Cleator’s Proposal Allows City Workers Divestiture Choice

San Diego Councilman Bill Cleator has proposed a “compromise” plan to allow individual city employees to divest their retirement funds from companies doing business in South Africa.

Cleator, who had earlier criticized divestiture as “intellectually dishonest,” said Thursday that his proposal would allow city employees who oppose the South Africa government’s policy of apartheid to invest in a separate “South Africa-free fund.”

Vested employees who choose to divest would have to sign statements releasing the city and Retirement Board members from all responsibility for any losses suffered in the separate accounts. Cleator acknowledged that he submitted the proposal for council approval in an effort to block a council vote for total divestiture.

An ad hoc committee formed by Mayor Maureen O’Connor to study total divestiture will meet today to discuss Cleator’s proposal. The council Rules Committee has already approved a measure that calls for total divestiture, and council members are scheduled to debate on Monday the committee’s recommendation to pull all pension funds from companies that do business in South Africa.

O’Connor spokesman Paul Downey said Thursday that the mayor has not had a chance to review Cleator’s proposal and would not comment.

Cleator has been a strong opponent of divestiture, comparing the policy to “ethical bankruptcy,” and has charged advocates of divestiture with being “profoundly naive” and engaging in “intellectual duplicity.” While saying that he strongly opposes apartheid, Cleator has also called divestiture an illegal intrusion into the affairs of South Africa.

On Thursday, Cleator said that his compromise plan is not a contradiction of his earlier stand on the divestiture issue.

“No, there’s no contradiction here. I still feel that way. . . . I don’t feel that what we’re proposing--total or partial divestment--will work in a positive fashion,” Cleator said. “But the alternative should at least be there.”

He said that he put the plan together in an attempt to persuade council members that total divestiture is not a good idea. Although he said he does not know how the compromise plan will fare with the council, Cleator acknowledged that his view on divestiture is not supported by his colleagues.

“I’m on the losing side of this issue,” Cleator said. “I’m a minority on the council, but there are people in the investment fund who feel strong enough (about apartheid) and are willing to risk their funds. . . . I have a responsibility to at least vent my feelings and have a responsibility to act for the retirees who worked for the city and expect their retirement funds to be administered in a responsible manner.”

In a memorandum he sent to the mayor and council members outlining his proposal, Cleator denied that he has reversed direction.

“I have not flip-flopped on the issue of divestment in order to gain any real or imagined political advantage,” Cleator said. He said that his “differing views” have resulted from analysis of the arguments for and against apartheid.

The South African government’s “intransigence” on apartheid forced him to “further question my opposition to divestment,” Cleator said. This latest soul-searching also led to his compromise plan, he said.