Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 16, 1990 TAG: 9005160271
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: MARGIE FISHER RICHMOND BUREAU
DATELINE: RICHMOND LENGTH: Long
The eight-member team is to be led by Robert Schultz, Gov. Douglas Wilder's deputy chief of staff. The team is expected to seek expert advice - probably from a New York financial investment firm that has helped other states with divestiture - before it lays out a plan for Virginia agencies to follow.
The seven other members are: Secretary of Finance Paul Timmreck, Secretary of Administration Ruby Martin, State Comptroller Edgar Mazur, Director of Planning and Budget Karen Washabau, Secretary of Education James Dyke, State Treasurer Eddie Moore and Wilder's staff attorney Walter McFarland. Tuesday, Wilder signed an executive order mandating the divestiture of an estimated $1 billion in stocks and bonds held in the portfolios of the state's pension system, the endowment funds of state colleges and universities, and other agencies, including several bonding authorities.
The order also directs that the state agencies make "absolutely no further investments that are not substantively free of interests in South Africa."
In formalizing the sweeping divestment policy he announced last Saturday, Wilder tried to silence criticism that he had leapt before he looked at possible financial losses for the involved state agencies.
Wilder acknowledged that he made the headline-grabbing announcement before administration officials had figured exactly how to carry out the policy. But had he waited until then, "We'd be six months further along the road" with a policy against apartheid, South Africa's system of forced racial separation.
The governor also conceded that he does not know all of the financial ramifications of his action. But he said he accepts the word of a key financial adviser, S. Buford Scott, that the state will not suffer a financial loss.
Wilder said Scott, a member of the Virginia Supplementary Retirement System board and the Board of Visitors of the University of Virginia, where the divestiture issue recently came to the forefront, has assured him "that there will be no bath taken" by the state.
Wilder has been criticized by some blacks for not aggressively pushing their interests, and he seemed to have soothed their concerns with the divestiture announcement he made at the Norfolk State University commencement on Saturday.
"I'm very pleased he's taking this step. I would hope and expect more progressive actions," said Charles E. Jones, an Old Dominion University professor who had joined other black scholars in complaining that Wilder had played to moderates and conservatives since he took office in January.
But Wilder's action has come under criticism from conservatives, including several Democratic leaders of the General Assembly, who previously had nothing but praise for his conservative policies. Some, including House Speaker A.L. Philpott, have suggested that Wilder is "meddling" in investment decisions that are the lawful responsibility of the governing boards of the various schools and agencies.
The announcement also has brought a new round of criticism from many who say Wilder's move to force divestiture at colleges and universities is inconsistent with his contention that he is powerless to persuade Virginia Military Institute to drop its males-only admissions policy.
Wilder fended off repeated questions Tuesday about the perceived inconsistency. The VMI issue is in the federal courts, Wilder said, and his personal view is "of no moment." The U.S. Justice Department is suing VMI on grounds that its admissions policy discriminates against women.
But he denied he has been trying to duck the VMI issue, and he hinted he might break his silence when he speaks at the VMI commencement ceremony Saturday.
As for the divestiture order, Wilder at first said he had not personally directed the boards at the colleges and universities "to do anything. . . . I've not done that. . . . I have not called these people to say, `This is what you should do.' . . . I'm saying that the commonwealth's policy should be to divest in South Africa."
Under questioning, he conceded that he is giving the boards a mandate, but he said, "It's not meddling."
Asked about the timing of order - following the release in South Africa of Nelson Mandela and President F.W. de Klerk's recent actions in defying white extremists - Wilder said his action would help de Klerk by re-emphasizing the wrongness of apartheid.
On divestiture, Wilder ordered that the policy "be carried out with full adherence to fiduciary principles and fiscal responsibility," adding that he hopes state agencies will complete divestiture by the end of his term in January 1994.
Wilder smiled away suggestions that his policy for Virginia may mean a loss similar to one in New Jersey. That state had three years to sell off $4.2 billion in South Africa-linked investments and estimated its total losses - including brokerage fees - at $330 million to $515 million.
Wilder also said he had not decided whether his administration would discourage economic development in Virginia by companies that have substantive South African ties.
Schultz said it is not even known exactly how many agencies will be affected. Clearly, the retirement system, which may have as much as $700 million in South Africa-related holdings, will be affected the most.
by CNB