African government or corporations that do business there, sell that country’s gold Krugerrand coins or have branch offices in South Africa.
He had asked the city attorney in January for a ruling on whether the city legally could divest, and Acting City Attorney Gary Netzer last week came back with a positive response, Ms. Webb said.
″We’ve been working on this plan since January, but we didn’t go out with it until we got the report from Netzer,″ Ms. Webb said.
Deputy city attorney Fred Merkin said law requires the city to invest its funds prudently. Bradley told the commissioners Tuesday that he believed divestiture could be accomplished ″in a manner consistent with your fiduciary responsibilities and with the prudent investor rule.″
Commissioners for the fire and police pensions, the largest pension groups, decided Tuesday to hire a consultant to help reinvest the funds, pension investment officer Allan Moore said. The two pensions have $1.7 billion in assets, of which $304 million would be affected.
The city employees’ pension commissioners planned to meet Tuesday to discuss the fate of the $245 million affected in their $1.3 billion portfolio, general manager Jerry Bardwell said.
The water and power department’s pension commissioners will not meet until Thursday to discuss the affected $148 million in their $1.05 billion portfolio, pension manager Richard Goss said.
Apartheid forces South Africa’s black population to live in government- create d ″homelands,″ use segregated facilities, and denies them equal jobs, pay and voice in government.
Tutu said people in his country were aware of anti-apartheid protests and calls for divestment in the United States in recent months.
″It has a profound effect on the morale of the victims of apartheid and on the morale of the perpetrators of apartheid,″ he said.