When I and four other members of Georgetown, Divest!, met with university administrators last Friday, we made a startling and unpleasant discovery about the university”s endowment. We initially approached the university with the intention to find out the details of its policy on socially responsible oversight of endowment investments. We wanted to figure out how the oversight process works so that we would understand how to best demonstrate why Georgetown should divest from certain companies that are profiting from human rights abuses in Israel and the Occupied Palestinian Territories.
As of March 13, 2010, the Web site of Georgetown University”s Investment Office posed this question on its Frequently Asked Questions page: “What is Georgetown”s policy with regard to socially responsible investing?”
The site provided the following answer: “Georgetown is strongly committed to investing in a socially responsible manner. To that end, the university Faculty Senate appoints members to the Committee on Investments and Social Responsibility, which is charged with reviewing all shareholder proposals on social responsibility.”
In response to a question on Jesuit values also on the site until March 13, the investment office gave this answer: “The Committee on Investments and Social Responsibility, which includes one representative from the Office of Campus Ministry, takes Georgetown”s Jesuit identity into account when making decisions regarding shareholder proposals.” The page also included comments on the strengths of the university”s Jesuit heritage.
From this starting point, we decided to present to the Committee on Investments and Social Responsibility, as it appeared to be the body relevant to ethical oversight of the endowment. By the end of our meeting last Friday, however, it was obvious that we couldn”t be more wrong.
Chief Investment Officer Larry Kochard and Senior Vice President for Strategic Development Daniel Porterfield quickly made it clear to us that the Committee on Investments and Social Responsibility is hardly the vigorous institution for which we had hoped. They explained that the committee only has jurisdiction over the investments of the Georgetown University Student Investment Fund, which manages $350,000, and not the entire endowment, which approaches $1 billion. Kochard informed us that the committee is used simply to elect proxies to send to shareholder meetings on behalf of the student investment Fund.
This painted a rather different picture than the one we had found on the investment office Web site. We pointed this out, and Kochard explained that the Web site might reflect policies from 20 years ago, although he also explained that the Web site had only been up for a year or two. Porterfield agreed with us that the Web site does not seem to correspond to current practices, and offered to look into reworking the Web site. That is certainly a good idea, as the investment office Web site”s claim that the committee has a mandate to deal with issues of social responsibility in investing is clearly untrue. In practice, the committee had extremely limited duties, and is now more or less inactive.
If the Committee on Investments and Social Responsibility is not providing ethical oversight of the endowment, then who or what is? The answer is no one and nothing.
The process for ensuring that our money is invested responsibly, as Kochard described it to us, was almost laughably opaque and unaccountable. He explained that money is only invested in funds run by managers that he trusts, and that the investment office does its due diligence. But members of the Georgetown community who are worried that the university may not be investing its money in a socially responsible manner have no forum to voice their concerns. Are we expected to agree that Mr. Kochard”s trust in a manager is a sufficient guarantor of social responsibility?
There is currently no socially responsible oversight of the endowment. The university is hiding behind an excuse that its current investment practices have no place for ethics, and thus ethical oversight is impossible. The question remains: How can there be no room for ethics at Georgetown, of all places? In our democratic society – and at a Jesuit institution that is a leader in social responsibility – it is absolutely unacceptable to invest without moral accountability.
Samuel Geaney-Moore is a sophomore in the School of Foreign Service and a member of Georgetown, Divest!.