Learning From Alinsky

To harass corporations, progressive nuns attend shareholders’ meetings and propose resolutions.

Although the Vatican has yet to complete its apostolic visitation of women’s religious communities in the United States, many Catholics are already aware that the more progressive religious orders have moved far from their original mission of supporting the Church through prayer, service, education, and evangelization. Shifting into the areas of politics, gender rights, environmental issues, and finance, some of these women religious have become so involved in proposing shareholder-sponsored resolutions in proxy voting on corporate finance that Time magazine recently published an article titled “Nuns vs. Bankers: The Shareholder Proxy Wars.”

Drawing from Saul Alinsky’s 1970s “Proxies for People” strategy, progressive nuns are now attending shareholders’ meetings and engaging in proxy votes to confront corporations on issues ranging from executive compensation and derivatives to military spending to “ending the corporate control of (bottled) water.” (Time reports that under “Securities and Exchange Commission (SEC) rules, any shareholder of a publicly traded company that has held $2,000 worth of that corporation’s stock for at least a year can send in a proposal to be voted on at the firm’s annual meeting.”)

In “Nuns vs. Bankers,” Time reported on the role that the New Jersey-based Sisters of Charity of St. Elizabeth played in demanding that Citigroup ratify a proposal requiring the company to issue a report by the end of the year stating its policies on the collateral used to back many of the bank’s most complicated trades. The Sisters of Mercy have demanded that Lockheed Martin detail how much money it spends developing space weapons.

Another issue of interest to progressive religious orders, especially the Franciscans, is environmentalism. Claiming that the Franciscan Federation has a “special tie to environmental issues because of the emphasis on nature in the spirituality of St. Francis of Assisi,” the federation has collaborated with Protestant churches in making interfaith statements at the World Water Forum.

Designating themselves “water warriors,” these Franciscan nuns and priests claim that they focus on the “sacredness of water” and have invited individuals to sign pledges to boycott bottled water and challenge “corporate control of water.” On the Franciscan Sisters of Mary website, the so-called “Green Franciscan Sister” Janet Corcoran claims that “Sister Mother Earth needs all the help she can get, especially when it comes to water.”

Like the Franciscans, the National Coalition of American Nuns, an organization representing 1,200 women religious, recently issued a resolution urging members to abstain from bottled water. The Sisters of Charity of the Blessed Virgin Mary encourage people to sign pledge cards stating their commitment to abstaining from bottled water. Suzanne Golas of the Congregations of the Sisters of St. Joseph of Peace has found her place as a “water warrior” at the United Nations. There, she has a ministry called “Waterspirit” through which she promotes the ties between spirituality and environment, with a special focus on what these nuns all call the “sacredness of water.”

The commitment to end what the nuns see as the “corporate claim on water” has led Sr. Betty Kenny, a member of the (Rochester, Minnesota) Sisters of St. Francis to lead her sisters to buy “token shares of stock in the big water companies such as Coca-Cola, Pepsi and Nestle. We do this so we can work the stock—vote proxies, contact the company CEOs, and attend the shareholder meetings.”

WORKING THE STOCK

Time has long been interested in proxy wars. As far back as June 1970, Time published “Corporations: Proxies for Protesters” which warned that  “entrenched managements usually try to brand those who start proxy fights as ‘raiders’ or, in the epithet applied by Montgomery Ward executives, ‘financial pirates.’” The article described some of the earliest attempts to employ Saul Alinsky’s strategy by introducing Alinsky-devotee, Charles Pillsbury, who was the “22-year-old scion of the family that founded the flour-milling Pillsbury Company.”

Pillsbury, then a senior in Latin American studies at Yale in 1970, was trying to lead a proxy fight as part of his protest against the Vietnam War. The owner of 101 Honeywell Inc. shares, Pillsbury joined the “Honeywell Project,” a group of Minneapolis radicals that tried to pressure the company to stop bomb production by staging demonstrations at plants. Rather than simply picketing the plants, Pillsbury escalated the protest by filing a lawsuit to win the right to inspect the list of Honeywell’s other shareholders. He wanted to solicit their proxies for Honeywell’s annual meeting—with the aim of electing at least one director who would vote to stop the manufacture of bombs.

Alinsky, Time reported in 1970, “would solicit proxies from foundations, mutual funds, union welfare funds, churches, and universities and vote them to compel corporations to pursue such social goals as ending pollution,” adding that he was “getting voluntary proxies every day from individual sympathizers—and telephone calls from worried and presumably un-emancipated corporate executives sounding him out about his intentions.”

Progressive Catholic parishes always held a strong appeal for Alinsky because of the access these parishes afford to organizers. As we reported earlier in CWR (April 2010), Alinsky began his “Proxies for People” program in Catholic parishes in Rochester, New York in the aftermath of serious race riots in the late 1960s. Convincing Catholic parishioners who held Kodak stock to turn their proxies over to his organizing group, Alinsky used the Church itself to pressure Eastman-Kodak to begin a policy of affirmative action, and to encourage corporations to address workers’ demands by opening their doors to collective bargaining.

In his memoirs, Alinsky recalls that his newly organized progressive stockholders went to annual meetings “wielding proxy power to change corporate policy and practice.”

Alinsky wrote in his memoirs that “all great leaders invoke moral principles to cover naked self-interest in the clothing of freedom, equality, a law higher than man-made law…all effective actions require the passport of morality.” In their pursuit of power, proxy-wielding progressive nuns carry the passport of morality to shareholders’ meetings today as they start proxy fights for a growing list of progressive causes.

Still, these nuns are selective about exactly when and where they choose to wield that passport. Attempting to transform the bottled water industry, and claiming that they care deeply about out-of-control executive compensation in financial firms, progressive nuns ignore the fact that among the highest-paid executives in the country are those who run Catholic health organizations and institutions. These progressive nuns conveniently pay no attention to the fact that most of these highly paid administrators are members of the Catholic Health Association, a lobbying organization led by one of their own sisters, Sr. Carol Keehan.

As CWR reported earlier this year, Lloyd Dean, the CEO of Catholic Healthcare West, is one of the highest-paid hospital administrators in the country. Recently appointed to chair the board of the Catholic Health Association, Dean received a salary of $5.3 million from Catholic Healthcare West, a hospital system based in San Francisco. According to the Wall Street Journal, Ascension Health paid its CEO an annual salary of $3.3 million.

Spokesmen for Healthcare West say Dean’s compensation “reflects his skill in turning the hospital system around financially.” But the Wall Street Journal reports that one reason for the non-profit hospital’s soaring profits is a gradual increase in Medicare reimbursements after federal budget cutbacks during the 1990s. By merging and gaining scale, many non-profit hospitals also gained leverage in price negotiations with health insurers. The Wall Street Journal maintains that many non-profits can attribute their profits to “demanding upfront payments from patients, hiking list prices for procedures and services to several times their actual costs, selling patients’ debts to collection companies, focusing on expensive procedures and issuing tax-exempt bonds and investing the proceeds in higher-yielding securities.” All of these profits are untaxed.

This gets no attention from proxy-wielding nuns as they continue to focus on financial firms like Citigroup.

INTERFAITH POLITICAL MISCHIEF

Many of these well-orchestrated proxy fights against large financial firms are organized by major non-profit organizations like the Interfaith Center on Corporate Responsibility (ICCR). Since its founding in 1971, when representatives from a number of Protestant denominations joined together to challenge corporations, the ICCR has sought to transform the corporate world.

Today’s ICCR has become much more “Catholic” in its governance and orientation, as several nuns and representatives of religious orders serve on the ICCR Board. Declaring that it is “building a more just and sustainable world by integrating social values into corporate and investor actions,” the ICCR claims to seek nothing less than total transformation of corporations.

Part of the “transformation” involves enlisting Catholic nuns and others from the faith community in waging proxy fights against corporations. The goal of the ICCR is to change how companies relate to investors, stakeholders, and the global community. Some of the strategies the ICCR uses are: sponsoring shareholder resolutions, engaging in dialogue with corporate management, networking with others who share concerns, participating in public hearings, organizing letter-writing campaigns, and partnering with community organizations.

Although the ICCR claims to be concerned about excessive executive pay, several of the members of the organization’s own governing board are representatives of those large, non-profit healthcare companies with the most generous pay packages for their own executives. Sitting on the ICCR Governing Board is Susan Vickers, RSM, a representative of Lloyd Dean’s Catholic Healthcare West. Other members of the ICCR Board include leaders of Trinity Health, Bon Secours Health System, Christus Health, and Catholic Healthcare Partners, as well as representatives of the Congregation of St. Basil, the Jesuit Conference, the Province of St. Joseph of the Capuchin Order, the Missionary Oblates of Mary Immaculate, and the Marianists.

In the ICCR’s most recent annual report, Executive Director Laura Berry congratulates ICCR’s “eerily prophetic warnings with regard to the insufficient underwriting standards, derivatives trading, and securitization of sub-prime debt that led to the disastrous market collapse.”

The ICCR has supported President Obama’s stance on regulating derivatives and recently called on Citigroup’s board of directors to report on how the bank uses collateral for its derivatives trading.

In “Nuns vs. Bankers,” Time readers are introduced to Sr. Barbara Aires, the nun who is the coordinator of corporate responsibility for the Sisters of Charity, based in Convent Station, New Jersey. Aires claimed to have been concerned about derivatives and the risks they pose for banks and other financial firms for a number of years, and has proposed shareholder resolutions in the past asking Citgroup and other banks to disclose more about the transactions, which include credit-default swaps.

In response to the nuns, Citigroup’s proxy recommended that shareholders vote against the Sisters of Charity’s proposal, pointing out that the firm has appropriate risk-control measures in place that are well documented in its annual report.

The nuns have not succeeded in all of their battles, but judging the success of their activism by the shareholder ballot box is “short-sighted” according to Nell Minnow, editor of the Corporate Library, an online organization that promotes corporate governance. In an interview with a reporter for the New York Times in 2005, Minnow said that, while the nuns’ campaign may seem “quixotic” at first, such efforts often mark the leading edge of a cultural phenomenon. Total corporate transformation takes time, and it appears that the nuns are willing to wait.

 


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About Anne Hendershott 95 Articles
Anne Hendershott is professor of sociology and director of the Veritas Center for Ethics in Public Life at Franciscan University of Steubenville. She is the co-author of Renewal: How a New Generation of Priests and Bishops are Revitalizing the Church (Encounter Books).