Princeton University says it “no longer owns” bonds of BAE Systems, a controversial British arms supplier, that WPRB reported yesterday were purchased in 2001. This disclosure appears to represent a departure from the University’s stated policy of not discussing investment holdings.

In an e-mail sent to WPRB Wednesday evening, University spokeswoman Cass Cliatt wrote:

A case in point is your inquiry related to BAE. While we do not disclose specifics of our investment portfolio, I can confirm that your inquiry relates to a fixed-income account that was widely diversified, but since mid-2003, the University no longer owns those securities.

BAE Systems has been criticized for dealings with, among others, Suharto’s Indonesia and Robert Mugabe’s Zimbabwe and has been investigated on charges of alleged corruption on multiple occasions.

Additionally, details surrounding the foreign financial account or accounts held by the University in Zimbabwe, first revealed by WPRB on Tuesday, have yet to be disclosed.

In her Wednesday evening e-mail, Cliatt instead suggested that:

members of the campus community with interest in these issues typically would not need to know whether the University is invested in Zimbabwe today to know whether they feel the University should be invested in Zimbabwe. And looking at a list of investment holdings on a given day can’t tell you what we’re invested in today. It tells you only what we were invested in at the time the list was published.

Tomorrow afternoon, at the invitation of the University, WPRB will sit down with Andrew Golden, the president of the Princeton University Investment Co. (PRINCO), to discuss how the University makes and monitors investments, why Princeton has stopped disclosing printouts of investments–as was a standard practice during the late 1990′s up until 2002–and why consideration of non-economic factors in investment appear only to be considered after concerns are raised by the campus community.

[Editor's Note: If you have questions you feel WPRB should ask Mr. Golden, send them along to tips@wprb.com before 1:30 PM tomorrow]

Our full program on Zimbabwe, and on Offshore Financial Centers (OFCs)– where companies, individuals and foundations can invest funds at very low tax rates, usually at the expense of their home nations’ tax revenues– aired this afternoon and will be posted online tomorrow evening. Roughly one third of Princeton’s declared foreign financial accounts, as of June 2007, are situated in OFCs.

In 2001 Princeton University purchased bonds in British arms supplier BAE Systems, essentially giving a $1.5 million dollar loan to a company whose dealings with regimes like Robert Mugabe’s Zimbabwe have come under repeated scrutiny from investigators, journalists and activists, WPRB has learned.

In Zimbabwe, BAE has been tied to alleged efforts by arms dealer James Bredenkamp to supply the government with military equipment, potentially in violation of sanctions. Just days ago Bredenkamp, who The Guardian claims “acted as BAE’s agent in southern Africa”, had his assets frozen by the United States Treasury Department for his close relationship with Robert Mugabe’s regime.

For years BAE supplied military equipment to Zimbabwe, a relationship that began in the 1980’s when the Zimbabwean Air Force acquired 12 fighter planes from British Aerospace, BAE’s predecessor.

In 2000, the British government imposed an arms embargo against Zimbabwe, yet replacement parts for BAE-manufactured planes arrived as late as 2001, in apparent violation of sanctions, according to a UN report. Those components were allegedly supplied by Bredenkamp, who received £20,000,000 between 2003 and 2005 from BAE, The Financial Times reported this July. The payment served as “the first detailed evidence of a financial relationship” between Bredenkamp and the company. Both have both repeatedly denied violating sanctions. Continue reading →