A University of Texas columnist fired the first shot April 10 in a new battle against universities’ multi-billion dollar investment ties to both terrorist and totalitarian regimes.
The opinion page of The Daily Texan featured a column by UT student Forrest Wilder entitled “UT’s Questionable Corporate Ties,” which called on the University to stop supporting terrorism in its investment policies.
“We must force our University to adopt ethical standards when using public money, dispensing contracts or doing business with individuals and corporations,” said Wilder.
While students may differ in the degree to which they share Wilder’s convictions on the issues, few would argue with his view that universities have a responsibility to consider key social justice issues in their investment decisions.
With regard to socially responsible investments, universities in this country may be in default. In the case of the University of Texas, the school may be contributing, directly or indirectly, to threats against American national security through its endowment investments. How widespread the practice is among American universities is yet to be determined, but if Texas is a bellwether, then it’s conceivable that many American universities are investing their money in companies that enrich regimes that sponsor terrorism, seek to develop weapons of mass destruction, and systematically abuse human rights.
The odious governments of Iran, Iraq, Syria, Libya, Sudan, and North Korea—listed by the U.S. State Department as state sponsors of terrorism—are among those benefiting from universities’ investment dollars.
According to the Investor Responsibility Research Center, the world’s leading provider of impartial information to the markets, approximately 300 publicly traded firms are doing business in or with these terror sponsors. Approximately 20 percent of these firms are based in the United States and are some of the largest companies in the world.
According to media reports, companies such as Total Fina Elf of France, Royal Dutch/Shell, Siemens AG of Germany, Mitsubishi of Japan, and American firms Conoco and General Electric all have business ties to terrorist-sponsoring governments.
So does the University of Texas, through its investment portfolio. In the Texas case, here’s how it works.
Syria is known as the principal financial backer and political sponsor of the Islamic extremist organization Hezbollah (Party of God), which has claimed responsibility for countless hijackings, bombings, and kidnappings against Americans and Israelis alike.
Despite Syria’s terrorist links, Houston-based energy company Conoco, in partnership with Total Fina Elf, began producing gas from the eastern Deir e-Zour region of Syria in the first quarter of 2002. Royal Dutch Petroleum and PetroCanada are likewise allied with the state-owned Syrian Petroleum Company. This partnership, known as Al Furat Petroleum, accounts for 60 percent of Syrian production, and oil revenues typically account for 60 percent of Syrian export revenues.
Meanwhile, in Sudan—the China National Petroleum Company (CNPC) and its subsidiary, PetroChina, have been active since August of 1999. PetroChina is apparently unconcerned with Sudan’s active human slave trade. The company has reportedly helped attract revenues of approximately $200 million a year to the Sudanese government. In addition to its involvement with human slavery, this is the same Sudanese government that has granted asylum to hundreds of known terrorists, including Osama bin Laden.
Sudanese strongman Hassan al Turabi has advertised his intent to use the profits from CNPC’s operations to stockpile tanks and missiles for use in his genocidal assault against black Christians and animists in the south of that country, which has already claimed the lives of more than two million people.
The University of Texas is directly linked to all of this.
The University of Texas Investment Management Company (UTIMCO) manages the University of Texas’s investment portfolio. A review of the UTIMCO’s portfolio reveals that the UT System owns stock in a number of these companies that provide money and advanced technology to terrorist-sponsoring governments. These companies include Total Fina Elf and Royal Dutch Petroleum.
But Texas also has an affinity for the Sudanese brand of oppression—PetroChina is one of UTIMCO’s largest holdings. Texas holds approximately 10 million shares for a total investment of approximately $215 million in this company with links to the slave trade.
Sudan’s slave trade is no secret to the United Nations and shouldn’t be to the University of Texas. In March of this year, Gaspar Biro, a specially appointed United Nations human rights monitor, returned from the Sudan to report that " . . . abducted children are often sent to camps that become twentieth century slave markets. The price varies with supply. According to the Economist (January 6, 1990) in 1989, a woman or child could be bought for $90. In 1990, as the raids increased, the price fell to $15.”
The New York Times reported in 1994 that “Arab militias, armed by the Government, raid villages, mostly those of the Dinka tribe, shoot the men and enslave the women and children. These are kept as personal property or marched north and sold [and] many of the children are auctioned off.”
The Sudanese government is criminal by any measure. A 2000 Amnesty International report concerning government action against civilians reports that “government troops cleared the area around the town of Bentiu using helicopter gunships, some allegedly piloted by Iraqi soldiers, and aerial cluster bombardment by high-altitude Antonov planes. In addition to the air attacks, government troops on the ground reportedly drove people out of their homes by committing gross human rights violations; male villagers were killed in mass executions; women and children were nailed to trees with iron spikes.”
More than just human rights concerns are involved here. The University of Texas’s—and likely other universities'—heavy involvement in Sudan and Syria raises serious security concerns. Two primary security concerns are associated with universities and companies partnering with terrorist-sponsoring states.
First, many companies are providing billions of dollars in revenues to “bad actor” governments that may be used in any manner. Due to the fungibility of money, these revenues could be helping to fund terrorist groups or to develop weapons of mass destruction. A similar concern underpinned the South African divestment campaign of the 1980s. In that case, the argument was that as long as the South African government supported apartheid, any corporate revenues realized by the government helped to perpetuate that racist regime. Accordingly, many universities chose to divest themselves of stock in companies doing business in South Africa.
Second, these American firms are, in many cases, providing advanced technology and equipment to these governments through their business operations. In the context of the war on terrorism, isn’t it appropriate for Americans to know that certain of their companies are providing militarily useful equipment that may be used against our own troops in the future? Or in another, even more horrific, terrorist attack on the United States?
The University of Texas system’s corporate ties to nations that support terrorism and human rights abuses could be the tip of the iceberg in American academia. How many other American universities hold investments in states that systematically abuse human rights and sponsor terrorism?
As of June this year, the University of Michigan owned 9,400 shares of stock in Total Fina Elf and 105,500 shares of Royal Dutch Petroleum, for a total market value of $5.8 million invested in companies doing business in terror-sponsor Syria.
Yale University, too, may be involved in Sudan, although piercing the veil of that school’s investments is difficult. Yale University owns 90 percent of Tercentennial Energy Partners, LP. Tercentennial’s managing partner, Peter K. Seldin, invests money for Yale and other clients in various United States and Canadian Stocks. Seldin himself claimed to own $56.2 million in Talisman Energy stock as of March 31 of this year.
It is not clear whether this Seldin investment includes Yale money. While U.S. policy prevents U.S. companies from doing business in Sudan, Canadian companies have found Sudan lucrative. Talisman is Canada’s largest independent oil company, and it owns 25 percent of Sudan’s largest oil concession. In 1999, Yale’s endowment received shares of Talisman when Talisman took over Highridge Exploration Ltd., a smaller Canadian oil company. At the time of this merger, Yale’s Tercentennial owned 5.6 percent of the outstanding shares of Highridge, and received 86,218 shares of Talisman stock, worth $3.8 million. Prior to the merger, Seldin-related entities already owned 285,000 shares of Talisman stock.
Talisman Energy is one of the chief examples of a company that brings benefits to the Sudanese regime. The case is very similar to that of PetroChina.
Texas, Michigan, Yale. Considering that many prominent companies in the markets do business with odious regimes, it is likely that a majority of major universities also invest in many of them. But no systematic study has been conducted.
That could change.
Grassroots student activism has a strong track record for effecting prudent corporate change. In the 1980s, college activists nationwide band-ed together to demand that their universities divest from companies that supported the racist South African government. The resulting campaign contributed mightily to the demise of the apartheid regime.
Such a movement could be similarly effective with regard to investments in companies supporting terror-states. Students can pressure universities by observing the adage that “sunlight is the best disinfectant.”
Lists of a public university’s holdings can be obtained by filing a Freedom of Information Act request with the campus budget office. When a university’s dealings with terrorist countries via investment portfolio are discovered, major media outlets should be contacted. The names of those responsible for investment decisions should be publicized so as to catalyze a change in policy.
Most importantly, university investment officers should be contacted personally and urged to drop all holdings in corporations that funnel revenues to terrorist-sponsoring governments. If administrators refuse to act promptly, demonstrations should be mounted to focus public attention on the willingness of universities to protect investments at the expense of our vital national interests.
Ultimately, regimes that sponsor terrorism will be forced to weight their malfeasant activities against economic isolation—and that’s when America really starts winning the war on terrorism.