PCUSA targets 5 corporations for divestment consideration
By John H. Adams, The Layman Online, August 8, 2005
The Presbyterian Church (USA) has targeted four corporations, including the oft-mentioned Caterpillar, for divestment if they don’t back off assisting Israel in its defense against Palestinian terrorists.
A fifth corporation, Citigroup, was included because it allegedly assisted the terrorists, an allegation that a spokesman for the banking corporation strongly denied. “Any assertion that Citigroup supports terrorism in any way is an outrage,” said Citigroup’s Leah Johnson. “We take all possible measures to ensure that our institution is not used by criminals or as a conduit to fund terrorist activities.”
The other companies cited for abetting Israel are ITT, which manufactures communications and security equipment; Motorola, which recently won a contract for wireless communications equipment for the Israeli military; and United Technologies, which has sold helicopters to the Israeli military.
In Caterpillar’s case, the value of PCUSA’s shares has soared since the General Assembly’s resolution in June of 2004 calling for phased selective divestment of funds in multinational corporations doing business with Israel.
Then, the Presbyterian Foundation and the Presbyterian Board of Pensions held a combined 37,100 shares of Caterpillar stock valued at $2,893,058. The stock recently split and today the PCUSA investment groups hold 74,200 shares valued at $3,977,882 – a gain of $1,084,840 or nearly 40 percent.
Caterpillar issued a statement on Friday, after it was listed as a divestment target, saying, “For the past four years, activists have wrongly included Caterpillar in a publicity campaign aimed at advancing their much larger political agendas. Over that same period of time we’ve repeatedly evaluated our position, as have our shareholders, and determined that while the protests occasionally succeed in getting headlines, they neither change the facts nor our position.”
The denomination’s Mission Responsibility through Investment (MRTI) Committee announced its list of possible divestment targets on August 5. Before any divestment could begin, the 2006 General Assembly of the PCUSA would have to approve a final list. Even then, the boards of the two Presbyterian organizations – the Presbyterian Foundation and the Board of Pensions – would have to decide on their own to divest of their holdings in the five corporations.
In the past, leaders of the Board of Pensions and the Presbyterian Foundation, whose combined assets total about $8 billion, expressed reservations about the divestment process and cited their fiduciary responsibility to gain the best possible return for their investments.
The General Assembly’s resolution did not call for divestment from companies abetting Palestinian terrorism, but MRTI added them to the list after Presbyterians and Jewish groups accused the denomination of unfairly blaming Israel for the long-standing confrontation between Israel and the Palestinians.
In announcing the five targeted companies – the ones selected for an “initial focus” – MRTI said its decision is “consistent with the Church’s long-standing practice of ensuring its investments are used to further the Church’s mission.”
MRTI officials said the next step in the process toward divestment is to “engage senior management of each company in a conversation aimed at persuading them to change practices that enable or support violence in Israel and Palestine.”
“We have chosen these companies because we believe that they can make changes that will increase the possibilities for a just peace in the region,” said Carol Hylkema, MRTI’s chair.
MRTI’s action was condemned by several Jewish groups. The Jewish Anti-Defamation League’s National Director Abraham Foxman said, “Divestment policies are counterproductive and a detriment to the newly revived peace initiative between the Israelis and Palestinians, and fundamentally flawed as a mechanism for resolving the conflict. Divestment hurts not only Israel, but has economic impact on Palestinians as well.”
The New York Times quoted Rabbi Abraham Cooper of the Simon Wiesenthal Center as saying, “When you look at the list of companies, this is basically a recipe for Israel to disarm.” He argued that the Protestant churches were ignoring the current “reality on the ground” – Israel’s promise to withdraw from Gaza later this month and remove its settlements there. “Instead of divesting, these churches should be investing,” he told The Times. “There is so much humanitarian need on the ground in the Holy Land. We’re not telling them: ‘Stay out of it. It’s not your business.’ There’s a ton of work to be done.”
David Elcott, director of interreligious affairs in the United States for the American Jewish Committee, told The Times that he found the Presbyterian Church’s resolution “morally reprehensible” because it singled out Israel for blame.
The Times also quoted representatives of some of two corporations targeted by MRTI:
- A spokesman for Motorola, who said MRTI’s action “came completely out of the blue.” He said the company supplies radio products to Israel, as well as to many Arab countries.
- A spokesman for United Technolgies said, “UTC has been widely recognized as an ethical and responsible corporation. Work on military programs is stringently regulated by the U.S. government, and UTC complies wholly with all policies and related regulations.”
Since the PCUSA approved its divestment resolution in 2004, some other mainline Protestant denominations have taken steps toward divestment, although none has a denominational investment portfolio that approaches the size of the PCUSA’s.
The PCUSA’s news release about MRTI’s action spelled out briefly why it targeted the five corporations:
- Caterpillar – Caterpillar manufactures heavy equipment used for demolition of Palestinian homes, the uprooting of olive trees, construction of roads and infrastructure in the occupied territories for use only by Israeli settlers, and facilitating by the Israeli military.
- Citigroup – Citigroup is a large international bank cited by The Wall Street Journal on April 20, 2005, for having moved substantial funds from charities later seen to be fronts funneling money to terrorist organizations. Some of these funds ended up as payments to the families of Palestinian suicide bombers.
- ITT Industries – ITT Industries is a diversified manufacturer that supplies the Israeli military with communications, electronic and night vision equipment used by its forces in the occupied territories.
- Motorola – Motorola recently won a contract to develop wireless encrypted communications for the Israeli military in the occupied territories. Additionally, it is a majority investor in one of Israel’s four cell phone companies. This investment is controversial because cell phone companies, according to the Oslo Agreement of 1995, must be licensed by the Palestinian Authority in order to operate in the West Bank and Gaza. With powerful facilities in the settlements, with a range covering all of the occupied territories, this licensing has not occurred.
- United Technologies – United Technologies is a large military contractor whose subsidiary has provided helicopters to the Israeli military. They have been used in attacks in the occupied territories against suspected Palestinian terrorists. The company also provides other military hardware.