Tobacco stocks only part of real issue: privatization

  Michael Weiner Weiner is a fourth-year
history and political science student. His column analyzing issues
of interest to the UCLA community runs on Mondays. Send feedback to
[email protected].

The UC Board of Regents’ supposedly
“controversial” decision over whether or not to divest
from tobacco company stocks actually turned out to be pretty
uncontroversial, as the anti-tobacco initiative sailed through
votes by both the investments committee and the full board last
week.

Shielded by the justification of fiscal responsibility,
conservative regents saw little point in flouting the social and
public-health concerns of UC President Richard Atkinson and some
influential faculty members. Indeed, with so many potential
liability suits aimed against the tobacco industry, their stocks
aren’t such a safe investment anyway.

All of the hubbub surrounding the decision stemmed from a
reorganization of the university’s investment portfolio in
the wake of former UC Treasurer Patricia Small’s acrimonious
departure last August.

Over the past month, the regents spent a lot of time talking
about what turned out to be essentially a non-issue. Not
surprisingly, all of this financial mumbo-jumbo belies a more
important question: Why are UC officials so concerned about the
stock market?

Isn’t this an educational institution fully owned and
operated by the citizens of this state? Where in the UC’s
three-fold mission of education, research and public service does
it say anything about making a quick buck on Wall Street?

The easy answer is that every major university in this country,
both public and private, has significant long-term investment
portfolios, partly to ensure the solvency of staff retirement
pensions. UCLA’s $1 billion endowment is a hybrid of
systemwide investments governed by the regents and campus-based
investments governed by the UCLA Foundation. But it only makes up a
little more than 1 percent of the campus’s operating
budget.

The University of California has maintained a stock portfolio
for years, but over time, its relative importance has increased in
the face of dwindling contributions from the state and federal
governments.

Worrying about the stock market is one indication of the trend
toward the privatization of this public university. The tobacco
investment question is just one in a long line of instances when
university officials were forced to spend an inordinate amount of
time thinking about monetary rather than academic issues. Take just
two recent examples at UCLA:

• In October 2000, descendants of the late composer and UCLA
  professor Arnold Schoenberg were shocked to find out that the
  university had renamed Schoenberg Auditorium after UCLA alumnus Mo
  Ostin, a music industry executive who donated $5 million to the
  university. Apparently, naming rights go to the highest bidder,
  even if the room in question already has a name.
• In April 2000, UC President Atkinson and UCLA Chancellor Albert
  Carnesale capitulated to narrow ideological interests by agreeing
  to name the new UCLA Medical Center after Ronald Reagan when
  friends of the former president put together a $150 million
  donation. The sad irony is that during his tenure as California
  governor, Reagan was no friend of the university ““ slashing
  its budget, presiding over the institution of tuition fees,
  repressing academic freedom and brutally crushing student
  protests.

My point here is not to blame university officials for thinking
about financial issues. Indeed, with the state contributing only
about 21 percent of the university’s budget, the term
“public university” has become almost a misnomer, and
the aggressive pursuit of private funding sources is now an
unfortunate necessity. But an academic environment that expends
resources on building-naming derbies and pseudo-controversies over
tobacco stocks is not something to be celebrated.

These are sideshows that divert attention from the real issues:
a crisis in student diversity, the specter of overcrowding
threatened by “Tidal Wave II,” and yes, ever-dwindling
funding from the state government.

In a Los Angeles Times op-ed piece published this summer,
Carnesale admitted, “I do spend a good bit of time thinking
about funding for public universities ““ and worrying about it
…” (Aug. 6, 2000). He went on to justify his concern,
especially with regard to maintaining UCLA’s world-class
hospital.

But stumping for dollars is not what the leader of a public
university is supposed to do with his time.

The privatization of the University of California is part of a
more general trend in this country, in which our most cherished
public institutions are increasingly being co-opted for profit by
the private sector.

This is the real problem, something the regents should keep in
mind the next time they bicker over the details of their stock
portfolio.