Fidelity Trustee Admits “Passing the Buck to Elected Officials” on Genocide Investments, Says IAG

Company also agrees to investigate shareholder complaints about proxy solicitation process

BOSTON--(BUSINESS WIRE)--According to Investors Against Genocide, two more funds recorded votes at today’s Fidelity’s shareholder meeting on a shareholder proposal to avoid investments in companies that help to fund genocide. At the meeting, Independent Trustee Albert Gamper acknowledged that the Fidelity Board of Trustees is “passing the buck to elected officials” to determine if investing in companies that help to fund genocide should be avoided by American mutual fund companies. In explaining the Board’s decision to oppose the proposal, Gamper stated that the issue is “very complex” and “difficult for the Board.”

“we hope that Fidelity will join us in seeking help from our elected officials in resolving this problem for millions of concerned American investors.”

Although federal law prevents most US companies from operating in Sudan, Fidelity and other American financial institutions are major investors in the Chinese, Indian, and Malaysian oil companies involved in Sudan that are helping to fund this genocide, according to Investors Against Genocide (IAG), the Boston-based non-profit organization responsible for the anti-genocide shareholder action at Fidelity and other mutual fund companies. As a result, ordinary investors, through their mutual funds, family savings, and pension plans entrusted to these financial institutions, are inadvertently investing in genocide.

IAG is engaged in an effort to encourage legislation and regulatory changes to address investments in companies that help to fund genocide. “Since the Fidelity Trustees feel that this moral issue is beyond their purview,” said Eric Cohen, Chairperson of Investors Against Genocide, “we hope that Fidelity will join us in seeking help from our elected officials in resolving this problem for millions of concerned American investors.”

Reflecting the broad public support against investing in genocide, both Houses of Congress unanimously passed the Sudan Accountability and Divestment Act (SADA). Signed into law by President Bush on December 31, 2007, SADA provides explicit support for fiduciaries to divest from Sudan.

Recent shareholder complaints that Fidelity’s agent tried to impede voting against Fidelity, in favor of the genocide-free investing proposal, as reported by Reuters on August 13, was also a topic of discussion at the shareholder meeting. Both Trustee Gamper and Fidelity General Counsel Goebel committed to investigate the scope of the problem.

The Fidelity funds recording votes today were Fidelity’s Freedom 2010 Fund at 21.9% FOR the proposal and Freedom 2020 Fund at 23.4%. Results of the voting today were comparable to results on the same proposal at Fidelity last year, when 14 funds recorded votes ranging from 20% to 31% FOR the proposal.

Today’s votes were cast by millions of Fidelity customers on adopting a policy to prevent Fidelity from investing their savings in companies that substantially contribute to genocide or crimes against humanity. By voting “FOR” ballot Question 3, shareholders asked the fund’s Board to “institute procedures to prevent holding investments in companies that, in the judgment of the Board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights. Seven additional funds did not reach quorum on Question 3 and did not record votes.

"Last year, some two million shareholders of record voted FOR the proposal, despite Fidelity’s active opposition,” states Cohen. “Again this year, huge numbers of Fidelity customers voted FOR the proposal,” says Cohen. “Fidelity has insisted on retaining its flexibility to invest in genocide, disregarded the voice of its customers, and, in the process, alienated millions of its customers who rejected its amoral guidance.