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Retirement Commission member resigns over city's approach to divestment

Charlottesville’s Retirement Commission is taking a measured approach in moving city investments from companies associated with fossil fuels and weapons manufacturing.

But the commission’s preferred method didn’t sit well with one member, who abruptly resigned and left a virtual meeting on Wednesday morning.

Commissioner David Swanson made a motion to “immediately” direct the city’s investment managers to divest resources from the “25 largest” weapons and fossil fuel companies by Dec. 31. Swanson’s motion included a list of several companies including Chevron Corp., Lockheed Martin Corp., Northrop Grumman Corp. and ExxonMobil.

Swanson’s motion did not receive a second and therefore did not pass. Commissioner David Hughes said many of his concerns were with the definition of defense companies.

“Most people think we ought to defend our country and to do that requires certain things,” he said.

Swanson then interjected, saying “The same companies arm both sides in every war. You can’t pretend they’re just arming one country.”

Swanson then announced he was resigning immediately, saying the commission obviously needed someone with a “more malleable sort of morality.”

“I hope for God’s sake you do something sometime in the coming decades,” he said before logging off the call. “There is such a thing as being too late.”

After Swanson left, Hughes said “I don’t particularly feel the loss there” and another commission member could be heard chuckling, although the video feed was only focused on Hughes.

Following the meeting, Swanson made a lengthy post on his personal blog lambasting the commission.

“The retirement commission is not greedy. It is legally bound to not risk losing any money,” he wrote. “But it was given piles of evidence that it wouldn’t risk losing money, and still failed to ever wrap its collective mind around the possibility of doing anything.”

The commission, which oversees the city’s retirement plans at a policy level, was meeting to discuss potential changes to its investment portfolio.

The change is part of a process started in June 2019 when the City Council voted to support removing operating investments from companies associated with fossil fuels and weapons manufacturing.

The resolution says that the council “declares its support and encouragement” of anyone acting on behalf of the city’s investments to “divest all City operating funds from direct security investments in any entity engaged in the production of fossil fuels or the production or upgrading of weapons and weapons systems.”

The resolution did not contain a mandate, it just broadly supported the effort.

City documents indicate Charlottesville’s total investment portfolio ranges from $50 million to $100 million throughout the year.

Last year, city staff reported that roughly $2.16 million is invested in weapons or fossil fuels companies through the city’s retirement plan or operational funding investments. According to staff, the city has retirement investments of about $1.56 million in defense companies and $818,000 in energy companies, with another $788,000 tied to bonds issued by energy companies.

Treasurer Jason Vandever said during Wednesday’s meeting that the portfolio rarely includes “more than one or two” fossil fuel companies and is never more than 10% invested in companies with ties to weapons manufacturing.

Other commissioners mostly supported the goal of Swanson’s motion, but thought it lacked necessary policy direction. Hughes said his opposition centered on the motion singling out companies to not invest in rather than focusing on where the city wants to put its money.

The commission largely supported exploring ESG Investing, which focuses on environmental, social and corporate governance factors to determine the sustainability of investments. The investment strategy is often used by companies focused on combating climate change or tackling issues of equity.

Commissioner Joe Hatter, a captain with the Charlottesville Police Department, questioned if the commission should even be telling its investment managers how to direct money.

“I have no opposition to the proposal or setting up a framework, but I just don’t know that that’s what this board is supposed to do; that we’re supposed to guide investment strategies based on political, personal or any other goals or beliefs. … My understanding is that our duty is to look after the plan and the benefits to the retirees,” he said. “This idea that we have to tell them based on a political or personal feeling what to do, I’m against that.”

Councilor Heather Hill, a representative on the commission, said that “it’s important that we look at things that may reflect the values of the city.”

Hatter disagreed, saying that “I don’t think we need to reflect the values of the city, we need to reflect the values of the retirees who benefit from this.”

Hill said that data shows that the city can both stick to its values and get the best benefit for retirees.

The commission entertained the idea of inviting retirement plan beneficiaries to a meeting to weigh in on potential investment strategies.

Dahab Associates Inc. is expected to come to a future meeting and present information on how shifting investments would affect the city’s portfolio. The commission also expressed interest in partnering with BlackRock, an investment management company that has focused on climate change, diversity and equity, according to the Financial Times.


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