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SACRAMENTO — The subtle tug-of-war over who owns the investments of the Presbyterian Church (U.S.A.) managed through the Presbyterian Foundation and its trust company is in the process of being more formally addressed by the foundation.
“The foundation has proposed … a social responsibility committee of the board” that will review requests made by MRTI and the General Assembly Council and then take action, Dennis Murphy, executive vice president and chief investment officer for the foundation, told the foundation’s investment committee here on Friday.
The New Covenant Trust Company, a wholly owned subsidiary of the foundation that also manages investments for the PC(USA), also has formed a “parallel” committee for the same purpose, he said.
In the past, the foundation and trust company took the recommendations of the General Assembly Council and voted proxies as requested “straight up,” Murphy told the committee. “We will now have a more formal committee to review that, and if the way be clear, do exactly the same.”
The bottom line: “The assets are owned by the trust company and the foundation,” he said.
The issue of who actually owns the stock — the PC(USA) or the foundation and the trust -- has been skirted throughout this year as the denomination’s Mission Responsibility Through Investment (MRTI) committee fulfills its charge from 216th General Assembly to begin a process of phased selective divestment from multinational corporations with business practices believed to contribute to violence in Israel and Palestine.
The question also plagues the Board of Pensions of the PC(USA), which also oversees investments for the denomination.
In August, MRTI named five corporations — Caterpillar, Citigroup, ITT Industries, Motorola and United Technologies — to begin “progressive engagement” with about their activities, with the ultimate goal of getting the companies to change their ways. Stock in all five companies is held either by the Board of Pensions, the Foundation or New Covenant Trust Company.
If the companies do not alter their practices after talks, MRTI could then ask the General Assembly Council (GAC) to authorize the filing of shareholder resolutions to pressure the corporations. The final option is for the MRTI committee to request that the GAC ask the GA to put corporations on a divestment list.
Yet, Murphy said, MRTI can’t take shareholder action or engage in dialogue as shareholders because “at this point and time the General Assembly and MRTI do not own any stock.”
“They can’t propose any shareholder resolutions because they don’t own any shares,” he told the committee. They work through us “to accomplish that portion of the mission.”
Murphy said the foundation needs to be notified in writing by MRTI before any talks with companies as shareholders begin.
The Rev. Bill Somplatsky-Jarman, the PC(USA) staff person assigned to MRTI, declined to comment on the new foundation committee, saying, “I haven’t seen anything that was proposed, so there is nothing to comment on.”
Foundation President and Chief Executive Officer Bob Leech concurred with Murphy. “We’re accountable for the money, the stock and how the stock is voted,” he said.
Leech said the new committee is an effort to make sure the foundation and the trust understand why MRTI has selected the companies to engage, so the foundation and trust can adequately answer to its shareholders.
“We want to be sure we’re satisfied that they (MRTI) have adequate documentation,” he said. “We’re simply trying to be good stewards.”
Leech said he would not speculate about what might happen if the foundation and the trust do not agree with MRTI’s — and ultimately the GAC’s or GA’s — requests.
"To this point we haven’t had any disagreements,” he said.
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