By Marcelle Richards
Daily Bruin Contributor
Despite tobacco companies’ efforts to cultivate a
user-friendly image, the University of California may follow the
actions of other universities come Jan. 17 in rejecting tobacco
investments from funds totaling $55 million.
Tobacco companies, such as Philip Morris and R.J. Reynolds, are
included in the Russel 3000 index fund the Regents may adopt to
increase investment volatility.
But public health organizations argue the tobacco stocks
contradict California’s Proposition 99, which is designed to
pull the reins on tobacco companies with higher tobacco product
taxes.
“There’s a concern many proponents of not-investing
view as a moral issue. It’s difficult to inject moral reasons
into divestment issues,” said DeWitt Bowman, Interim
Treasurer of the UC Regents. “But in this case we feel there
are investment reasons, primarily the non-quantifiable nature of
the litigation and substantial losses.”
Court decisions against tobacco companies in the last decade
have prompted the Regents to consider precautionary measures of
excluding the stocks from the funds and re-adjusting other
investments to compensate for the loss of these stocks.
Philip Morris currently holds $78 billion in companies such as
Miller Brewing Company and Kraft foods.
Although the conglomerate has been involved in public works
projects such as disaster relief efforts, AIDS-related charity and
food drives for the hungry, such contributions to charity, while
meritable, cannot outweigh 430,000 annual smoking-related deaths,
said Richard Levinson, associate executive director of the American
Public Health Association.
“Kraft Foods produces a wholesome, family, image,”
he said. “But no matter what their good contributions are,
they have a business that is not socially acceptable.”
Schools were issued book covers by the Philip Morris Youth
Smoking Prevention that were later pulled from distribution. The
covers allegedly contained a subliminal message in showing images
that resembled a cigarette, smoke and tobacco, according to a
Washington D.C.-based group, Action on Smoking and Health.
“The Philip Morris campaign is very well put together. It
diverts the issue for the public,” Levinson said. “The
fact that they continue means they’re getting their
money’s worth.”
While university divestments are unlikely to economically damage
tobacco companies, according to Levinson, the divestments may help
build awareness among fellow public institutions. Levinson advises
that universities conduct background checks on the companies in
which they plan to invest.
“In the long run, such investments are risky, the tobacco
companies’ liabilities have increased,” said E. Richard
Brown, UCLA Public Health professor. “It’s not
necessarily a financially rewarding investment. The UC needs to set
an example of a socially responsible policy.”
Harvard, Stanford and the Universities of Michigan, Washington
and Wisconsin have already divested. Northwestern University has
historically been tobacco-free in its investments from the
start.
Both the University of Michigan and Northwestern have attributed
their separation from the tobacco industry due to ideological
differences.
“I definitely think it’s a trend,” said
Levinson. “As investments are made, the easiest thing is to
go with what makes the most, but your ethical position has to
predominate. I think the universities have to make a decision that
it’s more important to have a conscience than whatever
they’re using the money for.”
Former UC treasurer Patricia Small excluded tobacco stocks from
the UC portfolio and therefore, on paper, the UC tobacco record is
currently non-existent, though Bowman said the UC has dealt with
tobacco companies in the past.
According to the Social, Investment Forum this procedure of
ruling out tobacco manufacturers is not uncommon among 84 percent
of America’s “socially responsible portfolios.”
Since the replacement of Small, the Regents have consulted Wilshire
Associates for financial guidance.
“(Divestment) would make UC consistent with the ethical
position being taken by other universities,” Brown said.
“UC should not lag behind.”