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Princeton University Archives

Student activists campaigning for divestment—from fossil fuel companies, weapons manufacturing companies, or companies operating in the Israeli-occupied West Bank—must face an administration that for decades has refused to acknowledge the central point at the very core of any divestment campaign: that the university’s investments should be considered as part of the university itself. The debate over the proper approach to the university’s financial interests dates back to the divestment campaigns targeting apartheid South Africa, and it will not be going away anytime soon.

The recent flurry of petitions and letters related to divestment issues may seem like a high point of campus political activity. But while difficult to imagine today, Princeton’s campus was once wracked by tension and protests against the South African government, and in favor of divestment from companies doing business with the apartheid regime. The Rev. Jesse Jackson appeared on campus during a mass demonstration to call for divestment. In 1985, ninety Princeton students were arrested during a campus protest against the South African government.

In an interview with PBS, William G. Bowen, who served as Princeton’s president from 1972 to 1988, described the “searing debates over South Africa and whether divestment was an appropriate response to apartheid.” Bowen was a notable opponent of divestment who argued, “what may be right action for an individual may not be right action for this kind of university.”

Bowen framed the politicization of the university’s investments as a matter of intellectual freedom and openness to debate. Responding to a student petition calling for divestment, Bowen stated, “the university itself advances important causes by assuring that both their champions and their opponents have a full opportunity to argue their cases. This requires institutional restraint and a willingness to differentiate between the right of the individual to argue vigorously for what he or she believes and the obligation of the institution to remain open in fact and in appearance to different points of view.” For Bowen, and for other university administrators at the time, that the university facilitated human rights abuses through its financial investments had no bearing on the educational mission of the university or the kinds of debate about those human rights abuses that the University might host.

In the end, despite Bowen’s disapproval, Princeton’s trustees eventually decided on a policy of “selective divestment from South Africa,” pledging to divest only from “a company whose behavior has been found to represent…a clear and serious conflict with central values of the university.”

Since the its decision to divest from companies working in apartheid South Africa, the University has pursued a policy of divestment only in two other instances: in 2006, divesting from companies it believed to be complicit in the genocide in Darfur, and more recently in 2012, divesting from HEI, a hospitality firm accused of severe workers’ rights violations.

When the University publicly agreed to prohibit future investments with companies implicated in the genocide in Darfur, it claimed to have no direct investment ties to companies involved in the conflict. The Resources Committee, it turned out, had been contemplating divestment from companies operating in Darfur since the fall of 2005.

“We needed to be persuaded that genocide was indeed occurring,” then-President Shirley Tilghman told the Daily Princetonian, “and that this had been so for some time. Furthermore this seemed to be an issue around which there was a consensus on campus.” Despite the overwhelming evidence that a severe and destructive human rights crisis was taking place in Darfur, the University’s decision to publicly announce its divestment only came after similar public decisions made by peer institutions, such as Harvard and Yale.

In 2012, the University again followed peer institutions’ decisions to stop investing in HEI, a hotel management company that had been accused of abusing its workers. After the University’s Resource Committee’s decision to divest, the Daily Princetonian reported that Princeton University Investment Company president Andrew Golden, denying the students’ role in the decision, maintained “the decision was not a result of student advocacy.”

Golden claimed, according to the Daily Princetonian, that “while some students have urged the University to curtail its investments in HEI, the issues underlying the students’ recommendation have not met the standards outlined in the [University’s investment] guidelines.” The University insisted that it had disinvested from HEI for strictly economic reasons, rather than out of concern for workers’ rights. This makes the HEI divestment case very different from the case of Darfur, which the University felt compelled to frame as an ethical matter.

The Princeton University Resources Committee publishes a document titled “Guidelines for Resources Committee Consideration of Investment-Driven ‘Social Responsibility’ Issues.” The quotation marks around the words social responsibility are theirs. The document claims, “these guidelines are intended to help the Committee determine which issues warrant monitoring by the Committee and a possible recommendation to the Trustees for further action, in contrast with the vast majority of stockholder issues on which the University should remain silent.”

The document is fairly explicit: it exists because of the anti-apartheid campaigns in the ‘80s. But the criteria that it provides “for exceptions to the stated investment policies and procedures” are rather ambiguous. Proposals must show “considerable, thoughtful, and sustained campus interest” in the issue, demonstrate that “a central University value [is] clearly at stake,” and “make a clear and explicit connection between the general core values of the University and the specific corporate policies and practices.” The problem is that the document does not define “considerable, thoughtful, and sustained campus interest” or the University’s “core values.”

In late November 2012, a student group called the Princeton Coalition for Endowment Responsibility (PCER) proposed to reform the process by which the Resources Committee determines exceptions to its stated investment policies. According to the report published by the Resources Committee explaining its decision to reject PCER’s proposal, “PCER argues that in order to develop and demonstrate ‘sustained campus interest’ in specific investment issues, the campus community must have access to University investment information.” The report also noted that PCER proposed to establish “a multi-step process that would define ‘core University values’ and a process of initiative and referendum that would trigger Resources Committee review of specific investment issues.”

In its explanation of why it rejected the proposal, the Resources Committee report explained, “with regard to the establishment of core University values, the RC believes that these principles have been, and continue to be articulated by the University. These enduring values can be identified in a number of documents and are frequently repeated in formal actions and statements of the University.”

Yet despite the committee’s claim that the values were so obvious that there was no need to define them, it felt no need to mention what those apparently obvious values were anywhere in the report. As a concession, the committee agreed to publish on its website a calendar of its meetings for the upcoming academic year.

In the wake of the Sandy Hook school shooting, 113 Princeton faculty members submitted a petition to Shirley Tilghman (who was president at the time) calling for the university to divest from companies that manufacture weapons. The Resources Committee met in April 2013 to consider the petition and rejected it. “In short, the petition needs to be more specific in identifying the actions of the companies that the university should find objectionable—that is, the actions that violate core university values—to make a strong case for divestment.” The Resources Committee report went on to explain that because the police and the military needed weapons to protect citizens’ security, the petition could not make the case that the manufacturing of weapons violated any core university value. The Resources Committee seemed to take the old NRA line, “guns don’t kill people, people kill people.”

And just to add to the sting of rejection, the report disclosed “that at present, the University does not have any direct holdings in companies that manufacture weapons.” Because the University refuses to release to the public the names of companies in which it has direct holdings, it is impossible to know the extent of the University’s involvement in a particular issue. This lack of transparency often leads to absurdity. In the case of weapons manufacturers, the 113 faculty members, many of them senior professors, wrote a petition to divest from companies that it turned out the University did not even invest in.

The ambiguity of the Resources Committee’s criteria leaves decisions about what they actually mean to the committee’s discretion. This makes it nearly impossible for students and faculty who petition the committee to know what exactly they need to do. It is unclear what constitutes sustained student interest. And while the committee, in response to the PCER proposal, stated that the core university values could be found in “a number of publications and reports, including the Wythes Report, the President’s Advisory Committee on Internationalization, the Report on Sustainability, the Campus Plan and others,” it offers only incredibly broad and vague guidance as to what these core values might actually be. The Resources Committee, it seems, intentionally stymies student agency.

The tactic of divestment goes to the heart of two major differences in the way student activists and campus officials view the endowment.

The first is the relationship between the university and its investments. Student activists claim that a university’s investments cannot be treated as separate from the university itself. Endowments are inherently political, and the companies a university chooses to invest in reflect the conscious choices of the university’s board of trustees. Or, in the case of indirect holdings, the board of trustees and Resources Committee make a conscious choice to let the endowment be invested in certain things. Social and ethical concerns, supporters of divestment argue, should be taken into consideration when deciding which companies to divest in.

But administrators and investing advisors maintain that the university as an educational institution should be viewed as separate from the financial arrangements that sustain it. They voice concerns that divestment campaigns would turn university endowments into platforms for political statements, making it difficult to focus on their primary responsibility: ensuring the best possible financial future for the university.

The second is the issue of transparency. At many schools, and at Princeton in particular, the practices of the endowment and the investors responsible for it are largely unknown; the question of which companies the university invests in is one that is typically left unanswered by university officials.

Many argue that the opacity of university endowments makes it impossible to assess the school’s ethical responsibilities, and that in cases like the campaign against apartheid, divestment proved to be an important political tool. University officials insist, somewhat unconvincingly, that the lack of transparency is important in a highly competitive financial world. An article in the Daily Princetonian reported that, “according to University Spokesperson Martin Mbugua, the University does not discuss the specifics of its portfolio, citing the need to maintain a ‘competitive edge.’”

Any successful divestment campaign will need to overcome significant barriers that the University has created. It will need to, beyond the shadow of any doubt, convince administrators and investment managers that it is not only the right decision ethically, but also benign—if not beneficial—financially. It will need to make the case to the University administration and the community that decisions regarding the endowment should consider ethical and social concerns. And, perhaps most difficult, it will need to convince the students that they are implicated in the human rights abuses and environmental degradation the endowment facilitates—and that this a reason for them to take action.