Friends,
On May 11, 2020, five Concerned Catholic Activists sent a
letter to Archbishop William E. Lori setting out reasons -- theological, moral,
political, environmental, and practical -- for divesting Archdiocesan funds
from weapons manufacturers. On June 19, 20, and 21, some members of the group
fasted and witnessed in front of the Basilica on Cathedral Street in Baltimore,
calling for divestment. This call echoed Pope Francis' "Journeying Towards
Care for Our Common Home," issued June 18, 2020, which informed Catholics
to "shun companies that are harmful to human or social ecology," such
as weapons manufacturers.
On June 23, Archbishop Lori responded. It seems he
took the original letter very seriously, and took time to investigate our
concerns and to formulate his response. Through this campaign, we have
discovered that “For example, certain funds mentioned in your letter have been
fully divested: Blackrock Equity Dividend Fund was fully liquidated in 2015 and
Dodge & Cox International Fund was liquidated in 2016.”
I believe the original letter and the subsequent fast and
witness successfully challenged the Archdiocese of Baltimore to conform to
socially responsible investing. Note the Archdiocese
of Baltimore was the first diocese established in the United States, in
1789.
We asked for a conversation on divestment,
and we succeeded in this quest. In fact, Archbishop Lori suggested contacting the chief financial
officer. The group is still processing this response, but will presumably have
dialogue with him in order to follow further divestment of funds involved with
weapons manufacturers. I hope this action places some wind in the sails
of the divestment movement.
Kagiso, Max
ARCHDIOCESE OF BALTIMORE
320 CATHEDRAL STREET • BALTIMORE, MARYLAND 21201 • 410-547-5437
• FAX: 410-547-8234
OFFICE OF THE ARCHBISHOP
Mr. Jeff Ross, et al. 515 Collins A venue Baltimore,
Maryland 21229
June 23, 2020
Dear Jeff, Gary, Suzanne, Max, and Janice,
Thank you for your recent letter and for your
observations and questions about Archdiocesan investments. This response has
taken longer than anticipated. Assisting parishes, schools, other Catholic
institutions, and the Archdiocese itself, to respond to the financial
challenges of these days has been time consuming, especially for my colleagues
in the fiscal office whom I consulted in answering your questions. Please keep
these good, hard-working people in your prayers.
With the goal of fiscal accountability in focus, you have
looked into the question of Archdiocesan compliance with the standards of
socially responsible investing (SRI). 1bank you for your analysis. In the
following paragraphs, I shall try, as best I can, to clarify the issues you
have raised.
As your letter indicates, the United States
Conference of Catholic Bishops (USCCB) issued guidance on SRI. Published in
2003, it comprises four broad areas: 1) Protecting Human Life; 2) Promoting
Human Dignity; 3) Reducing Arms Production; 4) Pursuing Economic Justice. Soon
after the publication of this guidance, the Archdiocese undertook to revise its
investment practices. To this day, we continue to make changes and
improvements. Currently, the USCCB is updating its guidance. Once issued, we
will again conduct another thorough review of investments. In any event, I
regard all four pillars of SRI as a very serious matter and it is something in
which I firmly believe. Thus, I agree with your stance that we cannot
simultaneously entrust ourselves to God while seeking financial security
through investments in the manufacture of death-dealing products.
Your letter specifically asks whether we
have ever determined the extent to ~which we have invested any archdiocesan,
parish, or school funds in the weapons industry. We have indeed made that
determination. Over time, we have been alert, not only to investments in the
weapons industry, but also to investments in companies and
Mr. Jeff Ross, et al. June 23, 2020 Page2
industries that do not align with the four broad areas of
SRI. However, not all investments in the Archdiocese are under the direct
control of the Archdiocese, as John Matera, the Chief Financial Officer of the
Archdiocese explains in the summary that follows:
The first thing to understand is that there
are two distinct investment policies. Investments that are under the direct
control and fiduciary responsibility of the Archbishop of Baltimore and
Investments that are not under direct control of the Archbishop.
The investments under direct control of the Archbishop
are included in the audited statements entitled Combined Financial Statements
of Central Services of the Roman Catholic Archbishop of Baltimore (https://www.archbalt.org/wp-content/uploads/2020/01/2019-Central-Services-of-RCAofBaitimore-FS-FinaI.pd).
These investments are in large separate trusts such as Lay Pension Plan, Priest
Pension Plan, General Insurance Fund, Health Insurance Fund, etc. The
Archdiocese does not hold any individual securities. All investments are in
funds. Because these trusts are under common control of the Archbishop, we have
the ability to open our own funds with asset managers. This affords the
Investment Committee to select what they believe are the best asset managers in
their respective asset classes. As a condition to investment, asset managers
must adhere to social screening consistent with Catholic values as outlined by
the USCCB. Every quarter, the investment asset managers send a letter to
the Archdiocese certifying that they do not own any companies that earn revenue
on activity contrary to our values. They identify each company that is included
in the normal mutual fund but not included in our funds, as well as if any
replacement company was purchased or not. This practice has been in place since
2012. The process works well and we are 100% compliant with the USCCB guidance.
The investments not under direct control of the
Archbishop are a little more difficult to manage by way of compliance. Each
individual parish is a separate corporation. Fiduciary responsibility lies with
the parish leadership of the corporation. Rarely does a parish have enough
savings that would allow it to invest in mutual funds in the manner that the
Archdiocese does. An investment fund manager has minimums before he/ she will
manage a separate fund outside of the larger mutual fund. To address some of
these, the Archdiocese has implemented parish/ school investment policies.
Mr. Jeff Ross, et al. June 23, 2020 Page3
To be clear, the investments under the direct control of
the Archdiocese are completely compliant with the USCCB guidelines.
As noted above, however, some investments are only indirectly
under Archdiocesan control. It may be helpful for me to explain further how
this complex structure developed and how it In the course of doing just that, I
shall also address your concerns about specific investments.
Parishes and schools with ample savings, for the most
part, handle their own investments. Working with parish finance councils and
business managers, the Archdiocese strongly encourages such parishes and
schools to invest in ways that are SRI compliant. Most parishes and schools, however,
do not have the financial bandwidth to make investments on their own and to pay
brokerage fees. To assist such parishes and schools, in 2000 (prior to the
USCCB SRI Guidelines), the Archdiocese of Baltimore created the Inter-Parish
Loan Fund (IPLF). The idea was to pool parish and school investments into
combined funds in order to have access to more markets at lower fees. This
program currently includes 52 parishes and/ or schools. As a result, there are
52 different decision makers within the program. Therefore, making changes in
this program is somewhat more challenging. However, the IPLF Board is committed
to offering only SRI options within the program, while continuing to have a
broad range of asset categories from which parishes and schools can choose to
create their own portfolios. Currently, a majority of those investments is SRI;
the IPLF Board seeks to transition out of the remaining funds that are not
fully compliant. For example, certain funds mentioned in your letter have been
fully divested: Blackrock Equity Dividend Fund was fully liquidated in 2015 and
Dodge & Cox International Fund was liquidated in 2016. IPLF is audited
yearly and their audited financial statements may be found at: http://www.archbalt.org/wp-content/uploads/2020/01/2019-18-Inter-Parish-Loan-Fund-.FS.pdf.
Let me thank you once again for your letter. I hope the
information provided in the letter is helpful. If you have further questions, I
would encourage you to contact directly Mr. John Matera, Chief Financial
Officer . . .
Asking God's abundant blessings upon you and your loved
ones and requesting a remembrance in your prayers, I remain
Faithfully in Christ,
Most Reverend William E. Lori
Donations can be sent
to Max Obuszewski, Baltimore Nonviolence Center, 431 Notre Dame Lane, Apt. 206,
Baltimore, MD 21212. Ph: 410-323-1607; Email: mobuszewski2001 [at]
comcast.net. Go to http://baltimorenonviolencecenter.blogspot.com/
"The master class
has always declared the wars; the subject class has always fought the battles.
The master class has had all to gain and nothing to lose, while the subject
class has had nothing to gain and everything to lose--especially their
lives." Eugene Victor Debs
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