
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, May 23, 1990                   TAG: 9005230491
SECTION: EDITORIAL                    PAGE: A-10   EDITION: METRO 
SOURCE: JOHN HORAN JR.
DATELINE:                                 LENGTH: Medium

DISINVESTING WON'T BE EASY

GOV. L. DOUGLAS Wilder's decision to order the disposal of state funds invested in firms that do business in South Africa embodies a worthy sentiment, popular with blacks and liberals who have perhaps felt forsaken in all the talk of Wilder's fiscal conservatism and his "New Mainstream."

Implementing the policy, however, is another matter, and may tarnish Wilder's claim of fealty to the Old Dominion's standard of fiscal rectitude.

At issue is nearly $1 billion in state investments, primarily in the state employees' pension fund and the endowments of several colleges and universities. Depending on the market value of the stocks - and how quickly the divestment takes place - the state could take a financial beating. New Jersey lost as much as $500 million by divesting $4.2 billion in South African-linked holdings in three years.

That risk will be minimized, Wilder maintained, by "prudent" disposition of the stocks over an unspecified period of time. But the vagaries of the stock market will determine the ultimate costs to the state - and to its pensioners.

Although some would argue that the expense is a small price to pay for helping to hasten the end of the apartheid regime in South Africa, conservatives - especially those with a direct interest in the state's pension fund - are sure to take a different view.

Wilder has barred new state investments in firms with ties to South Africa and ordered the divestment process to begin, but implementation in most cases rests with boards that are appointed by, but technically independent of, the governor.

That raises the possibility that divestment will become a litmus test for appointment to state agencies. Some independent-minded appointees may find themselves cut off from the "mainstream."

More to the point, the divestment gambit contradicts the governor's position in the controversy over admitting women to Virginia Military Institute. Wilder, who has sought to distance himself from the VMI fray, argued in legal briefs that he was essentially powerless to work his will on the school's governing board. If he can find a way to get colleges to sell their stocks, he can, through his appointive powers, alter admissions policies at VMI.

These ramifications either eluded the Wilder administration or were considered to be of little significance. The hurried efforts of state officials to draft a comprehensive policy following Wilder's divestment announcement at Norfolk State lends further credence to the notion that the idea is founded more on politics than prudence.

by CNB