Will ACLU Shake Its Money Maker? 

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Far be it from the Current to thumb any tender spots in the reputation of arguably the nation’s most visible and tireless legal team, the American Civil Liberties Union. After all, if it weren’t for their unmatched record in the highest court in the land, the Current would never have learned that its ancestors were a lower order of animals (the ACLU’s 1925 John Scopes “Monkey Trial” — the reason you’re not reading the Bible in science class). But the ACLU’s investment policies pose concerns that the group and its supporters should whip out their phalanges and grapple with.

Because the public has no right to see how the legal organization founded in 1920 invests in securities, it could continue owning stock in BellSouth — recently acquired by the ACLU’s courtroom nemesis, AT&T, against whom the ACLU has cases pending related to the hometown nosey body’s alleged involvement in the National Security Agency’s domestic-wiretapping program, secretly authorized in 2001.

By press time, those dyed-in-the-liberty-parchment constitutional defenders at the ACLU were unwilling to explain the moral allegory they’ve had in the works ever since AT&T made public its intent to merge with BellSouth Corp. beyond essentially pleading the Fifth.

The “IRS does not require that the ACLU disclose its individual stock holdings” to the public, wrote the nonprofit’s finance administrator, Jennifer Consilvio, in an email to the Current weeks before the FCC-approved merger in late December. “Under generally accepted accounting principles, the ACLU is not required to list its specific stock holdings in its audited Financial Statements.”

The fact that the ACLU held stock in the former BellSouth was neither secret nor widely reported. Posted on the group’s website was a press release about the Atlanta BellSouth shareholder meeting the ACLU’s Technology and Liberty Project Director, Barry Steinhardt, attended in July 2006. He shared a cautious word about marrying into a burden.

AT&T is a liability to stockholders because it faces “tens of billions of dollars in potential damages as a result of its involvement with NSA spying” Steinhardt said. (Notice he didn’t say his group’s legal team is out to guarantee that burden?) “More broadly, BellSouth’s shareholders should think about this not just as part-owners of BellSouth, but also as Americans,” Steinhardt said in the release. “They must think carefully about whether they want their company to join with one that seems to be undercutting precious things this country holds dear: the rule of law, the separation of powers between Congress and the Executive, and Americans’ most basic understandings and expectations for how their private communications are treated in the United States.”

To show how seriously such stockholder activism was taken, Steinhardt’s footnote about the pitfalls of such a merger never made it to a vote, thereby excluding his dissent from shareholders’ proxy statements.

The ACLU’s inability to move the debate on the merger from the inside should silence any pollyanna arguments to keep the new AT&T stock (a BellSouth share translated into 1.325 AT&T shares) to shape the telecom giant’s approach to issues like Network Neutrality. Another slam on the ACLU’s shareholder activism: BellSouth actively lobbied Congress and the FCC to eliminate Network Neutrality equal-access protections meant to prevent your internet provider from privileging paid web content over cat lovers’ blogs and the rest of the hairball topics you’ll find in an open net.

The FCC imposed Net Neutrality conditions on the AT&T/BellSouth merger that expire in two years, leaving it up to Congress to extend any further internet protections (Maine’s Senator Olympia Snow and Massachusetts’ Congressman Ed Markey have proposed such bills). It’s a small victory in the media-ownership battle, especially when weighed against the imperial bounty AT&T got in the merger (i.e. control of 67 million phone lines, 12 million broadband users, and Cingular Wireless’s 58 million subscribers).

Deanne Cuellar of the Texas Media Empowerment Project said it’s possible for a social-justice organization like the ACLU to maintain investment policies in line with their mission. But, as noted in a recent Los Angeles Times piece on the world’s largest philanthropy, the Bill & Melinda Gates Foundation, sometimes groups working against the “ills of society” have holdings in companies that fail social-responsibility tests. In the case of the Gates’ Foundation, which addresses AIDs, malaria, and pollution-related health problems like asthma, it holds stock in soot-spewing petroleum companies and other disease-promoting culprits, the Times reports. It’s called blind-eye investing.

Whether the ACLU keeps AT&T stock while fighting an appeal against a Michigan District Court’s ruling in an AT&T-related domestic spying and related cases remains to be seen. Whether it alters instructions it gives to its asset managers in the future will be just as important. And now that President Bush has moved on to opening mail without a warrant, a power he signed over the Christmas/James Brown/Gerald Ford news-consuming holidays, let’s hope that the ACLU won’t invest in presidential letter openers; that, as Transportation Security Administration allows airport-screening systems in Phoenix to take X-ray photographs of passengers — what the ACLU calls a “virtual strip search” — the privacy advocates won’t go out and invest in radiography equipment; that, as the government moves to collect web-traffic data, the ACLU won’t invest in Internet Service Providers who’ll hand over consumers’ web-surfing habits and communications. 

More by Keli Dailey



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