Los Angeles Board Votes To Divest Itself of South African Holdings
Seeking to divest itself of investments in firms with "direct connections" to South Africa, the Los Angeles Board of Education has asked the county treasurer to remove district funds from a countywide investment pool.
The Los Angeles Unified School District, which earned $63 million in interest in 1984-85, joins at least 2 other districts, 8 states, 30 cities, and 50 colleges and universities that have adopted policies opposing apartheid, South Africa's system of racial separation. (See Education Week, Aug. 28, 1985.)
But acting on the advice of county attorneys, Richard B. Dixon, the treasurer, said last week that he cannot create a "sterile" investment pool for funds of the nation's second-largest school district. He said his office would study the possibility of investing district funds in firms not associated with South Africa on a case-by-case basis, but said he would approve of the move only if it could be shown to be "a real thing that works, and not something that is cosmetic."
Mr. Dixon had previously told the school board that he would be willing to administer a separate investment pool for the district, but only with the approval of the county attorneys and the county board of supervisors.
But the county attorneys advised Mr. Dixon that the board did not have the legal authority to remove its funds from the investment pool. State law requires that school districts deposit their funds with the county treasurer, and that those funds be invested as part of a pool.
Last week, in light of the attorneys' opinion, the supervisors declined to provide any direction on whether he should create a separate pool for district funds, Mr. Dixon said.
Mr. Dixon said his office would decide whether to administer a separate pool within the next few weeks. "I have to be guided by the opinion of counsel but I also have to be sensitive to the wishes of my client depositor," he said.--jrs