Thursday, Nov. 14, 1985
Campus/Area
University Daily Kansan
9
Divestment decision given Both sides agree on ruling
By Jennifer Benjamin Of the Kansan staff
The president of the Kansas University Endowment Association and a member of the KU Committee on South Africa both said yesterday that Attorney General Robert Stephan's opinion on divestment released Tuesday agreed with what each side had been saying all along. Since last spring, the KU Committee on South Africa has been struggling to make the Endowment Association divest from companies doing business in South Africa, but the Endowment Association said the "prudent person" state statute forbade it to do so.
In his opinion Tuesday, Stephan said the "business care" rule applied to universities and endowment associations, not the prudent person rule, which he said applied only to cities and counties.
Jane Ungerman, Lawrence senior and a member of the committee, said, "I'm really happy with the opinion. That is going to support what we've been saying all along.
"The opinion strips away KUEA's legal argument. There is nothing stopping them from divesting. They are choosing not to do the moral thing and divest."
Both the prudent person and the business care statutes require that money invested through organizations be handled in a wise manner
Todd Seymour, president of the Endowment Association, said he was aware of the business care rule.
'The opinion strips away KUEA's legal argument. There's nothing stopping them from divesting They are choosing not to do the moral thing.'
— Jan Ungerman Lawrence senior and member
Africa
KU Committee on South Africa
which Stephan said applied to universities and endowment associations
"I don't see a great deal of difference between the two," he said.
The business care rule allows the political aspect to be considered only as it affects the financial aspects, Seymour said.
"That's exactly what we've always contended," he said.
Seymour said most companies in South Africa were offering jobs and working, with the government to change the system of apartheid.
A statement released Tuesday by Seymour said, "Consequently, unless and until such ownership is no longer economically prudent, the Association must refrain from divesting itself of all stock ownership in any
corporations doing business in South Africa."
Africa. Stephan's opinion stated that the business care rule required the exercise of ordinary business care and prudence, based on the facts available at the time.
Neither standard allows for divestment on moral grounds alone, the opinion said. Divestment under the prudent person rule would have to be on grounds that economic conditions in South Africa make investments less than prudent.
Under the business care rule, political and economic situations in the country, as they affect the security of the investment, may be considered in an investment decision, the opinion said.
Stephan's opinion was requested separately by State Rep. Jessie Branson, D-Lawrence; State Rep. Betty Jo Charlton, D-Lawrence; and State Rep. Henry Helgerson, D-Wichita, at the end of September.
Chris Bunker, Prairie Village third-year law student and a member of the KU Committee on South Africa, said that according to the opinion, the Endowment Association had been wrong in relying on the prudent person rule.
"My opinion is that even under the prudent person standard, the issue of political climate can be considered." Bunker said.
"It's obvious to me that without aparthid, South Africa would be a good investment," he said. "With aparthid, there's just no safety involved with the investments."
Suzy Maet/KANSAN
One float's demise
Tau Kappa Epsilon members Lance Krankwainter and Jeff Schippers, both Hoxie sophomores, and Gary Workman, Cowlich sophomore, dismantle one of the last pieces of the fraternity's homecoming float.
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