A bill that would prohibit the D.C. government from investing in banks and corporations that do business with South Africa and Namibia was approved yesterday, 4 to 0, by a committee of the City Council.
The measure, introduced by council member John Ray (D-At Large) to protest apartheid, would require any existing city investments in such institutions to be withdrawn. It would most sharply affect the city's retirement board, which would be required to shift about $63.5 million of its $331.7 million in investments from such companies as Bechtel, IBM, Mobil, Coca-Cola and U.S. Steel.
Ray, chairman of the Consumer and Regulatory Affairs Committee that approved the measure yesterday, said he has enough support to pass the bill when it is brought before the full council next month.
"We know this type of legislation works and it's worked in other places," Ray said.
Legislation to withdraw public funds from companies that invest in South Africa was approved last year in Massachusetts, Michigan, Connecticut, Pennsylvania and Delaware. This year, 21 states and eight cities and counties are considering or have adopted similar legislation.
Frank Higgins, chairman of the D.C. retirement board, and several other board members are known to oppose Ray's bill, although the board has not taken a formal stand. Higgins could not be reached for comment yesterday.
Higgins complained about the bill to Rep. Stan Parris (R-Va.) last March, arguing that it was financially unsound, according to an aide to the congressman. Parris, who represents about 4,000 retired D.C. employes in his Northern Virginia district, then threatened to try to get Congress to overturn Ray's bill if it is approved by the City Council.
However, Parris has softened his stand since then. "We haven't taken a hard and fast position on it," Richard B. Leggitt, Parris' administrative assistant, said yesterday.
"The congressman in no way supports apartheid or what's going on in South Africa," Leggitt added. "He is concerned about any legislation that impacts on the soundness of that city pension fund."
Under Ray's bill, no public funds could be deposited or remain in any bank or financial institution that has outstanding loans to South Africa and Namibia, nor could those funds be invested in corporations doing business in those countries.
The proposed legislation specificially would apply to those funds under the control of the mayor, the retirement board and the D.C. Housing Finance Agency.