Transparent investing practices needed at University

Complicity. It is in the clothes we wear, the food we eat and the investments we make. Ralph Waldo Emerson wrote in his 1860 essay, "Fate," "You have just dined, and, however scrupulously the slaughterhouse is concealed in the graceful distance of miles, there is complicity." And yet even today, as more and more investors and companies recognize the value of Socially Responsible Investing (SRI), the slaughterhouse is still very much hidden carefully out of sight of consumers and investors alike.

The admirable goal of PCAIR (Princeton Coalition Advocating Investor Responsibility) is to educate the University community about the implications of its endowment investments and ensure that our values as a community, whatever they may be, are at least taken into consideration when endowment managers decide investment strategy.

Why shouldn't we attempt to know more about how the University's endowment is being spent? Who could object to greater transparency in such matters? Well, the Princeton Tory for one. In response to the formation of PCAIR, the bow-tied boogiemen have titled their upcoming May issue, "Barbarians at FitzRandolph Gate: How liberals are stifling Princeton's financial development." Inside this issue is a feature article of the same title, written by Paul Thompson '06, and an anti-PCAIR rant. These two pieces make the case against PCAIR by arguing that profit should be the primary and sole consideration of the endowment managers' investment strategy, and that members of the University community have no business offering their "sage advice"to these financial experts. The Tory concludes that the University will surely lose money if it succumbs to SRI, and that no cause, "no matter how 'noble,' " is worth a shrunken endowment.

Now, I know what you might be thinking. I should be reluctant to entertain the arguments of a publication that spews poisonous dogma disguised, albeit very poorly, as intellectual exercise. But here complicity is once again at work. The failure on each of our parts to challenge the status quo, which the Tory is so eager to defend, is a tacit endorsement of existing policy. If we support the PCAIR initiative, then we must let our support be known.

The Tory's anti-PCAIR rant argues, "The sole purpose of PRINCO is to make money for the University" and nothing more. To interfere with the bottom line would be "to call for either higher tuition" or "reduced University funds." The first threat sounds familiar. A similar rumor was circulated on the Hofstra campus, where students were told that tuition would increase significantly if the referendum to end the school's exclusive contract with Coca-Cola passed. And so students wondered, why not keep Coke? What could be wrong with a company that, according to its website, "exists to benefit and refresh everyone it touches?" Perhaps the union leaders who have been murdered and tortured by the paramilitary death squads brought in by the company's bottling plants in Colombia could shed some light on that question.

I also wonder how the Tory staffers would have felt about the anti-apartheid divestment campaigns that swept across universities in the 1980's. Princeton did participate in that movement; even if our endowment did take a hit, was it not worth it?

Now, not all causes are created equal. This, I suspect, is the Tory's main concern with PCAIR's agenda, which they label "the liberal cause du jour." But demanding more transparency in how the University's endowment is managed is neither a liberal nor a conservative idea. Wouldn't Tory staffers want to be the first to know if the University's endowment was funding Al Franken's next radio broadcast, or Michael Moore's next twinkie? If it were up to the author, they wouldn't.

I strongly disagree with the assertion that "the university should simply trust its benefactors to know what is happening with their donations and leave the ethical decisions to them," not students or alumni. That is a profoundly antidemocratic statement, because students and alumni are University benefactors, and we deserve to know how our money is being spent. PCAIR isn't even asking for actual voting power. PCAIR simply wants members of the community to be able to find out where University funds are going and what is being done in our name. This should apply to all members of this community, not just those who have 'bought in.' We should all make our best attempts to learn about the activities and practices that we endorse with every dollar we invest. The market exists without a conscience only so much as we allow it to. Freddie LaFemina is a history major from North Massapequa, N.Y. He can be reached at lafemina@princeton.edu.