The University Record, March 22, 1999

Committee to study tobacco investments

By Wono Lee
News and Information Services

The University will appoint a special committee "to weigh the argument for this University to divest itself of securities issued by tobacco companies and to recommend whether any action would be appropriate," the Regents were told at their March meeting.

"The committee, consisting of students, faculty, administration and alumni, will be asked to consider whether the holding of such securities is antithetical to the core missions of the University, and therefore merit divestiture," said President Lee C. Bollinger and Robert Kasdin, executive vice president and chief financial officer. "Personal disapproval of smoking or disdain for those companies will not justify an institutional decision to divest.

"This is a deliberately high threshold condition. Except in exceptional circumstances, pressures to invest the endowment in ways that support particular political opinions must be resisted if we are to leave a university to succeeding generations at least as strong as the one with which we have been entrusted," Bollinger said.

Bollinger and Kasdin noted that in 1997 the Senate Assembly began to consider the propriety of the U-M's ownership securities issued by tobacco companies. On Oct. 27, 1997, Senate Assembly adopted a resolution urging the University to divest its holdings of such securities.

"A number of other leadership groups on campus joined in expressing the views that the issue is one of widespread concern. Some, like the Senate Assembly, urged divestiture. Others urged the establishment of a special committee to review the process and make recommendations."

In the late 1970s, a similar advisory committee considered the University's holdings in companies that did business in South Africa.