2008 Lane Reports

U of C Misguided in its Refusal to Divest from Sudan

Tuesday, July 1, 2008 6:00 pm
by Marc J. Lane

 

Clinging to a simplistic, Vietnam-era policy, the University of Chicago's board of trustees is refusing to divest from companies doing business with the criminal government of Sudan. The board, stubbornly contending that divestment would stifle debate and freedom of inquiry, is dead wrong.

By some estimates, more than 400,000 people have died from violence and disease in Sudan's Darfur region, and 2˝ million more have been displaced since 2003, when fighting began between ethnic Sudanese rebels and Arab militias backed by the nation's pro-terrorist government. The counter-insurgency escalated into a scorched-earth campaign that both President George W. Bush and the U.S. Congress have described as genocide. Civilians have been murdered, villages burned down, families driven into refugee camps and thousands of women and girls raped. 

U.S. law bans American companies from conducting business operations in Sudan and shields state and local governments and asset managers who divest. Illinois was the first state to divest taxpayers' money from Sudan. The University of Illinois, Northwestern University and the city of Chicago (whose City Council condemned the U of C's inexcusable refusal) followed suit, along with hundreds of ethical individual and institutional investors around the world.

Still, some investors, the university among them, unconscionably continue to invest in foreign companies complicit in the bloodshed.  U of C, nearly alone among major U.S. universities to refuse to divest from South Africa during apartheid, is one of only three American universities to consider divesting their holdings in companies with ties to Sudan and then explicitly to reject divestment.
University President Robert J. Zimmer argues that, so far, economic decisions haven't reduced the atrocities in Darfur. He dismissively notes that the university's holdings in targeted companies are small, so divestment wouldn't mean much anyway. And he quotes the report of a faculty committee at the height of the Vietnam War, recklessly insisting that the university “should not . . . permit itself to be diverted from its mission into playing the role of a second-rate political force or influence.”

But the Sudanese government relies heavily on foreign investment to fund its brutal military, which is out to destroy the non-Arab population of Darfur. More than 70% of Sudan's oil revenue, a principal object of foreign direct investment, goes to the country's military. And the Sudanese government has historically been responsive to economic pressure.

The university's policy is principled, but it is not moral. It is indirectly condoning Sudan's unspeakable crimes against humanity. Properly understood, the mission of any university is to shape minds, to build character and to lead by example. Failing to deploy all its resources, however small, to that noble cause is to fail to deliver on its promise. 

This month's Lane Report is adapted from a guest editorial published in Crain's Chicago Business on June 9, 2008.

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Marc J. Lane is the President of The Law Offices of Marc J. Lane, a Professional Corporation, and of its financial-services affiliates. He is a business and tax attorney, a Master Registered Financial Planner, and an Adjunct Professor of Law at Northwestern University School of Law.


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The Lane Report is a publication of The Law Offices of Marc J. Lane, a Professional Corporation. We attempt to highlight and discuss areas of general interest that may result in planning opportunities. Nothing contained in The Lane Report should be construed as legal advice or a legal opinion. Consultation with a professional is recommended before implementing any of the ideas discussed herein. Copyright © 2008 by The Law Offices of Marc J. Lane, A Professional Corporation. Reproduction, in whole or in part, is forbidden without prior written permission.

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