Thursday, Feb. 1, 2001 | 11:30 a.m.
Nevada's higher education system has invested millions in an industry that wants to ship nuclear waste to the state.
At least $3.6 million of higher education endowment money is invested in companies that own nuclear power plants, according to investment information supplied by Cambridge Associates, a Boston-based investment consulting group.
"I'm not a believer in nuclear energy and would rather see the money invested in other things, but sometimes that is not so easy to do," Sen. Harry Reid, D-Nev., said.
Reid is leading the charge against the federal government's proposal to make Yucca Mountain, 90 miles northwest of Las Vegas, the nation's nuclear waste repository.
Politicians from Las Vegas Mayor Oscar Goodman to Gov. Kenny Guinn also have chimed in on the issue, publicly opposing the plan to store 77,000 tons of radioactive waste in the state. The Las Vegas Chamber of Commerce also joined the fight Wednesday against the Yucca Mountain project, which is seen as having a devastating effect on the Las Vegas Valley's economic future.
In addition to the nuclear power industry, the university system also holds more than $860,000 in tobacco stock.
The investment comes after the state attorney general joined a suit of the tobacco industry in 1997, receiving $48 million a year in reparations for cancer patients. A portion of the tobacco money is used to fund the Millennium Scholarship Program, which is currently providing an education to 4,000 Nevada college students.
"It's troubling that they are accepting money from the tobacco master settlement agreement and then recycling the money back into the same industry," said Doug Cogan, a director at the Investor Responsibility Research Center, a nonprofit research group funded by university and pension funds.
Reaction from regents about the potential conflict of interest was varied.
"I'm surprised," said Regent Steve Sisolak, who sits on the board's Investment Committee. "That's a real concern. Tobacco is one thing, but nuclear power is another. I definitely think this is something that we need to address at the next committee meeting."
The largest investments went to General Electric Co., DTE Energy, FirstEnergy Corp. and XCEL Energy. All of those companies deal in nuclear energy, according to Calvert Group a watchdog investment group based in Bethesda, Md.
Most if not all of the regents are unaware which stocks are in UCCN's portfolio, said Dan Miles, vice chancellor of finance.
"We have money invested in tobacco?" asked Regent Howard Rosenberg. "That's not such a hot idea."
Within the last year, four comparable state universities have divested themselves from tobacco stocks, Cogan said.
Institutions in Washington, Michigan and Wisconsin along with top universities such as Harvard in Massachusetts and Stanford in California have all dumped tobacco stocks from their portfolios.
University California Board of Regents recently ditched plans to purchase $55 million in tobacco stocks, because the investment would be in conflict with their cancer research efforts.
Other schools affiliated with the Quaker religion have divested themselves of weapons manufacturing.
The issue of divesting from so-called "sin stocks" such as tobacco, alcohol, firearms and nuclear energy has never been broached by Nevada's Board of Regents.
"We obviously don't look at what they are investing in," said Regent Mark Alden, the chair of the Investment Committee. "Unless the board wants to get into public policy and specifically look at where they are investing, I'm not going to start to micro-manage."
Alden said that his responsibility is to ensure that the two pools of money that the regents oversee (the endowment pool and operating pool), make good investment returns. The worry is that if regents divest from politically incorrect stocks, he said, they may not get as good of a return on their money.
Robert Miller, dean of the School of Medicine says the argument to sell off such stocks is a difficult one to make.
"One has to be careful when looking at investing for social good. It can become somewhat of a slippery slope," Miller said. "I certainly wouldn't have any argument as a physician to not support tobacco companies. But on the other hand, someone might have a beef about anyone who invests money in testing on animals. So where do you draw the line?"
Institutions of higher learning are increasingly utilizing what's known of as "social screens" or social investing.
Companies like Brown Capital have clients that specifically request that their portfolios have that feature.
"We have found that a socially screened investment isn't in any way a disadvantage to investors," said Tedd Alexander, a portfolio manager and analyst for the Baltimore-based company. "Investors are becoming more aware of the fact that they can be both profitable and socially aware."
The university system has other funds that invest in the stock market. Those funds also use the top 500 companies on Standard & Poor's Register of Corporations, which include energy, tobacco and other such stocks.
The potential conflict of investing state money in such industries could be even be more widespread in state government than just the higher education system. There also are investment pools of money in stock portfolios at the city, county and state level.
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