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March 17, 2008 01:00 AM

Methodists to vote on Caterpillar divestment

Church's pension fund could be forced to sell its $5.2 million stake in the tractor maker

Doug Halonen
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    David Zellner

    EVANSTON, Ill. — The United Methodist Church's general conference is slated to vote in late April on a proposal that would force the church's $16 billion pension fund to divest its stake in Caterpillar Inc. because some church members object to the Israeli military's use of Caterpillar tractors in its ongoing conflict with Palestine.

    But the proposed resolution has drawn opposition not just from the Jewish community but from the church's own pension fund.

    According to church divestiture advocates, the pension fund's investment in Caterpillar should be given the heave-ho because Israeli defense forces are using the Peoria, Ill., company's tractors for “the illegal destruction of Palestinian homes, orchards and olive groves in the occupied territories, and to clear Palestinian land for illegal Israeli settlements,” according to the text of the proposed resolution.

    “We are committed to ensuring that our denomination's finances are used in a manner consistent with Christ's teaching, our beliefs, multilateral agreements and international law,” the resolution added.

    The proposed resolution is scheduled to be voted by the church's general conference, its policy-setting body, during its April 23-May 2 meeting in Fort Worth, Texas.

    If a majority of the 992 church delegates to the conference approve the resolution, it will be the first time the church has ordered its pension fund to divest from a particular company, according to David Zellner, chief investment officer of the General Board of Pension and Health Benefits, Evanston, Ill.

    The fund currently owns 71,472 Caterpillar shares with a market value of about $5.2 million, Mr. Zellner said.

    The proposed resolution is opposed by the church's pension fund officials on grounds that it is better to use traditional shareholder advocacy tools to try to influence companies, according to Mr. Zellner.

    “We continue to be in dialog with Caterpillar, following our established policy to engage corporations,” Mr. Zellner said.

    The church board that drafted the proposed resolution felt that conversations with Caterpillar had gone on long enough, said Wayne Rhodes, spokesman for the church's General Board of Church and Society, Washington, which is responsible for advocating on social justice issues for the church. “It's time we took action,” Mr. Rhodes said. The New England conference of the United Methodist Church's divestment task force issued a report June 4, 2007, calling for voluntary divestment of 20 companies that task force members felt were “supporting in a significant way the Israeli occupation of Palestinian territories.” Among the companies on the list: Caterpillar, Boeing Co., General Dynamics Corp. and Lockheed Martin Corp.

    But the New England conference doesn't speak for the overall church, said Diane Denton, a spokeswoman for the church. “Only the general conference can make decisions for the church about divestment,” she said. The New England conference is just one of 63 regional conferences.

    Drawing criticism

    The proposed resolution has been drawing criticism from some Jewish organizations.

    “It's an unfair, ineffective approach to a complicated problem,” said Rabbi Eric Greenberg, director of interfaith policy for the Anti-Defamation League, New York. “It ignores the complexity of the conflict and it unfairly singles out Israel while ignoring the continued attacks on Israeli citizens,” Mr. Greenberg added. Earlier this month, a gunman killed eight students in a Jerusalem rabbinical seminary.

    Said the church's Mr. Rhodes in response: “This is not divestment from Israel; this is divestment from one company whose products are being used inappropriately by Israel. We just believe that we shouldn't be involved in policies or practices that are morally reprehensible, and we believe that what Israel is doing to Palestine is morally reprehensible.”

    The United Methodist Church, which has 11 million members worldwide, is not the first major U.S. religious denomination to consider targeting Caterpillar for divestiture. The Presbyterian Church (USA)'s general assembly in 2004 authorized church officials to consider a variety of actions, including divestment, to influence U.S. companies whose businesses might be contributing to violence by Israelis and Palestinians, including Caterpillar, said Mindy Marchal, the Presbyterian Church's communication associate for compassion, peace and justice.

    A Caterpillar representative said his company complies with all laws and has no right or ability to tell its customers how to use its products. “We have no intention of participating in a debate that appears aimed not at our company but at the policies established and controlled by the governments of the United States and Israel,” said Jim Dugan, a Caterpillar spokesman.

    Contact Doug Halonen at [email protected]

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