Fidelity, Gore Urged to Help Block Colombian Occidental Venture | Amazon Watch
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Fidelity, Gore Urged to Help Block Colombian Occidental Venture

February 2, 2000 | Bloomberg

19:6 (New York) Fidelity, Gore Urged to Help Block Colombian Occidental Venture

Washington – Environmental activists are urging Fidelity Investments and U.S. Vice President Al Gore either to divest their holdings in Occidental Petroleum Corp. or use their influence to persuade the company to withdraw from a controversial venture in Colombia.

Rainforest Action Network and Amazon Watch, two non-profit environmental groups, are targeting Fidelity, the world’s biggest mutual fund company, and presidential candidate Gore as part of an effort to stop Occidental’s drive to drill oil in a region they say belongs to the U’wa Indian tribe.

Fidelity is the second-largest holder of Occidental shares and Gore – who has billed himself an environmentalist – is executor of an estate that holds as much as $500,000 worth of stock in the company.

Members of the U’wa, a tribe that opposes exploration on its ancestral lands, have threatened to commit mass suicide if the project isn’t stopped. News reports in Colombia say the military began to evict the U’wa from their lands last week.

“I do not want my money supporting something like this,” said Kathy Kerridge, an attorney and housewife who owns $47,000 worth of shares in five Fidelity funds. While she hasn’t sold her investments yet, she said, “if I don’t see some kind of action I will sell my shares and transfer them to another fund and move them out of Fidelity.”

Investors’ Pressure

Kerridge is among the two dozen owners of Fidelity funds who have urged the company to pressure Occidental into withdrawing from the U’wa tribe’s land. One investor has sold off about $300,000 worth of Fidelity mutual funds to protest the company’s actions in Colombia, according to Rainforest Action Network.

Tomorrow, activists will hold 22 demonstrations outside Fidelity offices in the U.S. and nine protests outside Colombian embassies and Fidelity offices in other countries. Outside the company’s headquarters in Boston, at least one investor will publicly divest her $21,000 worth of Fidelity funds to protest the company’s 8.25 percent stake in Occidental, said Steve Kretzmann, a consultant to Amazon Watch’s U’wa campaign.

“We generally don’t comment on customer relationships,” said Vin Loporchio, a Fidelity spokesman.

The campaign is one of the first to expand investor activism – by which investors try to force votes on such issues through proxy votes during annual shareholder meetings – to the realm of mutual funds. The activists took aim at Fidelity because it has consistently ranked among the top three owners of Occidental stock and is a “leader in its field,” said Shannon Wright, director of Rainforest Action Network’s “beyond oil” campaign.

“You’re definitely going to see a lot more of this because more people are investing in mutual funds and the people responsible for deciding on proxies are increasingly mutual fund managers,” said Simon Billenness, a senior analyst with the “socially responsible” investment firm Trillium Asset Management Corp., which manages more than $600 million. “And they are going to be increasingly lobbied by people like Kathy Kerridge.”

Gore’s Connections

Gore is under fire because of his close connections with Occidental.

The vice president’s personal financial disclosure, filed with the U.S. Office of Government Ethics, shows him as executor of his late father’s estate, which holds $250,000 to $500,000 worth of Occidental stock.

The Center for Public Integrity, a non-profit research group in Washington, reports that Al Gore Sr., the vice president’s father, earned $500,000 a year working for Occidental after he retired from the Senate. In the past, the younger Gore has flown aboard the company’s private jet and solicited hundreds of thousands of dollars in contributions for the Democratic party from Occidental.

Laura Quinn, a spokeswoman for the vice president, said his mother, Pauline Gore, is sole beneficiary of the late Al Gore Sr.’s estate. “As far as I’m aware, the campaign has not spoken on this issue,” Quinn said.

Occidental Chairman and Chief Executive Ray Irani “has access to Al Gore and to that extent Gore has access to him,” said Peter Eisner, managing director of the Center for Public Integrity. “It’s an interesting tactic and could bear fruit if Gore chooses to do it. I know he can pick up the phone and call the chairman straight away. Will he do it? I have no idea.”

Political Interests

The activists say it’s in the political interest of Gore – author of a popular book on the environment – to heed their call. “He does not want in a presidential year to be connected to one of the world’s worst environmental and human rights disasters,” Kretzmann said.

Rainforest Action Network and other groups have also been in touch with other major Occidental investors, like Vanguard Group, the company’s third-largest shareholder after Fidelity and Sanford Bernstein.

“We understand and respect their concerns,” said Vanguard Group spokesman John Demming. “We’ve asked our managers and analysts to look into the situation.”

Occidental declined to comment.

Fidelity, which so far has declined to meet with the protesters, indicated it’s not in a position to respond to their demands.

“Our portfolio managers have a responsibility to invest in companies that appear to have the highest likelihood of stock appreciation,” Loporchio said.

“They are not trained to make investment decisions to fulfill social or political objectives.”

– Emily Schwartz in Washington (202) 624-1927 with reporting in Boston by Kathie O’Donnell /pjh Story illustration: To chart Colombian oil production, type PIWACOLO GP

Story illustration: To chart Colombian oil production, type PIWACOLO GP

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