By Jack Ucciferri

IN APRIL OF 2007, STEVEN SPIELBERG WROTE AN OPEN LETTER URGING THE CHINESE Communist Party to take a leadership role in the negotiation of an end to the genocide in Darfur.

"I believe," Spielberg wrote, "there is no greater crime against humanity than genocide. I feel strongly that every member of the world community has a moral and ethical responsibility to act to prevent such crimes, to eliminate the conditions in which they are bred and to combat them wherever they exist."

China reacted by dispatching a high level envoy to urge the Sudanese leadership to accept an international peacekeeping force, but Chinese state-controlled companies continued to do business with the Sudanese government and the humanitarian crisis is as desperate as ever.

And so, ten months after writing that letter, Spielberg made international headlines and drew the ire of the Chinese government by resigning his post as artistic advisor to the 2008 Olympic Games in Beijing, writing a statement sent to the Chinese ambassador that his "conscience will not allow me to continue with business as usual."

Conscience--the complex of ethical and moral principles that control, inhibit, or guide actions--is again becoming a legitimate factor in economic decisions. Our society's collective conscience knows that business as usual is not good enough when business as usual means supporting genocide.

The Darfur divestment movement is the latest chapter of a decades-long movement to inject some minimal humanitarian standards into the international capital markets. As the genocide in Darfur, Sudan rages on, targeted divestment from companies whose operations support violent conditions in the Sudan region has emerged as one of the key strategies of peace advocates.

The Sudan divestment movement--a coalition of committed celebrities, students, investors, and religious groups--has successfully lobbied a broad range of investors to avoid investing in a small group of extremely problematic companies, most of which are Chinese owned.

Theoretically, capital markets exist to efficiently allocate investment resources, but efficiency in this context is a dynamic notion. A business practice that exploits stakeholders or the environment is calculated as efficient--and rewarded accordingly in the capital markets--until opposition to the practice raises the associated costs and renders them inefficient. Cultural resistance to bad corporate behavior directly impacts the pricing of corporate securities.

By urging (or shaming) prominent investors into divesting from certain companies, activists leverage the power of capital markets to send a message that doing business with certain egregious companies will come at a social cost. Through loss of customers and business partnerships, through negative media attention, rising cost of capital, potential litigation, and the prospect of stricter regulations, the costs of being linked to culturally unacceptable business practices often translate into significant impacts on a company's bottom line. Capital markets can be and should be harnessed to achieve beneficial results for humanity. Social license to operate is--and should be--a requisite consideration in the strategic planning that corporate boards of directors have the fiduciary duty to undertake.

The most prominent historical example of a successful divestiture campaign was the campaign to divest from international companies operating in South Africa during the apartheid era. That campaign pursued a strategy of methodically altering the cultural landscape related to apartheid and thereby altered the risk calculation of investing and doing business there. Though it took many years to gain traction among large investors, as soon as institutional U.S. investors began to withdraw financial backing from companies operating there, major corporations perceived that their social license was at stake and they were forced to exit South Africa's otherwise profitable market. The racist regime immediately initiated negotiations with Nelson Mandela. And the rest, as they say, is history.

Fast-forward to 2008. The Franklin Templeton family of funds is the U.S. mutual fund company with the most significant holdings of the "very worst of the highest offender" companies, according to the Sudan Divestment Taskforce. As of August 2007, Franklin Templeton owned roughly $3 billion worth of stock in these firms, particularly the Chinese energy giants PetroChina and Sinopec.

The oil revenues provided by these two companies alone provide one of the Sudanese government's few substantial revenue sources. Since oil was first extracted in 1999, Sudan's military budget has more than doubled. It is estimated that 70-80% of oil revenue is used to arm and pay the soldiers who are slaughtering people in Darfur.

So if certain companies are literally complicit in the worst genocide of the twenty-first century, then that means that the owners of these companies are complicit too. And that is why advocates have been urging Franklin Templeton Funds and other major investors to divest from PetroChina, Sinopec, and ONGC (Oil and Natural Gas Company, India). Save Darfur, a coalition made up of religious groups from across the political spectrum, claims several successes, noting that both Fidelity Investments and Warren Buffett's investment corporation Berkshire Hathaway both sharply cut their stakes in PetroChina after the coalition criticized them. But so far, Franklin Templeton has been obstinate, even in the face of negative media attention and shareholder petitions.

Now comes a twist. It turns out that two owners of the San Francisco Giants baseball team--"Your SF Giants," as they advertise themselves--are heavily identified with the Franklin Templeton funds. Charles Johnson, CEO/Board Chair of Franklin Templeton Investments, is part of the group of investors that purchased the Giants in early 1990s. In addition to being a prominent member of the Giants' front office, he is also seen as having a crucial role in setting the strategic direction of Franklin Templeton policy--such as, for instance, whether or not Franklin invests in companies who are associated with genocide. And then there is Sue Burns, the Senior General Partner of the Giants, who has increasingly stepped into the limelight as the public face of the Giants ownership, following the death of her husband, Harmon Burns. Harmon joined Franklin Templeton in 1973 and "held many roles including overseeing technology and accounting and serving as chief operating officer in charge of all administration and operations and as secretary and vice president of the company" (San Mateo Daily Journal). Harmon, according to a Giants' statement on their website, "was an integral part of the initial group that bought the team in 1992. Without his participation, it is very likely that the Giants would have moved to Florida." It seems likely that Sue Burns would be able to influence the firm's policies, either internally or through divestment.

The Giants' identification with China went as far as their hosting the start of the recent running of the Olympic torch through San Francisco--the route changed at the last minute to avoid those protesting China's policies related to Tibet and Darfur. At the game later that day, Sue Burns proudly posed with the torch for photos, though none were released to the press, perhaps because San Francisco was not ready for such partisanship.

This raises some fundamental questions about the ethics of owning professional sports franchises. Should U.S. society hold Major League Baseball (MLB) to some minimal ethical standard? As we recently witnessed during the steroid controversy--when MLB was forced to hold an internal investigation, led by former majority leader of the U.S. Senate (and current Boston Red Sox minority owner) George Mitchell, spending millions of dollars before calming the media frenzy--the answer is clearly "yes."

"Baseball is a sport that has a special status under laws passed by Congress because it's our national pastime," said Henry Waxman (D) of California in 2005 when congressional hearings were held concerning steroid use. "We ought to review what's happening if [steroid laws aren't] being enforced in baseball."

Congress has also intervened on the business side of baseball to exempt it (alone of all sports) from anti-trust laws and on labor, broadcasting and taxation issues.

The Giants' website promises that "The Giants' work in the community translates into a variety of unique and progressive programs dedicated to addressing some of the most pressing needs of Northern California children and their families, including health, anti-violence, youth fitness and recreation, education and literacy." And what for the youth of Darfur?

Teams such as the San Francisco Giants provide role models for our youth. "This is not about Congress checking personal behavior," said Rep. Tom Davis (R) of Virginia, who conducted the Congressional steroids hearing. "It's about people seeing baseball players as role models for their kids." Pete Rose was barred entry into the Hall of Fame for gambling and Barry Bonds' ambitions appear similarly destined.

But if Pete Rose and Barry Bonds are expected to be role models for the next generation, why shouldn't the owners who pay them be held to the same standard? In light of the public calumny that many players have had to endure in the media and in televised appearances before Congress because of their alleged ethical shortcomings, mightn't the Players Union be justified in turning the tables and raising the issue of the morality of owners' investment practices in the next round of collective bargaining negotiations?

Emphasizing the centrality of the spiritual and moral dimension of all human relations has been a central theme of 'Tikkun, and the way we can most easily make this dimension visible is by insisting on its recognition in all social practices that are or should be conceived as "public" in nature. Drawing out the public aspect of these practices allows us to legitimately assert that the practice involves all of us and that those who engage in it have a responsibility to adhere to community standards of ethical conduct. The politico-moral dimension of sport is particularly prominent right now as we prepare for the Beijing Olympics, and if we think of the courageous actions of Jesse Owens standing up to Hitler at the 1936 Olympics in Berlin, or Tommie Smith and John Carlos holding" their fists high on the 1968 Olympics medal stand in protest against the mistreatment of blacks in the United States, we can see how significant the public aspect of sports can be in helping to awaken and elevate the world's moral conscience. In this context, Steven Spielberg was right to protest China's violations of international human rights in Tibet and Darfur by divesting his cultural capital from a sports event proclaiming China's international legitimacy.

But it is always easier to protest an "other's" actions, especially when that "other" is an ascendant rival. Sports fans of conscience should reflect upon why China's support of genocide is more newsworthy than the support of U.S. based mutual funds. We might find ourselves morally called to withdraw our support for the San Francisco Giants until the team's owners disassociate themselves from genocide. From an economic standpoint, "Your SF Giants" may need to be reminded who pays their bills and to face the cost, in the form of lower attendance, of being associated with immoral investment practices. But in another sense--a sense most consistent with Tikkun's ethic of compassion and speaking to peoples inherent ethical and moral aspirations--we should encourage Charles Johnson and Sue Burns to voluntarily embrace the moral dimension of their leadership role. By supporting divestment from companies that support the atrocities in Darfur, Mr. Johnson and Mrs. Burns would be demonstrating the very ideals of fair play and justice that Major League Baseball once represented and is now working so hard to reclaim. This is an opportunity for them to make their fans proud and to serve as models for owners of franchises throughout professional sports.

Jack Ucciferri is the Research and Advocacy Director at Harrington Investments, Inc., a socially responsible investment advisory firm in Napa, CA. He is on leave from an M.A. program in Global Political Economy at UC Santa Barbara.