In the face of increasing pressure from congressional critics of South Africa's apartheid system of segregation, the Smithsonian Institution has sold approximately one-fourth of its $41 million investments in U.S. corporations that do business in South Africa. The sale was announced yesterday at a congressional hearing by Rep. Norman Mineta (D-Calif.), a Smithsonian regent.
The $9.6 million sale consisted of stocks in corporations that have failed to sign the Sullivan Principles, voluntary guidelines for U.S. corporations designed to improve the lives of their black South African employes. The stocks sold include interests in 15 corporations. Those companies include Boeing Co., United States Steel Corp., Champion Spark Plug Co. and Chesebrough-Pond's Inc., according to the Smithsonian. The sale represents 6 1/2 percent of the Smithsonian's $146 million private investment portfolio.
Congressional critics of apartheid present at yesterday's hearing said they hoped the partial divestment was a first step toward complete divestiture. "We're delighted to see your voluntary approach," Rep. Mary Rose Oakar (D-Ohio) said. "Still, it's just the tip of the iceberg in terms of the total portfolio."
Smithsonian officials cautioned, however, that the Institution's governing board has not yet considered whether to divest the remaining 22 percent of its portfolio still invested in companies that do business in South Africa. The Board of Regents includes Supreme Court Chief Justice Warren Burger, Vice President George Bush, as well as six members of Congress.
In recent months numerous U.S. universities and private foundations have begun divestiture of investments in South Africa or are considering such action. The Smithsonian, with its own endowment and unique quasi-federal status, appears to be the first government-related entity to make such a move, however, in the face of the Reagan administration's disapproval of the tactic.
At yesterday's hearing, Smithsonian officials also disclosed that an additional $13 million is invested in international money funds that in turn invest in foreign corporations. Several of those corporations are headquartered in the South African capital of Johannesburg. (Smithsonian assistant treasurer John Clarke said late yesterday that he did not know how much of that $13 million was actually invested in business in South Africa, but estimated it at about $2 million.)
The hearing was chaired by Oakar, principle sponsor of legislation that would require the Smithsonian to divest itself of its controversial South African investments. At least a dozen members of Congress, including Reps. William Clay (D-Mo.), William Gray III (D-Pa.), Cardiss Collins (D-Ill.) and Del. Walter Fauntroy, joined Oakar in urging complete Smithsonian divestiture.
The Oakar bill has been cosponsored by more than 40 House members. Several reminded Smithsonian officials present yesterday that the Institution derives at least 70 percent of its $231 million annual budget from federal tax dollars.
Smithsonian Undersecretary Dean Anderson also testified that the Institution had been contacted by State Department officials who had expressed that department's "unhappiness" at the Smithsonian's partial divestment. Anderson testified that Director for South African Affairs Robert Gelbard had requested the Smithsonian notify the State Department in advance the next time it considered any divestment.
Gelbard said late yesterday that the State Department has no authority over the Smithsonian and that his telephone call was an offer of counsel. "There is no presumption that I'm trying to tell them what to do," he said. "However, I told them it certainly would be useful for us to offer them advice, as we do to companies and universities to give them some context on the situation in South Africa."
Anderson also testified that immediate divestiture of all Smithsonian investments in companies with business in South Africa would cost the institution about $500,000. That figure would decrease, he said, if divestiture were delayed. The Oakar bill calls for divestiture within a year of the bill's passage.
Oakar yesterday called the $500,000 insignificant in view of its symbolic importance. "I would suggest with all the brilliance of the Smithsonian that you could pick up the $500,000 somewhere else," Oakar said. "I find it supremely ironic that somewhere down the line you might use that $500,000 to buy an artifact to explain African culture to the American people, and you would get that money from investment in a government that is one of the most repressive on earth. I think the American people would forgive you if you couldn't purchase something because you were losing a little money in your portfolio."
The Oakar bill is one of a number of pieces of recent legislation from a Congress increasingly at odds with the Reagan administration's four-year-old policy of "constructive engagement" toward South Africa. That policy has employed quiet diplomacy and occasional public reprimands in an effort to coax the white South African government into concessions to the nation's black majority.
Earlier this month the House of Representatives approved by a margin of 2 to 1 a bill that would impose tough sanctions on South Africa. The Senate Foreign Relations committee has approved similar, if less far-reaching, legislation.
Representatives who testified at the hearing said the Smithsonian's portfolio was out of keeping with its humane mandate, and castigated the Smithsonian for choosing, since the investments became an issue last month, to concentrate on corporate adherence to the Sullivan Principles.
Those guidelines, drawn up in 1977 by General Motors Board member Leon Sullivan, are considered by many critics of apartheid to have had only cosmetic effects, in part because U.S. corporations employ less than one percent of the black South African work force.