Tax records and financial documents show that Wheaton has benefited from, or directly invested in, companies relating to timber, oil, factory farming, the Keystone Pipeline, pharmaceuticals, minerals and many other things. These financial practices, while not unusual for a college, have left Wheaton students wondering if the Trustees, donors and administration are upholding the campus values.
The Wheaton financial statements from 2016-2017 show that Wheaton invested nearly $2.5 million in timber, which may contribute to deforestation.
Additionally, according to the 2016 tax returns of the Isabella M. Wardwell Foundation, a private foundation set up to benefit the college, the college has benefitted from bonds that are tied to many companies.
Such companies include the following: Tyson Foods, a factory farming company which has often been accused of having extremely low standards for animal welfare; TransCanada, the company that owns the Keystone Pipeline, which caused huge controversy as Native Americans and Indigenous Canadians worried about and protested the pollution, destruction to sacred sites and water contamination that it would cause on their lands; and Pharma, a pharmaceutical drug company often accused of extremely corrupt practices and of corroding parts of the U.S. healthcare system.
“Let’s not restrict how the endowment gets invested…We make investments on campus that have even more value.”
Some parts of the bond are also tied directly to broad investments in actual nations such as Uruguay and Panama. In some cases, the bonds show investments in mineral companies such as the Southern Peru Copper Company. The Southern Peru Copper Company has been protested due to its toxic mining practices and fear that its projects will cause water contamination and hurt agriculture.
Other investments are made in many oil companies, some of which have even been accused of bribing and taken to court over corruption in recent years, such as Pemex. Timber companies are within the bonds as well.
The bonds are also investments with firearm exposure, meaning that the bonds financially do better when firearms and guns do better.
“Wheaton has $34.6 million in offshore investments in Central America and the Caribbean…While there are tax advantages for Wheaton to have offshore accounts, it may also be a way for small private colleges like Wheaton to hide its investments from students”
Executive Vice President for Finance and Administration Brian Douglas explained that the Board of Trustees, which often donates and decides on what to invest the college’s endowment on, really has all the control. It often does not restrict its investments so that it can instead use the money to benefit the “mission of the college.
“Most [colleges] take the position we are, which is maximize the return and put the money where it really matters,” Douglas said. “[We] make investments on the campus that have even more value.”
Douglas said there have been rare cases where the Board of Trustees would not invest in certain companies, such as those in South Africa due to apartheid or those with ties to Sudan due to the ethnic violence and atrocities happening there.
“Aside from those examples, our board has not really said ‘no, we are not going to invest,’” Douglas stated.
“What we are trying to do is generate revenue to support the students”
Wheaton is similar to most colleges in this regard, as Douglas pointed out in saying that most colleges take the philosophical stance that Wheaton does when it comes to finances to “generate the best return.”
“Wheaton is hardly unusual in this regard,” Douglas said. “Most colleges say: let’s not restrict how the endowment gets invested, let’s restrict how the resources get used.”
Douglas said that while Wheaton may invest in ecologically harmful fossil fuels and timber, it can use those investments to have an impact on campus. One such example of this is the plans to make the new ecological residential building next year that will meet “passive house standards,” which is an extremely rigorous energy-efficiency standard.
Meanwhile, some students feel that this kind of investing is counter to the mission of Wheaton on a broader scale. “[Wheaton] makes a big deal about equality, inclusion and diversity, but clearly right now [its] operation depends on these injustices in the larger world,” Caleigh Grogan ’18 said. “Action needs to be taken.”
Douglas said that Wheaton cannot control investments within donations or gifts given from Trustees or foundations. “The college receives literally thousands of gifts a year,” commented Douglas. “The donations themselves could be the result of decades of investment by the donor. It is really not feasible to assess how the donor developed [their] wealth and from an industry standpoint is not really seen as appropriate.”
Some students believe that the student body should know what kind of investments the college is benefitting from. “I believe students should definitely be aware of where Wheaton receives funding since students are the foundation of any school,” Tessa Demko ’20 said.
According to tax records from 2015, Wheaton has over $34.6 million in offshore investments in Central America and the Caribbean. Douglas confirmed that these funds may be in the Cayman Islands or Bermuda due to tax advantages. While there are tax advantages for Wheaton to have offshore accounts, it may also be a way for a small private college like Wheaton to hide its investments from students.
This technique is outlined directly in a New York Times article entitled “Endowments Boom as Colleges Bury Earnings Overseas,” written in November 2017 by Stephanie Saul.
Saul writes: “A trove of millions of leaked documents from a Bermuda-based law firm, Appleby, reflects some of the tax wizardry used by American colleges and universities. Schools have increasingly turned to secretive offshore investments, the files show, which let them swell their endowments with blocker corporations, and avoid scrutiny of ventures involving fossil fuels or other issues that could set off campus controversy.”
Douglas said that he wants students to understand that Trustees do reflect on being socially conscious.
“I think students understand that what we are trying to do is generate revenue to support the students,” Douglas said.
“Most of our donors want us to continue with the strategy that we have.”
“We talk a lot about being socially responsible as an organization; the [Trustee] Board has an interest in that,” added Douglas. “At our last meeting, for instance, we spent a fair amount of tim[e] discussing the implications of climate change. However, the Trustees’ position has been that the purpose of the endowment is to generate the maximum possible return in support of our educational mission.”
Douglas also said that, as currently constituted, there have been no plans to change the investment approach. “Most of our donors want us to continue with the strategy that we have. We want to honor that and I think the Trustees feel the same way.”