RICHMOND, Va. (WRIC) — Republican Gov. Glenn Youngkin’s administration sent a letter to leaders of Virginia’s public universities, urging them to ensure their investments are free from “social, political or ideological interests.”
Virginia Secretary of Education Amy R. Giddera and Treasury Secretary Steven E. Cummings sent the letter, which was obtained by 8News. First reported by Cardinal News — Presented to the State Presidents’ Council on July 9th.
Ghidella and Cummings pointed to recent efforts by pro-Palestinian protesters on college campuses to call for schools to divest from assets with ties to Israel. Protesters of Israel’s continuing war in the Gaza Strip following the Oct. 7 Hamas attack have called for similar reforms at Virginia universities and others across the country.
this is, Main demands of student protesters Protests were held on campus at Virginia Commonwealth University. sparked clashes between police and protestersthe use of chemical irritants, and forced arrests.
“At a time when universities across the country are being forced to divest without financial evaluations of investments tied to political objectives, we want to ensure your commitment to investing in a manner that prioritizes risk-adjusted investment returns, regardless of social, political, or ideological interests,” they wrote.
Some schools In consideration of such efforts, an agreement was reached with the student protesters.But Virginia’s public universities have not done so, and experts say such efforts would be difficult and would not produce the results protesters are seeking.
Virginia’s public higher education institutions Have assets – through donations and assets – and through our Foundation, we raise funds to achieve our goals.
In the letter, the secretaries urged college presidents to work together to ensure that “our institutions, endowments, and foundations invest their assets in a rational and objective manner that is in the best interests of the federal government, your institutions, your students, and the beneficiaries of your investment funds.”
Ghidella and Cummings also asked council members to review the investment policies of the Virginia State Retirement System, which manages state employee funds.
In their letter, the secretaries of education and the treasury praised the VRS policy as an “excellent and approximate example” of the “prudent investor rule,” which requires trustees to make decisions in the best interests of the trust’s beneficiaries and to invest in the same way that a “prudent and prudent person” would invest his or her own assets.
“This will protect beneficiaries’ investment income and ensure that investment decisions are made solely on financial factors and not influenced by political activism,” the letter said.
Under Virginia law and the Constitution, the letter says, VRS must follow the Prudent Investor rule, analyze economic factors and assess risks to fulfill its fiduciary responsibilities to “more than 820,000 state employee members, retirees and beneficiaries.”
“This does not include screening investments through a ‘social screen’ and does not take into account information such as social, environmental, political or climate factors that are not directly relevant to aligning investments with the objectives of the VRS Trust Fund and its beneficiaries,” the letter said.
The letter, written by the commissioners, is a follow-up to discussions held in March between Youngkin and the council, and outlines the administration’s concerns about the divestment order.
The commissioners wrote that they were concerned that such a mandate would be “extremely difficult to implement” and could result in relative losses, leading to increased fees and lost investment opportunities.
Ghidella and Cummings asked university leaders to report to campus officials by Aug. 15 whether their universities, their foundations, endowments and outside investment managers “have the authority or flexibility to consider investment decisions” based on non-financial factors.
“If so, please explain with specific details and examples how non-monetary factors are considered in making investment decisions and indicate any investment policies that permit such behavior,” the letter reads. “Further, please indicate how your investment policies differ from VRS’s investment policies. We also wish to understand how proxy votes are determined and whether your company follows a voting methodology consistent with your board of directors, and if not, why not.”
8News reached out to Governor Youngkin’s office for more information about the governor’s efforts. Governor Youngkin’s press secretary, Christian Martinez, released a statement that said in part:
“As higher education institutions in Virginia and across the nation face pressure to change their investment practices based on political, social or ideological agendas, the Governor has called on public universities to scrutinize their endowment and foundation investment practices, increase transparency and apply widely accepted investment principles currently used by other state agencies.”
