Foundation official says divestment may not happen By John H. Adams The Layman Online Thursday, September 2, 2004 Like the Board of Pensions of the Presbyterian Church (USA), the Presbyterian Foundation may find it tough to comply with the General Assembly's call for divestment of stocks in corporations that do business with Israel. Mark Klemm, senior vice president of development for the Presbyterian Foundation, told The Layman Online that the foundation faces the same requirements as the Board of Pensions, which must rank the fiduciary responsibility to its beneficiaries over any social policy that might reduce investment income. Klemm offered his comments as a followup to a statement issued earlier by Robert W. Maggs Jr., president and chief executive officer of the Board of Pensions of the Presbyterian Church (USA). "Even if there were such a [divestment] policy, the Board of Pensions must, under current laws, act for the sole and exclusive benefit of plan participants," Maggs said in a "Divestment Discussion" newsletter to Plan members on August 13. Klemm said the foundation is required to honor contracts with donors who buy lifetime annuities that will eventually benefit denominational programs of their choices. The foundation provides donors who buy the annuities with a guaranteed annual rate of return until the donor's death. Klemm says investment decisions cannot be altered in a way that would threaten the Foundation's ability to meet its obligations. "The fact is, nothing may come of all of this," Klemm said of the General Assembly's call for divestment. Denominational officials have been attempting to smooth over the General Assembly's resolution on Israeli-Palestinian issues. They've even suggested that the assembly didn't say what it said. Stated Clerk Clifton Kirkpatrick recast the assembly action in his own words: "The assembly authorized exploration of a selective divestment of church funds from those companies whose business in Israel is found to be directly or indirectly causing harm or suffering to innocent people, Palestinian or Israeli. It did not approve a blanket divestment from companies that do business in Israel, as is being reported in some places." But the assembly's resolution said nothing about "companies whose business in Israel is found to be directly or indirectly causing harm or suffering to innocent people, Palestinian or Israeli." The resolution instructed the denomination's Mission Responsibility Through Investment Committee (MRTI) "to initiate a process of phased selective divestment in multinational corporations operating in Israel, in accordance to [sic] General Assembly policy on social investing, and to make appropriate recommendations to the General Assembly Council for action." The full text of the resolution is published on the Web through "PresbyTel GA Tracker." Use the words "Geneva Accord" for the search to download the resolution. Both the Board of Pensions and the foundation have been besieged with complaints from Presbyterians who are criticizing the General Assembly's statement that calls for disinvestment in the stock of companies that do business with Israel. The Board of Pensions and the foundation are operated independently from the denomination's corporate offices. The foundation has a $1.1 billion investment portfolio, according to its latest annual financial statement. Klemm pointed out that the foundation also manages the investment of $500 million in money that is set aside temporarily – such as funds raised for new church development. The Board of Pensions has a $6.2-billion investment portfolio.

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