In a meeting yesterday afternoon with several members of the Board of Trustees, representatives from the Wesleyan Student Assembly (WSA), Students for Ending the War in Iraq (SEWI) and Wesleyan College Republicans (WesReps) engaged in a heated discussion on divestment from weapons contractors General Dynamics and Raytheon.

In response to SEWI’s demands for more transparency in the University’s investment processes, Tom Kannam, the University’s chief investment officer, gave a detailed presentation on endowment and investment procedures. After the meeting, SEWI members said they believe divestment is more logistically possible than they had previously thought.

“The financial impediments aren’t as big as we thought they were,” said SEWI member Kathy Stavis ’10.

Kannam explained that the investments in General Dynamics and Raytheon fall into a very liquid category of the University’s investments, which means that they are easy to sell. Investments in hedge funds, on the other hand, are difficult to sell, as they require a one-to-three year investment commitment.

An impassioned debate followed Kannam’s presentation. SEWI members struggled to push the discussion, which focused on the idea of socially responsible investing, back to the issue of immediately divesting from weapons contractors.

“The actual proposal is not really the issue any more,” said SEWI member Lucas Guilkey ’10, asking meeting attendees to address the divestment proposal.

SEWI members were concerned that plans for a socially responsible investment policy would push divestment out of the spotlight.

“It was never SEWI’s goal to write an investment policy,” said Erik Rosenberg ’08, SEWI member. “My main fear is that writing this policy will overshadow divestment from General Dynamics and Raytheon.”

Michael Klingher ’78, one of three trustees on the working group for investor responsibility—formed specifically to address SEWI’s proposal for divestment from weapons contractors—said he felt that establishing a more specific investing policy would be beneficial in the long run.

“It might be a new weapons contractor we’re invested in tomorrow,” Klingher said. “Then it doesn’t really matter if we’ve divested from General Dynamics and Raytheon.”

Members of the investor responsibility working group, Klingher, Karl Furstenberg ’67 and Karen Freedman ’75 P’05, who participated in the meeting via conference call, did not explicitly support changes to the University’s investment policy, but seemed to be in favor of heading in that direction. It was unclear, however, what changes would be made.

Stavis brought up the possibility of implementing screens, which are investment criteria or guidelines that an institution can adopt. Harvard, for example, has refused to invest in any company that manufactures tobacco products. The possibility of establishing criteria for divestment was also discussed.

While SEWI does not plan on making the creation of a socially responsible investing policy its chief goal, members say their push for divestment is helping to create a framework for future divestments and other future demands for investment changes.

“In a way we’re creating a method of divestment,” Rosenberg said. “Everything we’ve been doing is setting precedents for divestment. Sometimes the best way to figure how something should be done is to put it into practice. By doing it, we’ll learn the best way to form divestment procedures.”

The discussion on socially responsible investing also brought about a larger debate on the differing definitions of “socially responsible,” with meeting attendees acknowledging the difficulty of creating a socially responsible investment policy that would appeal to the majority of the University community.

Members of WesReps attending the meeting were frustrated with the discussion’s focus on social responsibility.

“Would it really make you sleep better at night to know that we were divested from these two corporations?” asked Eugene Wong ’08, president of WesReps.

Although much of the discussion focused on the possibilities of socially responsible investing policies, trustees brought up the financial implications of divestment, or a shift in investment policy.

The University’s current investment policy is “to maximize returns, while controlling for risk and Wesleyan’s cash need,” according to Kannam. The trustees were concerned that any change in investments would be fiscally detrimental.

In his presentation, Kannam explained that the investment office works with money managers; expert investors who direct endowment money to various stocks, bonds, private equities, real estate and other investments. Chair of the Board of Trustees Jim Dresser ’63, Kannam, and members of the investor responsibility working group were worried about jeopardizing the University’s relationships with its money managers by asking them to make adjustments.

“There is a possibility of losing good money managers if we ask too much of them,” Dresser said. “They could say, ’These people are hard to work with’ and might decide that they’re not willing to work with us anymore.”

Dresser also pointed out that socially responsible money managers have typically underperformed those who do not have similar constraints. Stavis, who had researched socially responsible investing, said she found that socially responsible money managers were as financially productive as traditional money managers.

When Guilkey asked the trustees if they had looked into how money managers had responded when clients had asked for investment policy changes, such as screens, in the past, trustees said they had not.

“I think we were expecting them to do research like that before the meeting, so it could be a smooth, continuous process,” Rosenberg said. “I would have more faith in the process if they did research themselves. We want a dialogue between students and trustees. I want to emphasize that there has been dialogue between students already.”

Rosenberg was frustrated that WesReps had been invited to the meeting, because SEWI was not notified of the group’s invitation to the meeting beforehand, and also because he felt it prevented SEWI from discussing their proposal with the trustees.

“I was upset because we worked hard on this proposal, and we didn’t get a response,” Rosenberg said. “We wanted to flesh out the arguments with the trustees, and hear what they thought.”

The investor responsibility working group plans on meeting with SEWI within the next few weeks, and will update the Board of Trustees on the divestment discussion at their Feb. 29 meeting.