Complaint: UNM Foundation invests in fossil fuels while its board members work in the industry

Students say those are conflicts of interest that also gamble away their futures

By: - November 1, 2021 6:00 am

UNM student Paula Noriega holds a sign during a rally demanding the UNM Foundation divest from fossil fuels Friday outside the UNM Student Union. “The question now is whether we will have the courage to act before it’s too late,” Noriega said. “How we will respond to that question will have a profound impact on the world that we leave behind, not only for us, but for future generations.” (Photo by Austin Fisher / Source NM)

Student members of the University of New Mexico group Leaders for Environmental Action and Foresight (LEAF) have been demanding UNM officials take concrete action on the climate crisis for more than two years.

They have demanded officials update UNM’s 12-year-old climate plan, pull nearly $29 million worth of investments in fossil fuel companies, and plan for a zero-waste campus by 2030.

“Unfortunately, we have seen UNM take very little action,” said Raven Alcott (San Ildefonso), who is a senior at UNM and a LEAF co-organizer. She tries to limit her own individual impact on the climate, but she said real change comes from institutions using their power to address the climate crisis.

New Mexico will face some of the most severe effects of climate change, Alcott said, particularly frontline, historically underserved and Indigenous communities who will be the ones to endure those catastrophic effects to land, water, economy and society.

That frustration with the lack of action is what led LEAF, the UNM Coalition on Climate, and attorneys from the Climate Defense Project to file a complaint last week against the UNM Foundation, alleging that it violates state law by continuing to invest in oil and gas, and that some of its members’ ties to the industry are conflicts of interest.

Gambling with futures

 “Every dollar invested in the fossil fuel industry is one against the future that our degree is supposed to guarantee,” Alcott said. “We refuse to let UNM gamble our futures away. We need large institutions like UNM to do their part and follow through on their responsibilities and take a leadership role to create a renewable, bright future for us all.”

The UNM Foundation receives donations from alumni and companies, and then puts it in the school’s endowment, which is then invested in different companies and stocks with the objective of making the endowment larger, said Stefi Weisburd, a former faculty member and Coalition on Climate organizer.

“We think that their investments in fossil fuels are contrary to their charitable mission,” Weisburd said.

UNM LEAF is calling for

  • An updated climate plan
  • Divestment from fossil fuel
  • A zero-waste campus by 2030

Weisburd said the money from the endowment has gone toward professorships, the recent rebranding of the UNM logo, the bail out of the UNM Athletic Department, and most ironically research in sustainable water.

“Now, why do you think water is a challenge in New Mexico?” she asked. “Because of those fossil fuel companies that the Foundation is investing in. They are flaring and venting and spilling and burning and extracting carbon in the hundreds of millions of tons each year in New Mexico, which is making New Mexico hotter and drier and using up our water.”

Attorney General reviewing complaint

The complaint, filed on Tuesday, Oct. 28, identifies 28 companies in which the Foundation invests through its public equity index funds that operate in New Mexico. Private equity investments have been more difficult to track down, Weisburd said.

The complaint asks Attorney General Hector Balderas to investigate the foundation and order it to cease its investments in fossil fuels.

“We can confirm we have received the complaint and it is under review,” the Office said in a written statement Friday afternoon.

The complaint is signed by current and former elected officials, scientists, frontline community members, alumni, students, faculty and 47 organizations based in New Mexico.

The complaint states:

The UNM Foundation “may not simply seek profit at any cost: the privileges that the Foundation enjoys as a nonprofit institution, and its obligation to support the public purposes of the state’s flagship institution of higher education, come with the responsibility to ensure that its resources are put to socially beneficial ends. 

The obligation to consider the charitable purposes of an institution when making investments is a ‘fundamental duty’; fiduciaries such as the directors of the UNMF are bound by a stringent standard of loyalty to these purposes and to society at large.”

The complaint also accuses members of the foundation’s Board of Trustees and the UNM Regents of maintaining significant financial ties to the fossil fuel industry.

These conflicts of interests violate the “duty of loyalty,” according to the complaint, “because fossil fuel companies’ business models are in fundamental tension with the university’s mission” and the values the foundation espouses to hold. 

UNM student Jess Newman, who’s from Albuquerque, said we can see the effects of climate change right now, and they encroach on the future. 

“This year I crossed over the Rio Grande multiple days. I continue to all the time, and it is so depressing to see how low our river is and how little water we have here,” Newman said. “Sometimes we have weeks or months without any precipitation at all. Drought here is a threat to not only our livelihoods, but the delicate ecosystems that our native wildlife need to survive. Who knows if Albuquerque and the rest of the Southwest will be inhabitable in the next century, or even the next 50 years?”

Newman said it is time that contributors to climate change, like the UNM Foundation, cut their ties to harmful industries and reinvest in clean energy.

“New Mexico could be a leading state in solar and wind energy, yet it is not because of the fossil fuel industry here,” she said. “What are we doing?” 

Conflicts of interest on the UNMF Board of Trustees, according to the complaint:

Board of Trustees member and recent chair Chair Randy Velarde is the Founder and President of The Plaza Group, a provider of marketing and related services for customers and suppliers in the petrochemical, refining and plastics industries.

The Plaza Group markets refining, petrochemical and polymer products for companies including Delek, Husky Energy (part of Cenovus Energy Inc.), Marathon, Mitsui, Shell Valero and CEPSA.

Velarde was appointed by the former U.S. secretary of energy and state Gov. Bill Richardson to serve on the National Petroleum Council some time between 1998 and 2001. In 2016, Velarde joined the board of the Consumer Energy Alliance, a fossil fuel front group funded by corporations such as BP, ExxonMobil, Shell and Chevron.

Trustee Tommy Roberts is a past president of the Board of Directors of the Independent Petroleum Association of New Mexico and remains an active member of that organization.

According to its website, the association “advances and preserves the interests of independent oil and gas producers, while educating the public to the importance of oil and gas to the state and all our lives.” The association is growing, the site states, and “protect, defend and promote the industry that is the very foundation of our way of life.”

Board of Trustees Chair Ryan Mummert is a senior partner with the Horizon Group at Morgan Stanley. The Horizon Group has a long history of working regionally in the oil and gas sector.

Trustee Brad Preber is the CEO of Grant Thornton LLP, which has a large energy division that serves oil and gas companies.

There are currently 27 members of the Foundation’s Board of Trustees.

Board of Regents member Regent William H. Payne was the state co-chair for the American Legislative Exchange Council (ALEC) and a member of ALEC’s Energy, Environment and Agriculture Task Force. ALEC is a corporate-funded organization that writes “model bills” for state lawmakers, which often directly benefit these corporations.

Payne has also received campaign donations from oil and gas companies operating in New Mexico, including companies in which the UNM Foundation invests.

UNM students, faculty and graduate workers marched from the Student Union to President Garnett Stokes’s office Friday after a rally demanding the UNM Foundation divest from fossil fuels. (Photo by Austin Fisher / Source NM)

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Austin Fisher
Austin Fisher

Austin Fisher is a journalist based in Santa Fe. He has worked for newspapers in New Mexico and his home state of Kansas, including the Topeka Capital-Journal, the Garden City Telegram, the Rio Grande SUN and the Santa Fe Reporter. Since starting a full-time career in reporting in 2015, he’s aimed to use journalism to lift up voices that typically go unheard in public debates around economic inequality, policing and environmental racism.