A report from the Public Accountability Initiative has connected the University of Michigan to private equity fund Lime Rock Partners, which directly finances billionaire Texas oil-driver Tim Dunn and a far-right political action committee called Empower Texans.
With the growing traction of the fossil fuel divestment movement on campus and greater emphasis on responsible investment, groups within the University of Michigan community feel more empowered to demand responsible investment that aligns with commonly-held values on campus. Simultaneously, University officials have weighed distancing investments from the public eye.
In late September, the Public Accountability Initiative released a report showing that $26 million of the University endowment was invested in private equity fund Lime Rock Partners as of October 2018. The fund finances Dunn and Empower Texans, a conservative group that has a major role in supporting far-right rhetoric and legislation in Texas politics.
Climate activists on campus have rebuked the investment.
Law student Nash Hall, a member of Climate Action Movement, said the University’s financial support of political organizations such as Empower Texans stands against the values of the University and democracy in general.
“It’s important to recognize when you’re talking about electoral politics that the same organizations or the same people who are pouring money into the Empower Texans organization are also affirmatively anti-democracy in their views,” Hall said. “ … Part of that vision is the removal of people’s power, of community power, and the vesting of it in a very select group of very wealthy individuals that make the decisions for most of our society, and it’s in their interest when communities accept that as the status quo, or the way it just is.”
In an email to The Daily, University spokesman Rick Fitzgerald said it is not the University’s policy to comment on its investments.
“It is our normal practice, not to comment on the investment managers we work with or to discuss the university’s strategy of investments,” Fitzgerald wrote.
University President Mark Schlissel told The Daily in an interview last week that political ideology does not play a large role in the endowment.
“In general, the purpose of the endowment is to provide support for an area that we’ve agreed with a donor is an area that the University thinks is important and the donor wants to support,” Schlissel said. “We make a commitment to the donor to be a good steward of their money. So that means trying to generate the right mix of risk and return that sort of yield to the investment so that in perpetuity, we can support the thing that we agreed upon — students scholarships, for example — and have the endowment grow so that its value is not eroded with inflation through the years.”
Divestment from fossil fuels has remained at the forefront of campus discourse. Last year’s Climate Strike resulted in the arrest and subsequent court trials of six students. In December, the Board of Regents voted against a $50 million dollar investment in oil and gas company Vendera Resources amid pressure from CAM and the One University Campaign.
Conversations about divesting from political issues have arisen previously. In 2017, student activists pushed for the University to divest from companies that did business with Israel. The activists received Central Student Government’s support, though the University ultimately did not divest.
Activism for divestment, led by organizations such as CAM, have taken the form of written statements addressed to President Schlissel and events educating on divestment. In January at the Association of Big Ten Students Conference, student governments of each Big Ten school passed a unanimous resolution demanding their respective institutions freeze fossil fuel investments.
However, the investment in question is not only pertinent to climate activists. Subsequent reports showed Michigan’s $26 million and Michigan State University’s $15.6 million investments to Lime Rock Partners owned by private equity firm Lime Rock Partners, which oversees and finances the business operations of CrownQuest, an oil drilling company owned by Tim Dunn. With the money from his oil business, Dunn created and today bankrolls conservative political organization Empower Texans, having given over $7.6 million to the PAC since 2008.
Dunn and Farris Wilks, the co-founders of Empower Texans, have pushed for conservative and evangelical causes, such as anti-transgender bathroom legislation, opposition to marriage equality, blocking safe information on abortion clinics and supporting efforts to disenfranchise naturalized citizens under the guise of protecting against voter fraud. They have donated $250,000 to the Trump administration in 2019.
LSA junior Isabel Hedin-Urrutia, executive board member of LGBT Michigan, said this investment does not surprise her, given that the University has made space for conservative speakers such as Ben Shapiro, who, according to Hedin-Urrutia, incite dangerous rhetoric. She emphasized the ideological differences between the University administration and the campus community.
“I’ve done a lot of research, and this University has a very rich history on queer activism, but a lot of the progressive activism has not come necessarily from the University itself, but it’s come from either its student body, or it’s come from faculty that have come from the outside that have somehow become involved with the University,” Hedin-Urrutia said. “I wish I could say I’m surprised, but I’m not, because money, above all else, seems to be a primary concern for a lot of people who involve themselves in politics.”
As someone who works to pay for her out-of-state tuition, Hedin-Urrutia said she sees this investment — and the platform for conservative speakers — as an insult to the work she has put in to attend the University and create a welcoming, accessible environment. In Hedin-Urrutia’s view, endowment money should be spent on supporting students, such as by helping to solve the Ann Arbor housing crisis or provide a better University healthcare system.
“They were literally thinking about cutting STD testing, which none of us have forgotten. It’s just insane because they said it would cost too much, but this is $26 million going to what exactly, oil drilling and far-right politics?” Hedin-Urrutia said.
LSA junior Solomon Medintz, CAM member, said there is a need for a sustained effort to incorporate greater student and faculty input on the endowment investments. He criticized the way the investment was approved.
“This decision making is entirely composed of the nine people that make up the Regents, the president and the chief financial officer,” Medintz said. “That’s not the way a public institution should be run, and we should be incorporating more stakeholders.”
Rackham student Sasha Bishop, CAM member, explained a key goal of CAM is to promote transparency of University investments. Bishop added that while the University has to make money, bringing in revenue and investing responsibly are not mutually exclusive, especially when investments — like this one — can have political and social impacts.
“More and more people are questioning the bottom-line motivation of profit, especially when a lot of the other arguments you hear from the students is that profit isn’t actually going to directly benefit students and community members,” Bishop said. “When we see brand new buildings being built so that someone very wealthy can slap their name on it and get that honor, but low-income students aren’t being supported, and people can’t afford to live in the town — so basic needs aren’t being met — educators, instructors and students aren’t being prioritized, that motivation of profit dissolves in a lot of ways.”
Similarly, Medintz noted CAM’s work aims to promote transparency, but they need cooperation from the University administration. He said finding information about the University’s finances should not be as difficult as it is so the public can hold the institution accountable.
“It takes a lot of research from specific people to find this information, and we’re grateful that they’re doing that, but what we’re asking for is to make it a little bit easier so that the amount of labor it takes to get this information and to try to do the work to actually have our institution support our communities,” Medintz said. “People can do that.”
Reporter Katherina Sourine can be reached at ksourine@umich.edu