The Smithsonian Institution is under increasing pressure from congressional critics of apartheid because of its substantial investments in U.S. corporations that do business in South Africa.
"The Smithsonian is a very humane place, and I am a supporter of the whole institution, but when I looked at their portfolio, I was very shocked," said Rep. Mary Rose Oakar (D-Ohio). She is the principal sponsor of new legislation that would require divestiture of present Smithsonian investments within a year of the bill's passage and prohibit future loans and investments in South African firms or companies that do business there.
As of March 31, the Smithsonian had 27 percent, or $38.3 million, of its $141 million endowment invested in corporations that do business in South Africa, according to Smithsonian officials.
At least 15 of those 48 corporations have not signed the Sullivan Principles, voluntary corporate guidelines designed to improve the living and working conditions for nonwhites employed by U.S. firms in South Africa.
"[The portfolio] is totally out of sync with the Smithsonian's mandate, which is to enhance people's understanding of . . . each other," Oakar said Friday. "I don't want to be in the position of embarrassing the Smithsonian. But, on the other hand, it to me is an embarrassment that they invest so much in South Africa, stimulating the economy of a country whose . . . whole philosophy is the antithesis of basic, simple human rights."
Rep. William L. Clay (D-Mo.), one of three principal cosponsors of the Oakar bill, echoed the concern. "In South Africa, conditions for blacks are intolerable. They are forced to endure unconscionable, unbelievable circumstances. The Smithsonian Institution has an obligation to reflect American abhorrence for apartheid."
Pressure for Smithsonian action of some kind is likely to increase in the weeks ahead as U.S. policy toward South Africa's apartheid system of segregation evolves.
Last week the House of Representatives voted by a wide margin to impose tough new sanctions against South Africa in an attempt to force an end to the system of racial discrimination there. That bill would ban new loans to and investment in South African businesses, stop the sale of computers and computer parts to that country and halt importation of South African gold coins.
The Senate Foreign Relations Committee approved a similar, but less far-reaching, measure last week as well. Both bills are viewed as a sign of Congress' increasing impatience with the Reagan administration's policy of "constructive engagement." That policy has employed quiet diplomacy and occasional public reprimands in an effort to coax the white minority-ruled South African government into making concessions to the nation's black majority.
Administration critics say the policy has produced scant results; the administration's position has been that the United States does not have enough economic leverage to pressure South Africa into making concessions.
The Oakar bill, cosponsored by Reps. Clay, Parren J. Mitchell (D-Md.) and Del. Walter E. Fauntroy (D-D.C.), would prohibit future investments as well as requiring that the Smithsonian divest itself of existing investments within one year of the bill's passage into law. The sanctions would be lifted once Congress determined apartheid had been abolished.
The Smithsonian owns and operates 13 museums and the National Zoo as well as numerous research facilities around the world. It was established by Congress in 1848 as an independent entity entrusted to the Board of Regents. Nonetheless, 90 percent of its $231 million annual budget is made up of federal funds, according to the General Accounting Office. (The Smithsonian uses its own formula and puts federal appropriations at 60 percent.)
The level of federal funding as well as the Smithsonian's benign image and mandate, say Oakar and others, are the reasons the Smithsonian should act quickly to shed its controversial investments.
"I don't think it steads well to have the House pass an antiapartheid act with hours of debate and have this be policy, and then have the most famous institution in the country investing a large part of its portfolio in South Africa," Oakar said.
"If they don't want to do it voluntarily, we want to see if a piece of legislation would help them address what I think is one of the most despicable situations in contemporary times."
So far, the Smithsonian's reaction has been cautious and noncommittal. After the Board of Regents' May meeting, where the issue was discussed at length, Smithsonian Secretary Robert Adams announced that the board had appointed a committee to determine which companies in its portfolio had not signed the Sullivan Principles and why.
(The Board of Regents is the Smithsonian's governing board. It is chaired by U.S. Supreme Court Chief Justice Warren Burger and its members include Vice President Bush, six members of Congress and nine private citizens. The meetings are closed to the public.)
Dean Anderson, a longtime Smithsonian employe who replaced outgoing Sam Hughes as Smithsonian undersecretary effective yesterday, said that the Smithsonian will wait for Congress to take final action on the various versions of antiapartheid legislation before deciding what to do.
"It's fair to say we're looking to the Congress for an expression of national policy," Anderson said. "I have the personal sense that we as a nation are moving forward to some kind of consensus. So the Smithsonian is seemingly a cork flowing in a huge river, bobbing along with the press of events."
Anderson added that the regents' task is complicated by their responsibility for the financial health of the Smithsonian. "It goes without saying that the whole notion of apartheid is morally repugnant to everyone here at the Smithsonian, as well as the Board of Regents . . . But the board also is charged with various fiduciary responsibilities. If it were a simple question of what is the most socially responsible thing to do without regard to fiduciary responsibilities, it would be easy."
Anderson said the board also wants to determine whether divestiture would have any effect on South Africa's apartheid policy, and learn more about the companies that have not signed the Sullivan Principles. "We want to know what reason nonsignatories might have for not signing up," he said.
Some companies may not have enough employes in South Africa to justify the expense of monitoring themselves, he suggested. "Or it may be that they're there to make maximum profit" and have failed to sign for economic reasons. "We can get a better basis to judge whether some stocks should be sold or whether morally we can hold our heads up and say, even though they're not signatories," the investments may be retained.
Virtually all of the 15 companies that have failed to sign the Sullivan Principles have direct investments in South Africa, but the size of those investments as well as the number of those corporations' employes in South Africa vary widely. Boeing Corp., for example, has a workforce of three and an investment of less than $10,000 while Chesebrough-Pond's Inc. has 529 employes and an investment of $13 million, according to the Washington-based Investor Responsibility Research Center Inc., a nonprofit corporation that monitors social issues for corporations and other investors.
Rep. Norman Mineta (D-Calif.) and the other two Smithsonian regents from the House of Representatives, Edward P. Boland (D-Mass.) and Silvio O. Conte (R-Mass.) voted in favor of the antiapartheid bill approved by the House last week. Boland and Conte also are ranking members of the House committee that appropriates the Smithsonian's budget each year.
The Smithsonian regents' decision to concentrate, at least initially, on the Sullivan Principles is likely to prove controversial with some critics. The voluntary guidelines, developed in 1977 by General Motors board member Leon Sullivan, are considered by many antiapartheid groups to have produced only cosmetic changes in South Africa. They point out that the approximately 370 U.S. firms in South Africa employ less than 1 percent of South Africa's black workers.
Oakar, a member of the House Administration Committee, will chair hearings on the subject later this month. Smithsonian Secretary Adams has said that a schedule conflict will prevent him from testifying, but Undersecretary Anderson is expected to testify as is Rep. Mineta.