An Unprecedented Move
This Monday, the Harvard Corporation will consider two unprecedented recommendations from a University advisory committee: that Harvard take anti-management stands in supporting one shareholder resolution prohibiting a company's compliance with the Arab boycott, and another limiting Gulf Oil Corporation's ability to make illegal political payoffs overseas.
The Advisory Committee on Shareholder Responsibility voted this week to urge that the University support a resolution prohibiting an American bank, Manufacturers Hanover Trust, from processing letters of credit that require certification of compliance with the Arab boycott.
Letters of credit facilitate the transfer of money from foreign banks to American banks when foreign companies import American goods.
Arab businesses have refused to transfer funds to U.S. banks if they find that the money will be used to pay for goods that are of Israeli origin or are manufactured by companies blacklisted by the Arab League.
The ACSR had never previously supported a resolution seeking to curtail the Arab boycott. Last year, the committee reasoned that the federal government must take the lead role in curtailing the boycott.
The committee's 6-to-5 anti-management vote on the Gulf Oil resolution seeks to force Gulf to take a humiliating action: to add to its articles of incorporation an amendment specifically stating that the multinational corporation will not make illegal political payoffs overseas.
ACSR's support of the resolution represents the first time ever the committee has opposed the management of Gulf Oil, a corporation that has long occupied a large (currently about 1 per cent of Harvard's liquid assets) and comfortable niche in the Harvard portfolio.
Gulf Oil has long been a thorn in the University's side. In 1972, students took over Mass Hall for several days to protest Harvard's shares in the company, which was then supporting the Portuguese colonial regime in Angola.
ACSR members said this week their vote reflected their general disappointment with Gulf Oil, which--while under federal investigation in 1974--made public details of its 15-year history of illegal payoffs overseas totalling nearly $20 million.
Although the University ordinarily agrees with ACSR stands on resolutions, it remains unclear whether the Harvard Corporation will actually cast the anti-management votes when it sends its telegrams to Gulf's and Manufacturers Hanover's shareholders meetings this week.