Treasurer Spells out Process for Wells Fargo Demands
The trustees’ investment committee will discuss student demands to divest from Wells Fargo in November.
Reed’s Vice President and Treasurer Lorraine Arvin spelled out the process the college will follow in considering student demands that Reed divest from its operating bank, Wells Fargo.
Reed’s connection to Wells Fargo has been at the center of student activism this year. Protesters associated with Reedies Against Racism have held rallies, disrupted humanities lectures, led marches through campus, occupied offices, slept in hallways, and put up posters denouncing the bank for its ties to private prison companies and the Dakota Access Pipeline.
Arvin met with activists on October 2 and confirmed on October 9 that the investment committee of the board of trustees will discuss RAR’s demands at its next scheduled meeting in November.
Key to the discussion is the college’s Investment Responsibility Policy, which provides guidance to the board of trustees on considering non-economic issues in addition to its duty to maintain financially prudent investment objectives.
Wells Fargo is Reed’s operating bank, and processes routine transactions, from tuition payments to paperclip disbursements, totalling roughly $200 million per year. It also maintains a standby letter of credit supporting bonds issued in 2008. These accounts are separate from Reed’s $555 million endowment.
Wells Fargo has denied holding direct shares in the two private prison corporations that have been the target of student activists at Reed, but acknowledges financing the Dakota Access Pipeline.
Wells Fargo's Response to Reed's Inquiry on Investments
“The fact is that Wells Fargo holds no shares of either The GEO Group or CoreCivic (formerly Corrections Corporation of America,” wrote Charu Gorrepati, a senior vice president at Wells Fargo, in a letter to Lorraine Arvin, Reed’s vice president and treasurer. “We have no seat on either company’s board of directors, and we do not dictate their policies or business models.”
Gorrepati acknowledges that some Wells Fargo Funds—which are managed but not owned by the bank—hold a “very small position” in those companies in a passive index fund. Index funds are designed to mimic broader market indices such as the Dow Jones Industrial Average or the S&P 500, and typically hold investments in the same companies as the index.
Wells Fargo is Reed’s operating bank, and processes routine transactions, from tuition payments to payroll disbursements, totalling roughly $200 million per year. It also maintains a standby letter of credit supporting bonds issued in 2008. These accounts are separate from Reed’s $555 million endowment.
Wells Fargo was one of 17 banks that financed construction of the Dakota Access Pipeline and provided a credit line of $120 million to the project, according to the bank’s website. This represents roughly 5% of the $2.5 billion that was lent to the project. The pipeline started operations in June.
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