Church of England's Wonga woe
"Church ethical investors defend their stake in Wonga. Un-*******-believable," tweets the Rev'd Giles Fraser. And he is absolutely right.
The Church of England's financial arm has an interest in the payday lending firm, believed to be around £100,000. But this apparently forms part of much bigger pooled fund, and it isn't possible to get rid of the Wonga element without risking as much as £9million on the whole package. So the Ethical Investment Advisory Group of the Church of England has decided to retain the shares in 5,853% APR Wonga, and they do so in a glossy brochure with an appeal to the Parable of the Wheat and the Tares (Mt 13:24-30): "Let both grow together until the harvest: and in the time of harvest I will say to the reapers, Gather ye together first the tares, and bind them in bundles to burn them: but gather the wheat into my barn."
So, Wonga must prosper for the Church of England's investment fund to prosper. But when it comes to cashing in, the Wonga shares are not destroyed, as the parable ordains. Nor are the proceeds of exorbitant usury bound in separate bundles for (say) the specific alleviation of poverty. No, the shares are simply sold on to another investor, and the funds enrich priestly pension pots. The Ethical Investment Advisory Group explains:
Nevertheless, we are in the process of tightening our recommendations regarding investment restrictions, both in terms of the maximum percentage of restricted activities that may take place within permitted investments and our rules around pooled funds, which is where the investment in Wonga occurred. Pooled funds are often the only way to access certain asset classes and investment strategies – including venture capital, which can not only increase financial returns for investors but also serve society. Even so, difficult choices remain and it is inevitable that the investing bodies will from time to time graze their knees as they interact with a complex and ambiguous business world. But in our view, it is better to stay on the field of play than to sit on the sidelines.And they helpfully illustrate this point with a picture:
Marvellous, isn't it?
The thing is, they have spectacularly missed the point. It may indeed be impossible to be 100% 'ethical' in one's investments, for shares in a hotel chain may indeed lead to porno films, and a stake in a bank might incorporate investment in military ordnance.
But when the Archbishop of Canterbury turned over the Wonga tables and "asked for aspects of ethical investment policy to be reviewed", he wasn't asking for a clever financial fudge: he clearly wanted rid of them, for they were a manifest embarrassment, and he said so.
He is of the view that Wonga is shamelessly exploitative and unethical, not to say 5,853% evil. He has advocated the establishment of a network of credit unions in order to help the poorest and most dispossessed in society, and explained his objective unequivocally: "I’ve met the head of Wonga," the Archbishop said, "and we had a very good conversation and I said to him quite bluntly ‘we’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of existence’."
It's difficult to compete a company out of existence when you're active underpinning their share price.
It's difficult to make the money-lenders redundant when you're contributing to their accumulated wealth.
It is impossible to minister with integrity if you do not practise what you preach.
We are now at the point where the Ethical Investment Advisory Group of the Church of England is unethically undermining the ministry of the Archbishop of Canterbury. They are permitting Mammon to subvert his mission to the poor and hinder his witness for justice, compassion and truth. It will not be possible for Archbishop Justin ever again to rail against Wonga usury without fingers pointing straight back into his face and his critics crying "Hypocrite!". They won't be interested in reasoned financial nuances and the subtle penalty clauses of 'pooled' investments.
Imagine for one moment if the Vatican Bank were found to have shares in Durex.