SACRAMENTO — A potential difference of views is percolating between the Presbyterian Foundation and the Mission Responsibility Through Investment program of the Presbyterian Church (U.S.A.) — a situation with implications for the PC(USA)’s controversial plan to consider divesting in some companies doing business in Israel.
The discussion involves the question of who actually owns the investments of the church that are managed through the Foundation and its trust company — and who has the authority to negotiate with companies if divestment is being considered and to decide what divestment actions to pursue.
In the past, that kind of negotiation has been conducted by MRTI, although the General Assembly has to approve any recommendation MRTI makes to divest. If the assembly agrees with the MRTI proposal, it passes a resolution urging the investing agencies — the Foundation or its trust company or the Board of Pensions of the PC(USA)– to divest, which so far the Foundation always has done.
But at the Foundation’s meeting this week in Sacramento, the Foundation set up a Social Witness Committee — its own social responsibility committee, to consult with MRTI and to make recommendations concerning social investment and the foundation’s portfolio.
The New Covenant Trust Company, a wholly owned subsidiary of the Foundation that also manages investments for the PC(USA), intends to set up a similar committee as well.
That raises concerns about what might happen if MRTI wanted to go in one direction, and the Foundation disagreed — a question that’s particularly pertinent because the PC(USA) has begun a controversial process of considering phased, targeted divestment in some companies doing business in Israel, in response to a resolution the General Assembly passed last year.
“We are obviously treading on touchy ground here,” Foundation board member Steve Martin said at the Foundation’s meeting Sept. 24.
Whether any disagreements between MRTI and the Foundation might actually materialize remains to be seen. A similar question potentially could be raised regarding assets controlled by the Board of Pensions as well.
Bill Somplatsky-Jarman, who staffs the MRTI program, declined to comment because he hadn’t received any information on the Foundation proposal.
“We’re not speculating on any disagreements with MRTI,” Robert Leech, Foundation’s president and chief executive officer, said at the Foundation meeting. He said the Foundation and MRTI have always worked cooperatively with each other, and “I hope it will continue.”
But Leech also said in an interview that the Foundation and New Trust own the stock — “the church does not own the stock,” and they have a responsibility to be accountable to their shareholders. MRTI can’t approach companies to talk about the stock holdings “as if they were the stockholder. They can’t get inside without our permission,” he said.
Leech told the Foundation board that “we’re going to listen to MRTI. We also have to listen to our donors” and board members — who he said in the interview are “all over the map” regarding possible divestment in Israel. “I’m getting letters from all sides.”
The proposal that the PC(USA) consider divesting in some companies doing business in Israel, to protest connections those firms may have with the ongoing violence and political difficulties in the Israeli-Palestinian struggle, has proven extremely controversial — it’s been condemned by Jewish groups, provoked headlines around the world and strained relationships between Presbyterians and Jews in communities across the United States.
In August, MRTI identified five companies — Caterpillar, Citigroup, ITT Industries, Motorola, and United Technologies — that it contends have links to the violence in Israel and Palestine and to Israel’s occupation of Gaza and the West Bank.
Somplatsky-Jarman has said MRTI would, before making any recommendations to divest, first attempt to negotiate with those firms and try to convince them to change some business practices and involvements.
But Dennis Murphy, the Foundation’s executive vice president and chief executive officer, said in an interview that MRTI “can always talk to a company,” on behalf of the denomination, “but it’s inaccurate for them to say, `We own 330,000 shares of Citigroup.’ “
Murphy said “United Technologies contacted us,” saying the PC(USA) doesn’t own any stock in that company, and “we want to be able to say we’re the ones that own it.”
And he said the Foundation board “wanted to make sure it had full information” of what divestment actions were being considered and why.
The MRTI committee will meet next in Chicago in November.