Despite angry complaints from campus employees that their retirement benefits could be jeopardized, officials at California State University, Northridge, voted Wednesday to sever ties with companies that have business connections to racially segregated South Africa.
The unanimous vote by trustees of the California State University, Northridge, Foundation, was taken at a special meeting demanded by about 80 students who in April held a "sleep-in" in the school's administration building to protest South Africa's system of apartheid.
The order to divest stock in firms with South African ties applies only to the foundation, a nonprofit corporation chartered by the state to operate the bookstore, food concessions and vending machines at the Northridge campus.
$13.2 Million Invested
The foundation has $13.2 million invested in stocks and bonds. The investments consist of a fund to pay for pensions for about 85 employees, a capital improvement fund and a fund set aside to cover future operating deficits.
"We can't go on making money off firms that prop up a racist government," said student body president Zeke Zeidler, a leader in the campus anti-apartheid movement and a student trustee of the foundation. Other trustees represent the faculty and administration.
Foundation director Donald Queen said that 21 of the 76 firms in which the foundation owns stock have ties with South Africa. But Queen said he had "no idea whatsoever" how much of the $13.2 million in stocks and bonds was from the 21 firms.
Zeidler, however, said that his study of the foundation's stock portfolio indicated that $2.3 million of the $13.2 million is invested in firms with South African ties.
The drive to sever ties with South Africa-connected firms has inflamed campuses across the nation in recent weeks.
Trustees of both the 19-campus California State University system, which includes the 28,000-student Northridge campus, and the nine-campus University of California system have ordered studies on the effect of selling off stock in such blue-chip firms as Bank of America, IBM and Motorola.
Disagreement on Effect
Financial experts have disagreed on whether forced divestment is likely to harm an institution.
Claiming to speak for a majority of the 85 foundation employees who could be affected by divestment, Mary Marcinik, a bookstore supervisor, said she deplored people who "take actions that financially affect people other than themselves in order to make a political statement."
Marcinik challenged opponents of apartheid to make personal sacrifices to protest South Africa, rather than use the employee retirement system as a vehicle for protest.
To applause from 30 fellow employees, she asked: "Will you stop reading the major newspapers that are sold in South Africa? Will you divest your watches that contain gold from South Africa, sell your automobiles that contain chrome and other metals from South Africa, stop reading books sold by publishers who sell books in South Africa, stop using computers and calculators that are sold in South Africa, stop eating and drinking foods sold in South Africa?"
Pension Fund Exempted
Foundation trustees agreed to exempt the pension fund from the order to sell off all stocks and bonds from firms that do business with the white-dominated African nation. But the exemption failed to mollify the foundation employees because future pension fund investments will have to comply with the order.
"I resent people tampering with my pension money," bookstore manager Lou Herbst said.
The divestment order, which must be complied with by July 1, 1986, applies to funds held for expansion of the bookstore and other campus facilities and funds set aside to cover operating deficits.
The trustees also directed the foundation staff to report back in September on the effects of immediate divestment of pension-fund stocks in South Africa-connected companies.
Foundation officials said the pension-fund exemption is not very significant, however, because as much as 90% of all stock is sold each year by outside investment managers who handle the foundation's money.
Thus, the ban on future investments in South Africa-connected companies will have almost the same effect as the divestment order, they said.
The divestment order also applies to banks that loan money to firms that do business in South Africa.
About 100 students opposed to apartheid attended the meeting, including about 50 who marched across campus carrying protest banners.
Kaveh Kamooneh, a senior philosophy major and anti-apartheid leader, said, "There are more than 9,000 major firms that refrain from South African ties, and 284 that have such ties. It doesn't seem like it should be a major problem."