This Week in SRI

"Friend of the Court" brief in SEC vs. Citigroup (2nd Cir Ct of Ap)

noreply@blogger.com (William Michael Cunningham) — Thu, 26 Jan 2012 15:10:40 PST

William Michael Cunningham submitted a "Friend of the Court" brief in a case currently pending before the United States Court of Appeals for the Second Circuit.

The case concerns the rejection, by a Federal Judge, of a settlement agreed to by the United States Securities & Exchange Commission (SEC) and Citigroup Global Markets Inc. (Citigroup), the latter accused of securities fraud.

As a friend to the Court, Mr. Cunningham seeks to provide an independent, objective and unbiased view in support of broad public interests. His education and experience have uniquely positioned him to provide objective, independent research and opinions concerning the issues central to the case.

The "Friend of the Court" brief concludes by noting that markets have become less stable. Faulty regulatory practices and collusion (too big to fail, etc.) have moved regulators and lawmakers..in the direction of supporting suppliers to the financial service marketplace. A decision by the (Appeals) Court in favor of the SEC and Citigroup will further weaken this support, to the detriment of market institutions and the public. My economic models show the global economy remains at risk.

http://prlog.org/11782028

Pamela Gibbs Selected as SEC OMWI Director

noreply@blogger.com (William Michael Cunningham) — Wed, 04 Jan 2012 14:26:06 PST

"The Securities and Exchange Commission..announced that Pamela A. Gibbs has been named as the inaugural Director of the Office of Minority and Women Inclusion, which oversees diversity in the agency's employment, management, and business activities.

Ms. Gibbs comes to the SEC from the Commodity Futures Trading Commission, where she has served since October 2009 as the Director of its Office of Diversity and Inclusion. In that role, Ms. Gibbs was the principal advisor to the CFTC Chairman on equal employment and diversity matters, and oversaw outreach and recruitment of minority and women's groups. She also worked with the agency's Office of General Counsel and Office of Human Resources to ensure fairness and consistency in the agency's personnel policies and practices.

Prior to the CFTC, Ms. Gibbs.. started in 1991 as a trial attorney in the Civil Rights Division (of the Department of Labor). She later was Acting Deputy Director for Program Operation in the Office of Federal Contract Compliance Programs, and was Director of the Equal Employment Opportunity Unit in the Employment Standards Administration from April 2006 to October 2009."

The CFTC has one of the weakest Offices of Diversity and Inclusion in the Federal Government and is not included under OMWI. It should also be noted that the Department of Labor dropped the ball on many significant discrimination cases over the years. Finally, it is well and widely known that EEOC has been ineffective since the days of Clarence Thomas.

All in all, a choice that bears watching.

Justice Dept settlement with Countrywide yields $2,000 per household

noreply@blogger.com (William Michael Cunningham) — Wed, 21 Dec 2011 13:31:18 PST

"The Department of Justice only sought less than $2,000 per household in the largest residential fair lending settlement in history to resolve allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008.

The settlement provides $335 million in compensation for victims of Countrywide’s discrimination during a period when Countrywide originated millions of residential mortgage loans as one of the nation’s largest single-family mortgage lenders. The settlement would provide an average of $1,675 if each eligible borrower received compensation.

According to the Joint Center for Political Studies, 'In 2006, more than one-half (52.9 percent) of African Americans and nearly half of Hispanics (47.3 percent) who acquired home-purchase loans had subprime loans.'"

For more information, see: http://www.justice.gov/fairhousing

Obama Administration releases Diversity Plan

noreply@blogger.com (William Michael Cunningham) — Mon, 28 Nov 2011 17:01:32 PST

The plan seeks to implement Executive Order 13583 establishing a coordinated, government-wide initiative to promote diversity within the Federal government. The Executive order "directs departments and agencies to develop and implement a more comprehensive focus on diversity." The Plan focuses on:

Workforce Diversity

Workplace Inclusion

Sustainability

Much of the initiative is concerned with metrics, that is, developing and collecting appropriate statistics to measure diversity and how well the Government is meeting it's goal to become more so. Another focal point appears to be outreach. Other key steps include leadership development and mentoring.

These are all tried and true methods. While there is nothing earth shattering in the Report and Plan, we find it a welcome alternative to the eight years that the previous Administration spent talking about diversity without ever once offering a plan for the Federal Government to become more so. See: http://www.opm.gov/diversityandinclusion/reports/GovernmentwideDIStrategicPlan.pdf

Occupy and Small Business

noreply@blogger.com (William Michael Cunningham) — Sat, 19 Nov 2011 11:59:57 PST

Support for movement now can mean more business later

By William Michael Cunningham, Published in the Washington Post on November 12

I have been attending the Occupy K Street protest. In fact, I have put to use my skills running an investment firm, holding a teach-in at the site on the causes of and cures for the financial crisis.

In my time there, I spoke with protesters, sympathizers and opponents. I learned a lot about the movement, much of which was, to me, surprising. Some of these lessons may be of interest to businesses in the area.

Regardless of your political views, I think small business people should embrace the protests. I know this is difficult — small business people tend to be conservative and tend to vote Republican. But to the extent that income disparity eases, more people will have money. With more money, more people will be able to buy goods and services from
small businesses.

And considering the number of small businesses that have failed since the start of the financial crisis, we would have to say that small businesspeople have been more negatively impacted by fraudulent bank practices than most. Also remember that banks were supposed to lend bailout money to small businesses. They did not. They shamefully sat
on the money so that they could earn bigger bonuses. These are reasons to support the Occupy Movement, not condemn it.

The K Street site has received support from small businesses. While I was milling around one Sunday, a local baker (Against the Grain bakery in Chestertown, Md.) brought 90 loaves of bread for the protesters. Other small businesses have provided significant material support. Local branches of larger businesses, including a local outpost of a
national coffee chain, are supporting the movement site. The coffee shop has allowed protesters to use its restrooms.

It is important to say that I do not speak for the Occupy K Street Protest. No one does. Each Occupy settlement is independent. Occupy K Street is very different from Occupy Liberty Plaza, which is independent of Occupy Wall Street. They are all self governing and self-sufficient. Think of them as franchises, but without the bothersome and restrictive franchise agreement.

What I’ve learned is that they are Democrats, Republicans, Independents, Methodists, Catholics, Protestants, Quakers, atheists, gay, straight, black, white, Hispanic, Asian, Ron Paul supporters, young people, old people, homeless people, college educated, non college educated, Greeks, English, Aussie, Taiwanese.

They are here because they are struggling economically and ethically. The fact that the October 15th protests were held in 951 cities indicates that this is truly worldwide.

Are they anti-corporate?

According to the conversations I have had with protesters, many believe that corporations, certainly those in the financial sector, have grown so powerful that they are a threat to democratic capitalism.

Remember that the American Revolutionwas a declaration that the king was not better than all other humans. Therefore, the king did not get to determine the fate for everyone in society. People can decide for themselves. All humans are equal. But artificial, man-made creations like corporations are not human, so they do not deserve the same rights as humans. Corporations exist to serve people. People do not exist for the sake of corporations. Corporations do not get to determine the fate for everyone in society.

Most feel that the democratic processes, critical to insuring competition based on the rule of law, have been captured by a small group of firms that break the law with impunity and capture outsized returns as a result. They then use these gains to further their hold on the body politic. This gives rise to an extreme amount of selfishness and greed that is detrimental to the long-term interest of the country and its citizens.

I think these protests will endure. Attempts at shutting locations in Chicago, Denver and Oakland have only served to embolden protesters. I think support now — or at least the absense of hostility — may translate into increased business later.

William Michael Cunningham is a social investing adviser with Creative Investment Research in Washington.

Pls see:

http://www.washingtonpost.com/business/capitalbusiness/support-for-movement-now-can-mean-more-business-later/2011/11/09/gIQAxxN5FN_story.html

Bank Transfer Day - November 5, 2011

noreply@blogger.com (William Michael Cunningham) — Thu, 27 Oct 2011 16:22:43 PDT

According to one site on the internet (must be logged into Facebook to follow this link):

"Together we can ensure that these banking institutions will ALWAYS remember the 5th of November!! If the 99% removes our funds from the major banking institutions to non-profit credit unions on or by this date, we will send a clear message to the 1% that conscious consumers won't support companies with unethical business practices.

• Research your local credit union options
• Open an account with the one that best suits your needs
• Cancel all automatic withdrawals & deposits
• Transfer your funds to the new account
• Follow your bank's procedures to close your account before 11/05

FIND A CREDIT UNION
USA: http://www.findacreditunion.com/
CANADA: http://locator.cucentral.com/
UK: http://www.findyourcreditunion.co.uk/"

We think this is an interesting idea. If there is a free market for the provision of financial services, then this should be a welcomed initiative. If consumers are satisfied with banking services, then no one will transfer funds. If not satisfied, then free market theory says they have the right, if not the obligation, to look for and utilize new financial service providers.

Actually, this sounds like something we advocated in February, 2011. (Last two minutes of the linked interview.)

More on the Wall Street Protests

noreply@blogger.com (William Michael Cunningham) — Tue, 11 Oct 2011 18:24:10 PDT

See: http://www.youtube.com/watch?v=yhrwmJcsfT0&feature=player_embedded

Why are the Wall Street Protesters upset?

noreply@blogger.com (William Michael Cunningham) — Mon, 10 Oct 2011 17:23:52 PDT

They are:

Upset that 20% of the country's wealth has been destroyed and not a single person has been convicted, much less indicted.
Upset that Wall Street has iron control over the country’s economic policies and that both parties are wholly owned subsidiaries.
Upset that 24 million people cannot find a full time job, that 50 million cannot afford to see a doctor when they are sick, that 47 million need the government’s help to feed themselves. They are upset that 15 million families owe more on their home than it is worth. (Alan Grayson, Former Member of Congress.)

Bank Nurtures Asian Roots

noreply@blogger.com (William Michael Cunningham) — Sun, 09 Oct 2011 18:56:00 PDT

BY MATTHIAS RIEKE. OCTOBER 10, 2011 The Wall Street Journal.

By focusing on select customers, East West Bancorp is showing it can grow at a time when many banks are struggling to find a firm footing.

East West, based in Pasadena, Calif., pays close attention to Asia. It seeks Chinese-American clients and attracts U.S. companies that do business in China. It also finances Chinese companies' expansion in the U.S. through trade finance and commercial loans.

East West has "been smart enough to link to demographics in their ancestral homeland," said William Michael Cunningham, the owner of Creative Investment Research Inc., an advisory firm in Washington with a focus on minority ...

See full article: http://online.wsj.com/article/SB10001424052970204450804576620881021962152.html

Commentary: Pen stroke could help ease black unemployment

noreply@blogger.com (William Michael Cunningham) — Mon, 12 Sep 2011 05:21:08 PDT

From the Washington Post: http://www.washingtonpost.com/business/capitalbusiness/commentary-new-rule-could-help-ease-black-unemployment/2011/09/07/gIQA8XoqKK_story.html

President Obama unveiled some ambitious ideas last week to create jobs, a plan that may have little chance of becoming reality any time soon given the $447 billion price tag and the current animus between the president and Congress. But about four weeks ago, Obama signed a little-publicized executive order that may go far in addressing a crisis exacerbated by the economic downturn: the rising unemployment rate and the diminishing wealth of African Americans.

On Aug. 18, the White House issued an executive order “to promote the federal workplace as a model of equal opportunity, diversity and inclusion.” This follows on the heels of Section 342 of the Dodd-Frank financial reform law, which created offices to monitor and encourage efforts by federal financial agencies such as the Treasury Department and the Federal Deposit Insurance Corp. as well as banks and contractors to diversify their ranks with minorities and women. Obama’s order is aimed at putting that law on the fast track and extending the requirements to all federal agencies.

Vendors who fail to make a “good faith effort” to hire minorities and women can face termination of their contracts with the government.

This is welcome news for minorities, who have been hit harder than others in the recession.

The unemployment rate for blacks hit 16.7 percent in August, up from 15.9 percent in July. White unemployment actually fell to 8.0 percent in August from 8.1 percent in July.

Moreover, black wealth declined by 53 percent from 2005 to 2009, compared with a decline of 16 percent for whites. Loss of personal wealth more adversely impacts black businesspeople because in general they are more heavily reliant on home equity.

The order will help address the very damaging differential between black and white employment, especially in the federal government where only 6.7 percent of African Americans are in senior pay levels. Monitoring the diversity of employees and contractors working for the federal financial agencies will ensure that hiring practices are fair. Federal contractors will be put on notice that their main client is actively seeking to expand employment opportunities for African Americans and other minorities, prompting them to review their employment practices.

And this may lead to an increase in black employment.

The order will be a boon for black small business vendors who will get more opportunities to sell their goods and services to the federal government. This should further boost black employment, as black firms are more likely to hire black workers.

An added benefit is that it could help spur the establishment of many new minority contracting firms. The new opportunities are especially important now, given that the Standard & Poor’s downgrade of the nation’s credit rating may make private lending more costly and the impending federal cuts may reduce the amount of Small Business Administration funding available to minority businesspeople.

All this should, over time, lead to an increase in black wealth, as these firms become successful.

With this new executive order, the administration has shown that it is committed to doing what it can to address the very serious unemployment situation in the African American community. The Aug. 18 executive order and last Thursday’s jobs speech are attempts by the White House to try, while limited by severe and unreasonable political constraints, to use powers unique to the executive office to help the country.

Unemployment in Black and White

noreply@blogger.com (William Michael Cunningham) — Tue, 06 Sep 2011 18:17:15 PDT

We created the chart at left showing black versus white unemployment in August, 2011. Black unemployment was reported at 16.7%, higher than the 16.2% rate reported in August 2010. Black unemployment was 15.5% in July, 2011. White unemployment fell to 8% in August from 8.1% in July, 2011. Further, white unemployment was 8.7% in August, 2010.

I think this puts the recession into clear perspective. While some (the Tea Party in particular) have done a lot of whining, they are in no way, shape or form bearing the brunt of this recession.

Executive Order--Establishing a Coordinated Government-wide Initiative to Promote Diversity and Inclusion in the Federal Workforce

noreply@blogger.com (William Michael Cunningham) — Tue, 30 Aug 2011 16:18:51 PDT

The White House

Office of the Press Secretary

For Immediate Release

August 18, 2011

Executive Order--Establishing a Coordinated Government-wide Initiative to Promote Diversity and Inclusion in the Federal Workforce

EXECUTIVE ORDER

ESTABLISHING A COORDINATED GOVERNMENT-WIDE INITIATIVE TO PROMOTE DIVERSITY AND INCLUSION IN THE FEDERAL WORKFORCE

By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to promote the Federal workplace as a model of equal opportunity, diversity, and inclusion, it is hereby ordered as follows:

Section 1. Policy. Our Nation derives strength from the diversity of its population and from its commitment to equal opportunity for all. We are at our best when we draw on the talents of all parts of our society, and our greatest accomplishments are achieved when diverse perspectives are brought to bear to overcome our greatest challenges.

A commitment to equal opportunity, diversity, and inclusion is critical for the Federal Government as an employer. By law, the Federal Government's recruitment policies should "endeavor to achieve a work force from all segments of society." (5 U.S.C. 2301(b)(1)). As the Nation's largest employer, the Federal Government has a special obligation to lead by example. Attaining a diverse, qualified workforce is one of the cornerstones of the merit-based civil service.

Prior Executive Orders, including but not limited to those listed below, have taken a number of steps to address the leadership role and obligations of the Federal Government as an employer. For example, Executive Order 13171 of October 12, 2000 (Hispanic Employment in the Federal Government), directed executive departments and agencies to implement programs for recruitment and career development of Hispanic employees and established a mechanism for identifying best practices in doing so. Executive Order 13518 of November 9, 2009 (Employment of Veterans in the Federal Government), required the establishment of a Veterans Employment Initiative. Executive Order 13548 of July 26, 2010 (Increasing Federal Employment of Individuals with Disabilities), and its related predecessors, Executive Order 13163 of July 26, 2000 (Increasing the Opportunity for Individuals With Disabilities to be Employed in the Federal Government), and Executive Order 13078 of March 13, 1998 (Increasing Employment of Adults With Disabilities), sought to tap the skills of the millions of Americans living with disabilities.

To realize more fully the goal of using the talents of all segments of society, the Federal Government must continue to challenge itself to enhance its ability to recruit, hire, promote, and retain a more diverse workforce. Further, the Federal Government must create a culture that encourages collaboration, flexibility, and fairness to enable individuals to participate to their full potential.

Wherever possible, the Federal Government must also seek to consolidate compliance efforts established through related or overlapping statutory mandates, directions from Executive Orders, and regulatory requirements. By this order, I am directing executive departments and agencies (agencies) to develop and implement a more comprehensive, integrated, and strategic focus on diversity and inclusion as a key component of their human resources strategies. This approach should include a continuing effort to identify and adopt best practices, implemented in an integrated manner, to promote diversity and remove barriers to equal employment opportunity, consistent with merit system principles and applicable law.

Sec. 2. Government-Wide Diversity and Inclusion Initiative and Strategic Plan. The Director of the Office of Personnel Management (OPM) and the Deputy Director for Management of the Office of Management and Budget (OMB), in coordination with the President's Management Council (PMC) and the Chair of the Equal Employment Opportunity Commission (EEOC), shall:

(a) establish a coordinated Government-wide initiative to promote diversity and inclusion in the Federal workforce;

(b) within 90 days of the date of this order:

(i) develop and issue a Government-wide Diversity and Inclusion Strategic Plan (Government-wide Plan), to be updated as appropriate and at a minimum every 4 years, focusing on workforce diversity, workplace inclusion, and agency accountability and leadership. The Government-wide Plan shall highlight comprehensive strategies for agencies to identify and remove barriers to equal employment opportunity that may exist in the Federal Government's recruitment, hiring, promotion, retention, professional development, and training policies and practices;

(ii) review applicable directives to agencies related to the development or submission of agency human capital and other workforce plans and reports in connection with recruitment, hiring, promotion, retention, professional development, and training policies and practices, and develop a strategy for consolidating such agency plans and reports where appropriate and permitted by law; and

(iii) provide guidance to agencies concerning formulation of agency-specific Diversity and Inclusion Strategic Plans prepared pursuant to section 3(b) of this order;

(c) identify appropriate practices to improve the effectiveness of each agency's efforts to recruit, hire, promote, retain, develop, and train a diverse and inclusive workforce, consistent with merit system principles and applicable law; and

(d) establish a system for reporting regularly on agencies' progress in implementing their agency-specific Diversity and Inclusion Strategic Plans and in meeting the objectives of this order.

Sec. 3. Responsibilities of Executive Departments and Agencies. All agencies shall implement the Government-wide Plan prepared pursuant to section 2 of this order, and such other related guidance as issued from time to time by the Director of OPM and Deputy Director for Management of OMB. In addition, the head of each executive department and agency referred to under subsections (1) and (2) of section 901(b) of title 31, United States Code, shall:

(a) designate the agency's Chief Human Capital Officer to be responsible for enhancing employment and promotion opportunities within the agency, in collaboration with the agency's Director of Equal Employment Opportunity and Director of Diversity and Inclusion, if any, and consistent with law and merit system principles, including development and implementation of the agency-specific Diversity and Inclusion Strategic Plan;

(b) within 120 days of the issuance of the Government-wide Plan or its update under section 2(b)(i) of this order, develop and submit for review to the Director of OPM and the Deputy Director for Management of OMB an agency-specific Diversity and Inclusion Strategic Plan for recruiting, hiring, training, developing, advancing, promoting, and retaining a diverse workforce consistent with applicable law, the Government-wide Plan, merit system principles, the agency's overall strategic plan, its human capital plan prepared pursuant to Part 250 of title 5 of the Code of Federal Regulations, and other applicable workforce planning strategies and initiatives;

(c) implement the agency-specific Diversity and Inclusion Strategic Plan after incorporating it into the agency's human capital plan; and

(d) provide information as specified in the reporting requirements developed under section 2(d).

Sec. 4. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) authority granted to a department or agency or the head thereof, including the authority granted to EEOC by other Executive Orders (including Executive Order 12067) or any agency's authority to establish an independent Diversity and Inclusion Office; or

(ii) functions of the Director of OMB relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

BARACK OBAMA

THE WHITE HOUSE,
August 18, 2011

Economics as science: what went wrong

noreply@blogger.com (William Michael Cunningham) — Wed, 24 Aug 2011 19:01:51 PDT

Unfortunately, economics as a "science" has no answer for the questions we face now.

As one person noted, "The power of a..theory may be measured as a ratio: the number of facts that it explains divided by the number and type of assumptions it needs to postulate in order to do the explaining. A theory that assumes most of what it is trying to explain is a bad theory."

That is why most economic theory is bad theory.

President Drops by Community Leaders Briefing

noreply@blogger.com (William Michael Cunningham) — Fri, 29 Jul 2011 16:39:21 PDT

We noted our attendance at one of the White House Community Leader Briefings: "This summer, the White House Office of Public Engagement is hosting Community Leaders Briefings. These events, held weekly at the White House, bring together leaders and activists from communities all across the country for an opportunity to discuss common challenges and learn how the government can help them as they work to improve their neighborhoods."

To add to the impact of these events, today the President stopped by the meeting to discuss what his Administration is doing and why they have sponsored these meetings. See the video here:

Why Does the Fed Have So Little Supplier Diversity?

noreply@blogger.com (William Michael Cunningham) — Sun, 17 Jul 2011 18:24:03 PDT

Interview on DiversityInc.com website by Barbara Frankel on Jul 12, 2011 concerning our FOIA request:

We submitted a FOIA to the Fed, a Freedom of Information Act request, a formal request of a federal government agency for information. We asked for information on "minority" business contracting. How much money did the Fed spend with women firms (WBEs), minority firms (MBEs) and others? We were really looking for information on their spending patterns or their support of minority-owned banks. We were basically trying to (expand and) complete the data set concerning their support for foreign banks, foreign corporations, domestic corporations..related to the financial crisis.

What we found was that the Fed has not spent a lot of money with women- and minority-owned firms. In response to our Freedom of Information Act request, the Federal Reserve Board provided data on contract awards for the year 2010, broken out by ethnic and by gender designations. We found that, for example, in 2010, the Fed only spent 1.73 percent of their contracting dollars with minority-owned firms and 6.31 percent with women-owned firms. The total amount of money spent was reported to be $113,109,000. This only covers the Board of Governors in Washington, D.C. This does not cover the entire Federal Reserve System.

We are trying to determine how much support was given to minority firms. We sought to compare that to the level of support provided to Goldman Sachs, Merrill Lynch and other financial institutions and corporations as a result of the financial crisis.

http://diversityinc.com/article/8456/Why-Does-the-Fed-Have-So-Little-Supplier-Diversity/

New Law Helps Minority and Women Contractors Land Big Deals

noreply@blogger.com (William Michael Cunningham) — Wed, 06 Jul 2011 14:51:21 PDT

New Law Helps Minority and Women Contractors Land Big Deals.

President Obama signs bill that gives our financial services firms a seat at the table. But is it enough?

See: http://www.blackenterprise.com/2011/07/06/new-law-helps-minority-and-women-contractors-land-big-deals/

Carver Federal Raises $55 million

noreply@blogger.com (William Michael Cunningham) — Wed, 29 Jun 2011 19:54:32 PDT

In a stunning development, Carver Federal today revealed they have raised $55 million in new equity capital. This amount exceeds, by almost three times, "regulatory capital requirements set by the Office of Thrift Supervision (OTS)."

According to the bank, investors include:

The Goldman Sachs Group, Inc., $15 million.
Morgan Stanley, $15 million.
Citigroup Inc., $10 million.
The Prudential Insurance Company of America, $10 million.
American Express Company, $2 million.
First Republic Bank, $2 million.
National Community Investment Fund, $1 million.

Prudential and American Express (full disclosure: former clients) have a 20 year track record of making these types of investments. National Community Investment Fund is a Creative Investment clone, and a bad one at that (we started seven years before they did.)

Which brings us to Goldman, who today "notified the New York State Department of Labor that the investment bank (might) lay off 230 employees." We'll see if they actually lay off people, but the investment in Carver is bound to cause some negative feedback, at least among those 230 people.

Goldman, you'll recall, has a history of investing in black-owned financial institutions: In May, 2009, Goldman Sachs Group Inc. invested $1 billion in a money-market fund managed by (African-American) Williams Capital.

Of course, Goldman has been fined $619.3 million by the SEC for various infractions.

That's 47 times the $15 million invested in Carver.

Family Properties: Race, Real Estate and the Exploitation of Black Urban America

noreply@blogger.com (William Michael Cunningham) — Fri, 24 Jun 2011 19:49:26 PDT

We attended a conference titled "Diversity in Financial Services: The Impact of Dodd-Frank" held from June 22-24, 2011 at the Westin Arlington Gateway, Arlington, VA.

We opened the conference by speaking on a panel covering Dodd/Frank Section 342. Moderating the panel was Mikail Moore, Chief of Staff, Congresswoman Maxine Waters, US House of Representatives. Other panelists were Darlene R. Slaughter, Vice President, Chief Diversity Officer, Fannie Mae and Leslie R. Crawford, Deputy Director, Federal Deposit Insurance Corporation.

The speaker at General Session IV was Beryl Satter, author of Family Properties: Race, Real Estate, and the Exploitation of Black Urban America. She discussed the current state of the mortgage markets and placed recent history in context. Her book is perhaps the best exploration of race and the urban real estate market.

This is a rare and powerful book which combines socioeconomic trends, the history of the civil rights movement and detailed family history. As noted by Ms. Satter, "In the 1950’s, 85% of properties sold to blacks in Chicago were sold on contract (on explotative terms). ..speculators were robbing blacks of $1 million dollars per day."

That’s 365 million per year. At 5% interest rate compounded over 60 years (1950 to 2010), this adds up to $135 BILLION dollars in lost wealth in Chicago's Black community. Multiply this by other urban real estate markets around the country, and the total loss adds up to well over $5 TRILLION dollars.

This explains, completely, the wealth gap between blacks and whites.

White House Community Leaders Briefing

noreply@blogger.com (William Michael Cunningham) — Fri, 17 Jun 2011 17:04:40 PDT

We were fortunate to be invited to today's Community Leaders Briefing at the White House. I found the event informative.

We got a chance to hear from top Administration officials. Among those addressing the meeting were Carl Shapiro, Member, Council of Economic Advisers, Greg Nelson, Deputy Director, White House Office of Public Engagement, Michael Blake, Associate Director, White House Office of Public Engagement, Stephanie Cutter, Assistant to the President and Deputy Senior Adviser, and William Daley, Assistant to the President and Chief of Staff.

Mr. Shapiro described the Administrations' current economic viewpoint and forecast. He cited the deficit, the crisis in Greece and oil prices as challenges. Administration economists are focused on staying engaged and optimistic. They also described several initiatives and facts: the world's largest photovoltaic plant and the world's largest wind farm are both in the US. (I thought they were in China.)

Mr. Daley spoke about deficit reduction plans (as he would, since he is currently negotiating with the Republicans) and about jobs.

Overall, I though the effort a good one. We, for the sake of the country, wish them well.

Technology Commercialization Showcase for Women & Minorities - Yuxi Song, Xiaoxiao Yin, CIR 2011 Interns

noreply@blogger.com (William Michael Cunningham) — Wed, 08 Jun 2011 13:16:50 PDT

We attended the Technology Commercialization Showcase for Women & Minorities this morning, June 8, 2011, at the University of Maryland, College Park.

The event was sponsored by IWIF: "IWIF Workers’ Compensation Insurance has specialized in providing workers’ compensation insurance to Maryland businesses since 1914." IWIF opened the Showcase with a brief introduction about itself and its core business.

Dr. Robert L. Wallace delivered a 30-minute lecture on utilizing strategic partnerships for commercialization success in technology and outlined 12 steps to building a good partnership:

1. Building trust

2. Get your "mogo" working ( mogo means: mission, objectives, goals, opportunity);

3. Maximize client pain IQ;

4. Know thyself ( limitation, strength and value);

5. Know thy partner;

6. 360 review;

7. Embracing the boulder;

8. Determine the alpha project;

9. Remaining independent;

10. Embracing the porcupine;

11. Joint venture continuum;

12. Transition strategies.

Dr. Wallace "co chairs the Commerce Committee for the Maryland/Liberia Sister State Agreement and serves on numerous boards, including the Baltimore Workforce Investment Board, the Tech Council of Maryland, the Kennedy Krieger Institute, and the Baltimore Center Stage Playhouse."

Four panelists gave short presentations about technology transfer. The Showcase ended with a discussion of success stories.

Overall, we found the event very useful and interesting. It opened our minds and generated many ideas about the application of technology in business.

Yuxi Song, Xiaoxiao Yin, CIR Interns and MBA Candidates, 2012, American University Kogod Business School.

Commentary: New law a boon for women- and minority-owned firms

noreply@blogger.com (William Michael Cunningham) — Sun, 05 Jun 2011 15:25:37 PDT

From the Washington Post:

"This may be the best time in recent memory to be a minority- or woman-owned contractor seeking to do business with the federal government."

(Actually, I think I would dial that back a little. With concern over government spending growing, it looks like women and minority firms may be getting to the party just as the food and beverages are running out...unless they are defense contractors.)

"A recent article in Capital Business [“Federal Reserve Bank seeks diversity in contractor pool,” May 16] discussed efforts by the Federal Reserve Bank of Richmond to increase contracting with women- and minority-owned firms. This effort is far broader and more significant than the article indicated, however.

Section 342 of the recently enacted Dodd-Frank Act requires nearly 30 agencies that oversee the financial system, including the Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corp., to establish offices of minority and women inclusion to monitor diversity within their ranks and the pool of contractors who provide goods and services to the government.

One of the most important provisions requires the agencies to examine diversity efforts at the 27,000 financial institutions the 30 agencies regulate. Knowing that they are being watched will spur the financial institutions to hire more minority employees and spend more money with minority contractors."

(Actually, I would word this differently now. Financial institutions will be motivated by marketplace pressures related to a customer base that is increasingly diverse, not by government pressure...)

"The government has yet to determine what the penalties will be for financial institutions that fall short of diversity standards. I suspect it mostly will be shame. The bad list will get wide publicity. Financial institutions’ customer bases are more diverse than they were 20 or 30 years ago, and they don’t want to be seen as lacking a sufficient number of minority and women employees and contractors. Being on the bad list will cost them shareholder value and hurt their ability to recruit and retain employees. No one wants to work for a firm that doesn’t get it.

My opinion is that firms that fall short should be fined. I don’t think that will happen but a fine would impact their long-term behavior."

(Again, to reword slightly, fines are probably not realistic. A more likely penalty will be the loss of contracting opportunities for firms that consistently break the law...)

"Section 342 simply aims to bring players with differing backgrounds into the government contracting marketplace. As businesses compete for contracts, they will provide better goods and services at lower cost.

The effort will be good for women and minority contractors and the government. More competition, ultimately, will save the government — and taxpayers — money."

For the full article, see:

http://www.washingtonpost.com/business/capitalbusiness/commentary-new-law-a-boon-for-women--and-minority-owned-firms/2011/06/01/AGxHCfJH_story.html

40th Anniversary of the Birth of Corporate Social Responsibility (CSR)

noreply@blogger.com (William Michael Cunningham) — Sun, 22 May 2011 12:56:21 PDT

May 18, 2011 – Reverend Leon H. Sullivan, a Baptist minister, African American civil rights leader and economic justice leader/activist joined the Board of Directors of the General Motors Corporation (GM) on March 1, 1971, and was the first African American to hold a Directors seat on a major U.S. Corporate Board.

May 21, 1971 marks the date of the first stockholder's meeting attended by Reverend Sullivan. At that meeting, he challenged GM to leave South Africa until apartheid ended. This set the stage for the integration of U.S. Corporate Boards and for the development of corporate social responsibility (CSR).

Reverend Sullivan “was best known for creating the Sullivan Principles, a set of ethical guidelines later signed by officials from more than 125 US corporations working in South Africa." The principles were one of the first benchmarks used for corporate social responsibility (CSR), and are a methodology still in use today.

His work “illustrates the most fully developed instance of corporate reaction to shareholder pressure. It remains a successful example of corporate activism in support of social justice: U.S. companies responded to anti-apartheid pressure and shareholder' ultimate goal of eliminating apartheid was realized, eventually.”

Reverend Sullivan founded the very first Opportunities Industrialization Center (OIC) in 1964, in an abandoned jailhouse in Philadelphia. The OIC provided job and life skills training and matched its graduates up with the employment needs of Philadelphia businesses. The undertaking was a huge success, and the programs were replicated in cities across the United States. In 1969, OIC International was created to provide employment-training services on a global scale.

In addition to GM, Reverend Sullivan also served on the Board of Directors of Mellon Bank and the Boy Scouts of America.

Please join us on June 14th as we launch a series of webinars on the Reverend Leon H. Sullivan, corporate inclusiveness, diversity and economic justice. We will discuss Reverend Sullivan’s' background and personal history, the impact of the Principles on social ethics, the impact of the Principles on corporate behavior and the effect this effort has on succeeding generations.

Date: June 14, 2011. Time: 11 am.

Where: http://sullivan40th.eventbrite.com

One Black owned Bank that isn't going out of business

noreply@blogger.com (William Michael Cunningham) — Sat, 23 Apr 2011 11:01:21 PDT

According to recent news reports, "North Milwaukee State Bank.. recently commemorated a milestone of providing service to the community for over 40 years."

North Milwaukee State Bank ( now NMSBank ) celebrated "over 40 years of service to the community by hosting a 40 Plus Year Celebration..at the Milwaukee County War Memorial on April 14, 2011. The bank opened its doors on February 12, 1971, becoming Wisconsin’s first minority-owned bank.NMSBank co-founder Dr. William Finlayson states 'I never had any hesitation in opening the bank because I was motivated to bring economic empowerment to the community. People questioned the impact a minority bank would have on the community, but the biggest immediate impact was the sense of pride it gave the community.'

NMSBank co-founder Dr. Randle Pollard credits the success of opening NMSBank to the rapid exit of larger banks from the community, the civil rights movement, and a rush of college graduates who majored in accounting, banking, and finance. 'All three factors made the time right and ripe to establish a bank. It also was an ideal time because all the things the community needed financially, NMSB would be there to provide,' says co-founder Pollard."

Well done, gentlemen. Well done indeed.

Standard & Poor's cut its credit outlook on the US to negative

noreply@blogger.com (William Michael Cunningham) — Mon, 18 Apr 2011 19:12:02 PDT

On Monday, April 18th, Standard and Poors, a Nationally Recognized Statistical Rating Organization (NRSRO), or credit rating agency, cut its credit outlook for the US to negative. We believe this rating opinion unwarranted and inaccurate. To understand why, one must look at credit rating agencies in general, their competence (specifically, their performance prior to the recent financial crisis), and current AAA rated countries.

Lets take that last item first. Here is the list of countries currently rated AAA by S&P:

Australia
Austria
Canada
Denmark
Finland
France
Germany
Guernsey
Hong Kong
Isle of Man
Liechtenstein
Netherlands
New Zealand
Singapore
Sweden
United Kingdom
United States of America

We find it difficult to believe that the Isle of Man and Liechtenstein, countries whose main export appears to be laundered money, will be better future credit risks than the United States of America.

Let's next review what a credit rating agency is, what it does and how it makes money. According to one source, "In the United States, the Securities and Exchange Commission (SEC) permits investment banks and broker-dealers to use credit ratings from 'Nationally Recognized Statistical Rating Organizations' (or 'NRSROs').. for regulatory purposes..SEC regulations require that money market funds (mutual funds that mimic the safety and liquidity of a bank savings deposit, but without FDIC insurance) (hold) only securities with a very high NRSRO rating. Likewise, (banking and) insurance regulators use credit ratings to ascertain the strength of the reserves held by (banks and) insurance companies."

In other words, the SEC, the agency that selects companies that can be recognized as credit rating agencies or use the NRSRO designation, tells institutional investors that they can only hold securities that are rated by these same NRSRO's.

The competence of the credit rating agencies is suspect: they made multiple, serious and significant errors in rating securities issued by Enron, Worldcom, Lehman Brothers, Bear Sterns, and hundreds of others, rating these securities safe until, in many cases, the day before the issuer defaulted. These institutions are supposed to “base their ratings largely on statistical calculations of a borrower's likelihood of default,” but one news report noted that:

“Dozens of current and former rating officials, financial advisers and Wall Street traders and investors interviewed by The Washington Post say the (NRSRO) rating system has proved so dominant they can keep their rating processes secret, force clients to pay higher fees and fend off complaints about their mistakes."

On a positive note, it is our belief that S&P's revised credit outlook can be used as a reason to raise taxes, to specifically repeal the Bush tax cuts.

This is, in our opinion, the most rational way to solve the so-called budget crisis.

Legendary Carver Savings Bank Fights To Stay in Business

noreply@blogger.com (William Michael Cunningham) — Wed, 13 Apr 2011 06:16:56 PDT

"Carver Federal Savings Bank, the financial institution currently holding the top spot on the BE BANKS list, is fighting for its future. The nation's largest black-owned bank must significantly boost capital reserves by month's end or risk a potential shutdown, takeover or sale of the bank.

William Michael Cunningham, social investing adviser at Creative Investment Research Inc., a Washington D.C. firm specializing in minority banking, estimates that Carver Bancorp Inc.,parent of the Harlem-based bank, must raise nearly $20 million in new capital by April 30, 2011, to meet orders by the Office of Thrift Supervision, the primary regulator of all federal and a number of state-chartered savings banks."

Full article at: http://www.blackenterprise.com/2011/04/12/legendary-carver-savings-bank-fights-to-stay-in-business/