USNH pensions tied to genocide

A Boston investment company with ties to genocide has been revealed to be one of the investment options for the nearly 4,300 employees under the University System of New Hampshire, including Keene State College staff.

Fidelity Investments has come under fire for its connections to several Chinese oil companies doing business with the Sudanese government, which is accused of committing genocide against its country's people by various human rights organizations.

Fidelity shares make up 5 percent of PetroChina's total holdings, worth about $1.3 billion, according to the U.S. Securities and Exchange Commission.

This makes Fidelity the largest public investor in PetroChina on the New York Stock Exchange and the second largest investor in the world, said Bill Rosenfeld of Fidelity Out of Sudan, an activist organization providing information about companies involved in Sudan.

However, the connection to USNH is complex.

Employees of the university system are given two retirement fund investment options, Fidelity Investments and TIAA/CREF, said Ed Mackay, vice chancellor and treasurer for USNH.

When a USNH employee sets up a retirement package, he or she invests money in a portfolio with a wide array of mutual funds made up of individual stocks and bonds.

The university system then matches the employee's contribution, between two and six percent.

"Employees are responsible for their own portfolios…. Anyone concerned in this regard could do their homework," said Mackay.

Junior Jenny Belmont, president of the Holocaust and Genocide Awareness Club said she was shocked when she found out about KSC's involvement in Fidelity.

"It really makes you question where your money is going," said Belmont.

"If an individual is concerned, they can contact either Fidelity or TIAA/CREF and change what companies they are invested in," said Matt Cookson, associate vice chancellor for external relations.

"The burden is on individual employees to read the prospectus on the fund and find one that suits them.... Telling employees what companies to invest in would infringe on their rights," said Mackay.

Jay Kahn, vice president for finance and planning at KSC said that representatives from Fidelity and TIAA/CREF are invited to the school twice a year review employee portfolios.

"Employees should take the time to visit with retirement fund advisors to inquire about socially responsible funds, if that is something they are interested in," said Kahn.

Belmont said she is going to start a petition and asking professors pledging not to invest in companies with financial ties to Sudan and to send letters to Fidelity.

"At this point, we're still trying to figure out how this could have happened…. Right now, raising awareness is the most important issue," said Belmont.

Economics professor Bob Sherry said he invests in socially responsible funds and believes the best way to raise awareness about the issue would be to demonstrate in front of Fidelity because it would generate media attention.

"I assume that Fidelity would be most interested in its image. A large scale mailing could be easily ignored," said Sherry.

The Fidelity group states that all investments comply within U.S. law.

"It is important to note Fidelity is managing not its own money but rather the money of many investors. Those investors who choose Fidelity funds rightly expect that these funds will be managed in a way that seeks to achieve each fund's investment objectives as well as comply with all governing laws," said Fidelity spokesperson Vin Loporchio, in an e-mail interview.

Mackay said there had been no discussion of divestment of USNH from Fidelity.

Divestment is the reduction of a financial asset.

It is the opposite of investment.

Over 40 colleges and universities across the country have taken steps towards divesting, breaking ties from investment companies that do business in Sudan.

There are two parallel movements that need to be considered in regards to divestment, said Rosenfeld.

"One is to get colleges and states to divest from Sudan through endowment funds," he said.

Endowments are funds donated to institutions, which in turn are invested to turn higher profits.

The USNH board of trustees votes on which companies are chosen to invest in.

Companies are selected based on total return, meaning the highest profit, not whether they are socially responsible, said Kahn.

According to a 2006 survey of college endowments by the National Association of College and University Business Officers, roughly 72 percent of institutions do not consider social responsibility in their investment policies.

"The other [way to get colleges to divest] is through the pension plans colleges and universities offer their employees. Many colleges have started to think about one and not the other," said Rosenfeld.

Rosenfeld said administrators could do four things to make a difference.

The first is for administrators to ask how the university can act as a whole instead of on an individual basis to deal with the problem.

The second is for the university to provide information to employees to make them aware of Fidelity's role in the problem and supply alternatives to those who chose to divest as individuals.

The third is to encourage people not to choose Fidelity as an alternative.

"The university could say they are totally unhappy with Fidelity and do not want people to invest in it," said Rosenfeld.

The last option is for the college or university to divest from Fidelity completely.

"This is the most difficult. It's saying, 'We're not going to do business with you anymore and switch our retirement plans away from Fidelity'. This is a big deal," said Rosenfeld.

"This is really just the beginning. The next few months are going to be really exciting," said Rosenfeld.

Silas Bennett contributed to this report.