by Jonathan Ehrlich, Vice President for Administration and Finance / Chief Sustainability Official
To the Caucus Co-Conveners:
As you are aware, under the college’s procedures this resolution was referred by Caucus to the president. It was his prerogative how to respond, and he chose to refer the recommendations to the Administrative Policy Committee for its consideration. This committee spent two meetings reviewing the various issues involved, and deciding on a course of action. The committee’s response, while not agreeing to certain aspects of the resolution, did recommend to the president development of guiding principles upon which to base the conduct of college business. From the committee’s viewpoint, these principles will ultimately affect and guide business relationships on a broad scale and on a long-term basis. It was up to the president to determine if he found the committee’s response acceptable, which he did. At this point that is where the issue stands, as the president has indicated in a letter that his decision on the proposal is final. The Administrative Policy Committee intends to move ahead next fall with the work involved in developing guiding principles. This will be done in a manner which includes input from various campus constituencies and in conjunction with President Steve Solnick as he develops his vision for this aspect of the college.
Over the past several months multiple individuals have been involved in meetings and consideration of this issue, including the current and incoming president, the chair of the Board of Trustees, the Business and Finance Committee of the Board of Trustees, the Vice President of Administration and Finance, the Controller, and the members of the Administrative Policy Committee. Without revisiting the issues raised nor undertaking a review of the pros and cons of Bank of America’s investment activities — both those which fund a range of industries and those which fund multiple social service activities –, it must be recognized and is indisputable that the college has a long-term financial relationship with this bank that would literally cost the college millions of dollars to unwrap at this time (this refers to a hedge swap for the bond which funded construction at the college). That course of action is something that the trustees agree is not realistic; changes in the country’s financial markets may change this situation, at which time it would be feasible to reconsider this banking relationship. It should be clarified that Bank of America provides financing to the college for a number of activities, and it handles operational banking accounts which are too complex for many smaller financial institutions. Another way of saying this is that the bank is only a pass through custodian for college funds, and has through its lending made possible significant capital investment on the campus. The college’s endowment is NOT invested through Bank of America.
The college certainly does not condone activities by any of its business partners which may have a negative environmental or social impact, but it does not necessarily always have the ability to respond by eliminating this relationship, nor is this necessarily the best response. When the college has an ongoing relationship with a business, there is an opportunity to let its views be known and to attempt to exert pressure to affect the business’s practices. Once the college “takes itself out of the game” by removing its business, it has lost any leverage it may have had. This is an important point, if the college wishes to be in a position to try to influence business practices.
As a client of Bank of America, the college may have an opportunity to have a positive impact on its policies and practices, if it approaches the bank in a strategic and informed manner. I can assure students that after the development of the guiding principles which will be developed by the Administrative Policy Committee, I am prepared to present these to Bank of America and other business partners, first to ensure that they understand the values of the college, and second to try to positively influence practices.
I sincerely respect the views and the commitment of those students who feel that the college should sever its financial relationship with Bank of America. In return, I hope that they respect the processes for making decisions at the college which are in place, as well as the good intentions of all those who have considered this complicated issue.