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05410
August 9, 2005

Officials of firms on ‘engagement’ list
defend business practices in Israel-Palestine

Some express puzzlement; others
are sticking to earlier statements

by Toya Richards Hill

 
 

LOUISVILLE — Officials of some of the five corporations chosen last week for “progressive engagement” by the Presbyterian Church (U.S.A.) because of their roles in advancing violence in Israel and Palestine say  they are still trying to make sense of the denomination’s decision.

     “No one from the church has contacted us,” said Tom Martin, senior vice president of corporate relations for ITT Industries, of White Plains, NY. “We had not
 gotten any previous
letters or anything from them."

     On Friday, Aug. 5, the PC(USA)’s Mission Responsibility Through Investment (MRTI) Committee unanimously selected ITT, Caterpillar, Citigroup, Motorola and United Technologies as the multinational corporations it would contact about business practices believed to contribute to violence by Israelis or Palestinians.

     The committee was acting on a mandate from last year’s 216th General Assembly to begin a process of “phased selective divestment” from companies meeting certain criteria.

     The PC(USA) Board of Pensions and the Presbyterian Foundation, through trusts, oversee the denomination’s investments in the five companies – about 1.6 million shares in all. The value of those shares was not disclosed

     Together, the Board of Pensions and the Foundation manage church investments worth more than $7 billion.

     Friday’s decision was part of a lengthy process that could end with MRTI asking the denomination’s General Assembly Council (GAC) to ask the General Assembly to put the corporations on a divestment list.

     The financial impact of the MRTI committee’s action is unclear. Its decision was announced after the investment markets closed last Friday. On Tuesday, Aug. 9, all but one Motorola closed the day up from Monday’s close.

     The committee’s decision was widely reported in the national media, landing on the front page of Saturday’s New York Times. Yet, on Tuesday, officials of some of the five companies were still awaiting official notification by the PC(USA).
 
 

     “We’ve talked a lot internally” about MRTI’s actions, said Norman Sandler, director of global strategic issues for Motorola, of Schaumburg, IL.

     “As far as I can tell, we haven’t received anything” from the church, Sandler said.

     According to the responsible-investing committee, Motorola, a large electronics and telecommunications company, has a wholly owned subsidiary with extensive ties to the Israeli military and recently won a contract to develop  encrypted wireless communications for the military to use in the occupied territories.

     “Our position is clear,” Sandler said. “We’ve been in the region for a long time, dealing with a number of customers” in telecommunications services. He said the company has been in Israel for 40 years.

     “We are involved in Israel … we’re involved in the Palestinian Authority territories … and we’re involved in, I think, at least a dozen other countries around there, helping to supply commercial mobile phone service,” he said.

     Sandler acknowledged there have been talks between Motorola and the PC(USA), but he said the company was still caught off guard by Friday’s development.

     “The timing of the release on Friday afternoon in August was a little bit surprising creating a huge amount of interest on a day that it is very difficult to contact people,” he said.

     The committee’s action came during a regularly scheduled meeting in the Seattle, WA, area, where several members live. The decision came around 1 p.m. Pacific Standard Time, or 4 p.m. EST.

     Bill Somplatsky-Jarman, the chief PC(USA) staffer to the MRTI committee and its lead researcher, could not be reached for comment Tuesday. But last Friday he denied that the committee had purposely chosen the timing or location of the meeting to make it difficult for the corporations to comment. The committee normally meets on a Thursday-through-Saturday schedule, and does the bulk of its work on Friday.

     Somplatsky-Jarman said the committee will now talk with senior management of the firms in an effort to persuade them to change practices that enable or support violence in Israel and/or Palestine.

     ITT’s Martin said his company would be willing to engage MRTI in conversations about its operations. “We talk to all of our shareholders when they have an issue,” he said.

     According to the MRTI committee, ITT supplies communications, electronic and night vision equipment used by Israeli forces in the occupied territories.

     “We supply many companies who are allies of the United States,” Martin said, refusing to name the company’s customers in Israel and Palestine. “We serve the international market, in strict compliance” with the laws of the U.S. Department of Commerce, he said.

     A similar stance was taken by Citigroup, of New York City, which was cited by the MRTI committee for allegedly moving substantial sums of money for suspected terrorists through Arab Bank. Funds reportedly were transferred to Arab Bank from charities based in the United States, Saudi Arabia, Kuwait and elsewhere groups later disclosed to be “front organizations” used to funnel money to terrorist organizations.

     “Our stance hasn’t changed,” said Jeanette Volpi, Citigroup’s manager of public affairs. “We just feel that any assertion that we support terrorism, it’s an outrage. We have first-rate controls. At this point we are really just sort of sticking to our statement.”

     Paul Jackson, a spokesperson for United Technologies, of Hartford, CT, was also sticking to his earlier statements. He described his company as “an ethical and responsible corporation,” and said, “At this point there is really nothing new to say.”

     Officials of Caterpillar, based in Peoria, IL which has attracted the most public attention for its connection to Israel and Palestine did not return calls from the Presbyterian News Service.

     MRTI contends that Caterpillar’s bulldozers and other heavy equipment are used by the Israeli military and privately owned companies under contract with the Israeli government.

 
             

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