Cohen, Hayes and Kalkstein must recuse themselves

In response to President Valerie Smith and Chair of the Board Tom Spock

Last week, President Valerie Smith and Chair of the Board of Managers Tom Spock responded to Mountain Justice’s call for members of the Board of Managers with financial stakes in the fossil fuel industry to recuse themselves from further votes on divestment. Spock and Smith’s response failed to address the conflicts of interest of board members Samuel Hayes III, Rhonda Cohen, and Harold Kalkstein, who have a collective $3.6 billion invested in the fossil fuel industry through their respective financial institutions and lobbying firms. In the wake of NASA’s announcement that February 2016 global temperatures exceeded pre-industrial levels by 1.5 degrees Celsius for the first time, global warming has never posed a more real and urgent threat. We cannot let the personal financial interests of board members continue to block meaningful action on the most important global issue of our generation.

While the Board’s recent carbon charge initiative is a positive effort to reduce our emissions here on campus, it does not address the urgency of our global predicament and cannot serve as a replacement for divestment. In a political system in which Exxon and its peers fund climate denial and the U.S. government subsidizes the industry, demand reduction alone does not address the immense economic and political power of the fossil fuel industry. Spock and President Smith’s assertion that limiting carbon demand is our only hope fails to acknowledge the urgency needed in combating the crimes wrought by the fossil fuel industry—400,000 deaths each year. The impacts fall hardest on frontline communities, citizens of the Global South, women, and people of color.

Today, we are already seeing a rise in ocean levels that threatens to disappear some small island nations. If the fossil fuel industry is allowed to continue reaping profits through its rogue practices, Ethiopian, Somali, and Kenyan farmers will lose much of the rainfall they depend on to feed their nations. Flooding will decimate rice production in the Mekong Delta and Bangladesh, and the U.S. midwest will be left drier than it was during the dust bowl.  Miami, Shanghai, Venice, Boston, Amsterdam, Dhaka, New Orleans and many other major cities will be submerged. Ocean acidification will stress food security globally, violent conflicts such as the current civil war in Syria will become more frequent due to resource scarcity, and tens of millions of climate refugees across the world will be forced to relocate to survive. At this point, we must fight the battle against climate catastrophe on every front. By maintaining investments in fossil fuel companies the Board is abdicating its responsibility to our society.

By continuing to invest in the fossil fuel industry, Swarthmore is betting that we will not be able to uphold the goal enshrined in the Paris Climate Agreement of keeping warming under 2 degrees Celsius above pre-industrial levels. This target is only possible if the world keeps approximately 84 percent of carbon reserves in the ground, which would cause fossil fuel stocks to collapse. Swarthmore can divest now—before its reputation as a socially responsible institution suffers too much damage—or continue to bank on the failure of international climate agreements and the destruction of our futures.

Time and time again, the Board has insinuated that divestment would compromise financial aid, and time and time again their arguments have been proven wrong. The Board asserted that restricting the universe of investments would decrease the risk adjusted return for our endowment, until MSCI and NorthStar thoroughly debunked that myth. The Board then argued that our active fund managers wouldn’t be willing to divest Swarthmore’s endowment. Until Don Gould, chair of Pitzer’s Investments Committee and president of Gould Asset Management, reminded us that they could and Swarthmore’s highest-paid advisor Cambridge Associates offered to help us manage fossil free funds. Furthermore, other members of the Board expressed this September that the Board believed “divestment would incur little to no cost to the endowment”.

Morgan Stanley found in a recent analysis that “investing in sustainability has usually met, and often exceeded, the performance of comparable traditional investments.” They went on to endorse divestment, posing the question “What can investors do to align their portfolios with sustainable businesses? The simplest way—pioneered by American universities in the apartheid era—would be divestment: avoid investing in the least sustainable companies that are contributing to climate change and the economic damage that comes with it.”

Mainstream financial institutions, from HSBC to the Bank of England, have publicly warned of the financial risk of continuing to invest in the fossil fuel industry. Crude oil prices have dropped 70 percent since 2014. The Dow U.S. Jones Coal Index has lost 94 percent of its value since it last peaked in 2011. As students grow more reliant on financial aid, it is insulting that the Board would threaten to cut financial aid when so many economists and financial institutions maintain that divesting from fossil fuels is a financially prudent option. The Board has repeatedly used financial aid as a scare tactic to abdicate their responsibility to those whose lives are threatened by climate change on a day-to-day basis.

The response from President Smith and Board Chair Tom Spock demonstrates that although the Board has repeatedly insisted over the last five years of our campaign that they will no longer engage in dialogue, the conversation on divestment is not over. Yet, their response fails to address a very real concern in the divestment conversation—conflicts of interest on the part of Board members Sam Hayes, Harold Kalkstein, and Rhonda Cohen. Investments committee member Harold Kalkstein founded an energy practice that recently recommended Arctic drilling and repealing the ban on crude oil exports; vice chair Rhonda Cohen manages a trust with nearly $1 billion in fossil fuel assets; and board member Emeritus Samuel Hayes II served 20 years on the boards of the Eaton Vance family of mutual funds, whose second-largest holding is its $845 million dollar stake in ExxonMobil. Yet despite their egregious conflicts of interest, these managers are allowed to vote on fossil fuel divestment, one of the most urgent issues of our generation in a clear violation of the Board’s conflict of interest policy.

These are not “spurious ad hominem attacks,” they are concrete monetary facts. They are substantive and clear conflicts of interest that render previous votes on divestment biased. We cannot sit idly by as conflicts of interest on the part of several Board members compromise our Board’s decisionmaking on an issue that leaves us truly without a moment to lose. We demand that Harold Kalkstein, Rhonda Cohen, and Sam Hayes recuse themselves from all future votes on divestment.

Please sign this pledge ( if you would like to take further escalated action for divestment at the beginning of April.

Note: This op-ed was written by Sophia Zaia and Lewis Fitzgerald-Holland on behalf of Swarthmore Mountain Justice.

Information on Board members’ connections to the fossil fuel industry was compiled by Little Sis, a research tool run by the Public Accountability Initiative, a “non-profit, public interest research organization investigating power.”

1 Comment

  1. Works Referenced

    Conflict of interest:

    Feb + 1.5 deg C:

    Rainfall in Ethiopia, Somalia, and Kenya:

    Sea rise in Mekong delta:
    Sea rise in Bengledesh:

    U.S. “dust-bowlification”:

    Sea rise extent:

    Ocean acidification and food security:

    Food security and conflict in Syria:

    Climate refugees:
    84% carbon budget:



    Don Gould:


    “Little to no cost”:

    Morgan Stanley:


    Bank of England:

    Crude oil prices:
    Dow Jones coal index:

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