Washington Week: Student Voices (O)

U. Colorado officials identify offending investments
By Paula Pant
Colorado Daily (U. Colorado)
01/05/2007

(U-WIRE) BOULDER, Colo. — The University of Colorado has identified $360,000 of its investments in companies that do business with the Sudanese government.

CU began examining its assets after the Board of Regents in December voted to divest in Sudan in order to apply economic pressure to the African nation to end genocide in its Darfur region.

As of Dec. 26, CU had combed through 85 percent of its assets, which total between $1.2 to $1.3 billion.

The school found two "offending" investments, said CU Treasurer Don Eldhart, which include a $300,000 security in the Rolls-Royce Ltd. Group in a Vanguard International Growth Fund and a $60,000 security in China Petrochemical in a Vanguard International Value Fund.

CU also had a $200,000 investment in a Zurich-based "offending" company but Vanguard already sold that investment, said Eldhart.

CU has a total of $90 million invested in three Vanguard funds, about $80 million of which is in Vanguard international funds. The offending companies lie in these international funds.

For a company to be considered "offending" it must meet three criteria: It must do business with the Sudanese government, fail to contribute to the well-being of the Sudanese civilians and fail to take substantive action to stop the genocide, according to Scott Wisor, President of Divest Colorado.

Eldhart said he contacted Vanguard managers in mid-December to ask them to provide CU with Sudan-free investments. If they cannot do so within a few months, said Eldhart, he will search for a "financially equivalent alternative."

"They (Vanguard) are very sensitive to the investors, but for one investor only they're probably not willing to make a change," said Eldhart.

CU is the first state-funded institution in Colorado to divest from Sudan. The state of Colorado will discuss divesting its assets in the 2007 legislative session.

Around 30 universities in six other states divested prior to CU's move.

Eldhart said Vanguard is more likely to create a new Sudan-free portfolio than to change an existing portfolio.

"It's easier to start a new fund that would be Sudan-free than get all the shareholders in a fund to vote for a change," said Eldhart. "If Darfur lingers for a long time, Vanguard may come to that decision."

If it doesn't, Eldhart said he'd look for investments that diversity CU's portfolio in a similar manner and that yield a comparable return.

"There is a fiduciary responsibility that goes along with managing money that responsibility never goes away," he said.

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