Emma Ambroziak / The Mossy Log
On Oct. 10, Students for Justice in Palestine on Palatine Hill (SJPPH) released a statement claiming that at least $983,000 of Lewis & Clark’s $327,838,737 endowment is invested in Lockheed Martin, Northrop Grumman and four commingled funds associated with weapons manufacturing. An interview with Director of Public Relations Lois Leveen, Chief Financial Officer Andrea Dooley and Vice President of the Office of General Counsel David Reese has confirmed that 0.3% of the endowment, or approximately $983,000, was flagged in an Aug. 31 screening for investments in “Conventional Weapons.”
In an email statement, Leveen shared a definition of what could result in a flag during a Conventional Weapons screening.
“The ‘Conventional Weapons’ category of MSCI (Morgan Stanley Capital International) military weapons-related screens includes companies involved in the production of conventional weapons, components for such products; or involved indirectly through ownership ties to companies involved in such products, with an added threshold for revenues >5%. This screen excludes military uniforms and safety gear and equipment, non-essential components of weapons systems or platforms — items that are commonly used in everyday electronic and mechanical equipment and vehicles — and support services that are not combat or warfare oriented, among others.”
The Conventional Weapons screening includes companies involved in the production of conventional weapons or weapons parts, as well as companies indirectly involved through ownership ties with other companies. This screen flags companies that have more than 5% of their revenues from conventional weapons or parts.
SJPPH is an anonymous, unofficial student group whose primary mode of communication has been through Instagram. The endowment figures originate from their meetings as part of the Investment Discussions Group (IDG). The IDG was set up by Lewis & Clark’s administration as a part of the agreement to end an encampment led by SJPHH earlier this semester.
The Mossy Log contacted SJPPH for comment. They provided a written statement discussing the IDG meetings and their efforts for disclosure and divestment, and described their group as a horizontal organization that cannot be represented by one member in an interview.
“SJPPH, along with other students in the Investments Discussion Group, have drafted 3 proposals to be presented on Oct. 31 to 4 members of the Board of Trustees. Two of these proposals center on divestment, and one proposal centers on disclosure,” the statement read.
The Mossy Log reached out to clarify this figure and to discuss LC’s financial endowment. An interview with Dooley offered insight into the nature of the endowment, as well as some common misconceptions about how it functions.
“The idea that tuition dollars are in the endowment is completely untrue,” she said. “Every year, the dollars that we collect from tuition are spent in student services and academics. They’re not invested in the endowment.”
According to documents provided by Dooley, around 85% of annual funding for the College of Arts and Sciences comes from tuition and room and board. 8% comes from the endowment. Dooley explained that donors, not students, fund LC’s endowment.
“The endowment comes from donor funds. The donor will give what we call corpus, which is the amount of the gift. That gift is meant to be held in perpetuity, to benefit the college into perpetuity. The gift itself that they give us isn’t spent. What’s spent is what we can earn on that gift, and it’s spent towards what the donor says it needs to be earned towards,” Dooley said.
According to SJPPH and LC’s official website, LC uses Cambridge Associates, a private investment firm, as its investment manager, functioning similarly to Chief Investment Officers at other institutions. Rather than investing in individual companies, Cambridge Associates places LC’s endowment in the hands of investment managers who are each running their own mutual and commingle funds. These funds contain investments in a portfolio of stocks, bonds and other securities.
“We don’t pick companies, we don’t buy or sell individual companies. And a lot of these agreements have different contractual guidelines,” she said. “We essentially sign a contract with an investment manager for private investment, hand over whatever our investment amount is, and then we aren’t able to pull that money back until the fund ends.”
The partial disclosure of investment in weapons manufacturers is the result of a MSCI Business Involvement Screening Research (BISR). MSCI, a stock market research and analytics company, creates the screens used by Cambridge Associates. There are four kinds of weapons screenings offered — Conventional Weapons, Civilian Firearms, Controversial Weapons and Nuclear Weapons. SJPPH initially requested the results of BSIR screenings for Civilian Firearms, as well as Israel and Human Rights. They have since added Controversial Weapons and Nuclear Weapons to their proposals.
While MSCI does not have a specific Human Rights screen, the Environmental Social and Governance (ESG) Controversies and Global Norms screen has been used as a proxy and is colloquially referred to by SJPPH as a Human Rights screen.
The results of the screenings provided by administrators align with figures provided in an Oct. 26 SJPPH Instagram post. The screen for Israel flagged 0.71% of the endowment, approximately $3.2 million. The screen for Civilian Firearms came back as 0% exposure. The Human Rights screen flagged one specific company at a total of 0.07%, or around $229,000.
MSCI BISR screens are only used for collecting information. Endowment management screens, which restrict where the endowment is invested, are operated by LC. The SJPPH document states that the only endowment management screen that LC currently uses is a fossil fuel screen. This screen was confirmed in an interview with the administration. In February of 2018, the Board of Trustees agreed to divest from fossil fuel holdings. This policy has since been updated to a net-zero emissions policy. According to Dooley, Cambridge Associates is contractually required to make sure that the investments they bring comply with LC’s investment policy. SJPPH elaborated on their goals in seeking these screenings.
“SJPPH, along with other students in the investments discussion group, have drafted 3 proposals to be presented on Oct. 31 to 4 members of the Board of Trustees. Two of these proposals center on divestment, and one proposal centers on disclosure,” the statement read. “Both divestment proposals advocate for the amendment of the Lewis & Clark College Endowment Investments Policy such that the college divests from companies listed under the MSCI BISR screens titled Conventional Weapons, ESG Controversies & Global Norms, and Israel.”
The SJPPH statement elaborated on the definitions of the Israel and ESG Controversies & Global Norms screens.
“The ESG Controversies & Global Norms screen scans for investments in companies flagged for involvement in human rights abuses,” the statement read. “Companies are scored on a scale of 0-9 and we ask for divestment from companies scored at 0, 1, 2, 3 i.e. flagged red, orange (or) yellow for human rights violations controversy. The Israel screen scans for investments in companies organized or incorporated in the State of Israel. The difference between the two divestment proposals is that one pertains to the College’s direct investments and one pertains to the College’s indirect investments (investments tied up in commingled funds.)”
Notably, a SJPPH post from Oct. 26 claims that the Human Rights screening confirmed that LC is invested in one company that is in association with human rights abuses. Dooley disagrees with this characterization, noting that the screen covers allegations that go against global norms rather than solely confirmed cases of human rights abuses.
“Cambridge reached out to the investment manager who manages that investment, and asked for additional information about the due diligence they had done, why they felt like this was an appropriate investment and (we) were satisfied with the answers that were shared about what the situation had been, as far as the allegations, how it had been resolved, and why they didn’t think that the company itself was at fault, which is why the investment was made,” said Dooley.
Dooley shared that LC is unable to disclose the specific company due to a confidentiality agreement with Cambridge Associates. However, when running the Conventional Weapons screen, specific company names were given to IDG members. Dooley clarified that this was a special case.
“I felt like, in that context, using Lockheed Martin and Northrop Grumman as an example of something that was a direct investment was reasonable. It’s not necessarily something that we could replicate on a larger scale. We start to feel like we’re pushing up against those confidentiality agreements.”
Dooley then provided more information on the qualifications that flag companies under the Israel screening. Rather than identifying all companies affiliated with the state of Israel or the Israeli government, the screen looks at where a company is incorporated. She clarified that the college is not invested directly in the government of Israel, as alleged in the Oct. 26 SJPPH post. She then provided more information on the investments flagged under the Israel screen.
“When I read something that says we’re invested in the State of Israel, I feel like that is implying that the college is somehow invested in the government of Israel,” said Dooley. “Really what the college has investments in are a very small exposure, 0.71%, to various companies that are in healthcare and information technology market sectors that happen to be organized in Israel.”
Dooley acknowledged that students might still take issue with investments in companies located in Israel, whether or not they are directly funding the Israeli government.
“I think there could be a grand debate. I’m sure there are many different feelings about whether or not an individual … who runs a company that’s based in Israel has anything to do with anything. But that’s what our investment is in. It’s not in the State of Israel, which I think implies something different,” Dooley said.
In a statement to The Mossy Log, SJPPH summarized their proposal to the Board of Trustees.
“The disclosure proposal advocates for the creation of a form on the Board of Trustees’ page on the Lewis & Clark website, which would allow students and L&C community members to request the names of companies in which the College holds investments, and the extent of financial exposure associated with each holding. Answers would be made available on the investments page on the school website, and updated annually,” read the statement. “This proposal also advocates for a town hall every semester, in which students and community members would have the opportunity to meet with the President, Board Chair, and the chairs of each committee to discuss general issues on campus and concerns regarding College investments.”
LC has yet to release a public statement concerning the disclosure proceedings.
Dooley spoke on the complicating factors in communicating the results of the screenings to students, faculty and alumni.
“It’s something that is really challenging to convey in an institutional email or a web page,” Dooley said. “It’s certainly a challenge to figure out what would be valuable to share, what isn’t going to cause more confusion.”
Reese stated that any students who are seeking more information or who wish to communicate their concerns are welcome to contact LC’s administration.
“We are happy to talk with students who have questions or concerns about any aspect of how the college is run. This particular group of students has particular questions and concerns, and we’ve agreed to talk with them about them, as we would with any group of students,” Reese said.
SJPPH also hopes to keep an open line of communication with the campus community and LC.
“We want to set up an ongoing communication structure so that the campus community — current and future — can continue to obtain disclosure and accountability, and also invest in spaces that benefit the global community and marginalized voices. We believe in financial transparency, and that there should not be barriers to information regarding our institutional finances and individual tuition/cost of attendance,” the statement read.
SJPPH hopes to gauge popular support for their proposals among the wider LC community through a schoolwide referendum.
“SJPPH wants to know the opinion of the student body on our proposals, but there seems to be difficulty getting a referendum passed through ASB. The referendum we hope to see would use the exact language of the proposals being presented on Oct. 31, so that the Board of Trustees would be able to gauge support, and so that students could have the chance to vote on the same topics that the board will. We hope to see such a proposal circulating soon,” the statement read.
Their statement ended with an appeal to administration, citing LC’s past divestment from South African apartheid in 1987.
“SJPPH appeals to Lewis & Clark College to divest from Israel in support of the July 19, 2024 advisory opinion of the International Court of Justice (ICJ), which found the State of Israel responsible for segregation and apartheid. L&C divested from South African Apartheid in October 1987, and we now call on the Board of Trustees to uphold the legacy of the College by divesting from apartheid and illegal occupation,” the statement read. “Further, SJPPH appeals to Lewis and Clark College to divest from conventional weapons and companies flagged for human rights violations, to align with our newly approved mission statement which affirms ‘the power of higher education as both an individual benefit and a public good.’ As such, we believe that higher education and our liberal arts program aimed at practicing and teaching decolonization, are not compliant with profiting off armed warfare.”
As the IDG meetings continue, this story will develop. The Mossy Log will continue to provide coverage of the disclosure efforts of SJPPH and the IDG.
About the Author
