The general assembly of the Presbyterian Church (U.S.A.) had no sooner voted to divest from companies with Israeli operations than it ran into heated opposition -- and not just from supporters of Israel. Meet Robert Maggs, who happens to be CEO of the church’s board of pensions, which oversees $6.5 billion. On a Web page that he used to press his case beginning around the time of the July vote, Maggs argued that forced divestment would violate the fund’s obligation to “act for the sole and exclusive benefit of plan participants.”
He says his position is not ideological but purely a matter of fiduciary responsibility. “I’m proud to remind everybody what the limits of our discretion are,” asserts Maggs, who was an attorney with Chase Manhattan Bank from 1971 through 1996, then retired for three years before joining the church organization in 1999. But proponents of divestment are paying little heed. “We think that divestment will spur companies to become more pro-active in promoting peace,” says Bill Somplatsky-Jarman, who runs the social responsibility policy committee of the 2.5 million-member denomination. Late last month some Anglican Church leaders said they would support similar divestment policies.
Fearing a snowball effect, Jewish groups and 14 members of the U.S. House of Representatives have demanded that the Presbyterian Church reverse its vote. Maggs, meanwhile, reports that he’s received hate mail; one writer, he says, “cursed me and my offspring for generations to come.” The 60-year-old is taking the controversy in stride -- and it’s far from over. Following procedures in place since the church’s divestment from South Africa in 1984, the general assembly would have to approve a formal proposal in 2006. Then, over the next two or three years, the church would try to change corporations’ behavior through jawboning and shareholder resolutions. If the conflict with Maggs ultimately came to a head, the church could move to oust him by electing a new slate of directors for the pension board. Such a scenario is “highly unlikely,” says Maggs, and not because he’d give in. “I always stand by my legal obligations. Absolutely.”
