The University of Texas Investment Management Company has refused to act on students' calls to divest from Sudan.
The management company is the first corporation formed by a public university and oversees investments in UT funds, Texas A&M University funds and other assets.
At the Oct. 12, 2007 Board of Regents meeting, member of The White Rose Society and sociology junior Natasha Levinsohn proposed that UTIMCO funds be withdrawn from Sudan. The society opposes genocide and monetary investments that could fund genocide in foreign countries. More than 1,000 students, faculty and staff signed the society's petition and wrote letters to the UT System Board of Regents calling for UTIMCO to divest from the country, Levinsohn said in a letter to board Chairman H. Scott Caven.
Bruce Zimmerman, chief executive officer of UTIMCO, said in a letter to Caven that his concerns stemmed mainly from the fear of ramifications of "social investing" and the small amount of funds UTIMCO holds in Sudan-related companies.
"The primary issue here is whether social and political situations should factor into our investment policy. We think that is a very dangerous precedent, a slippery slope," Zimmerman said. "It's not about Sudan; it's about every issue in the world that every interest group in the world might want to try to bring pressure to bear through influencing investment policies."
Zimmerman listed alcohol, tobacco, pornography, nuclear proliferation and environmental concerns as examples of issues that may contribute to a slippery slope, in his letter to Caven.
"But the thing is, is that this campaign shouldn't really have that slippery slope effect," Levinsohn said. "Those kinds of activists have always been around and will always be around, so this wouldn't change that, in my opinion."
Zimmerman said whether these issues will always be around is questionable.
"There was a period of time in the U.S. when alcohol was banned," he said. "It was in the constitution and so to say, 'Well, this issue has always been around, it will always be around,' … gosh, I don't know."
Zimmerman said there are two types of investments UTIMCO makes. One investment allows a manager to invest through an index, or list of top companies in the world, and the other allows a manager to handpick individual stocks. Some of the companies in Sudan are part of an index, limiting UT Regents' power to select companies not
located in genocide countries.
"For example, we have some money in what are global equity indexes, and those indexes are comprised of hundreds or whatever number of the largest companies in the world," Zimmerman said. "Well, that will include some of the Chinese oil companies, and those are the ones that are kind of on the [Sudan Divestment Task Force] list."
Of all companies on the list, UTIMCO invests the most money in Weatherford International Ltd., a Houston-based oil company, Zimmerman said.
"At the end of October, of our $25 billion, roughly $6 million was invested in Weatherford," he said. "Now the last thing I'll say on Weatherford that I think highlights the complexity of these issues is that we were looking at the Sudan task force list of companies and Weatherford was on that list, but then the State of Texas Comptroller came out with a list of companies doing business with Sudan, and Weatherford wasn't on that list."
In September 2007, Weatherford International announced the company divested from Sudan, three months before the Texas State Comptroller list of Texas companies in Sudan was released in December.
