Public Meeting Regarding Citicorp and Travelers Group
Friday, June 26, 1998
Transcript of Panel Twenty-Five
|
Public Meeting Regarding Citicorp and Travelers Group |
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20 MR. LONEY: Before we start the open
21 session, I would like to again claim the
22 prerogative of the chair for just a brief
23 moment, and I would like to thank personally,
24 and I think on behalf of the panel, the folks
25 from the Federal Reserve Bank of New York who
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2 have made this two days, day and a half, such a
3 seemless effort.
4 When something goes off as well as
5 this, you know there has been a lot of hard
6 work put in and good work put in. As the lady
7 said before, it's good to be able to sleep.
8 Well, this has been a great aid to us and helps
9 me relax an awful lot over the last day and a
10 half of the work that's been done here and the
11 results of that work. So for those of you out
12 there and back here, thank you very much.
13 We have some people who have asked to
14 speak on the open mike. We have a panel of six
15 that we have put together; actually, one person
16 is here that was scheduled from an earlier
17 session and we have just added him to the
18 panel.
19 The people are Gerry Vazquez, Amos
20 Brown, Charles Siegel, Pam Martens, Galen
21 Sherwin and Carol Lin.
22 Since Ms. Martens, Ms. Sherwin and
23 Ms. Lin want to go together, why don't we start
24 with the other three, and you folks can have
25 the final three places, if that is OK.
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2 I will start with Mr. Vazquez.
3 MR. VAZQUEZ: Thank you. My name is
4 Gerry Vazquez and I am executive president of
5 New Visions for Public Schools. New Visions
6 appreciates the opportunity to state our
7 support for the proposed merger of Citibank and
8 the Travelers Group and, more specifically, can
9 inform you of the generous support both
10 corporations have provided to New Visions.
11 Citibank and the Travelers Group have
12 demonstrated sustained commitment to community
13 and educational initiatives. A merger of these
14 institutions will only fortify our capacity to
15 effect change.
16 Founded in 1989, New Visions for
17 Public Schools is a not-for-profit organization
18 that works with the New York City public school
19 system, the private sector and the community to
20 mobilize resources and develop programs and
21 policies that lead to significant, lasting
22 improvements in the achievement of all
23 children.
24 Since 1990, Citibank has contributed
25 a total of $214,000 to New Visions, supporting
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2 our efforts in a number of ways.
3 The Citibank Success Fund Awards
4 program recognized exemplary teachers and
5 principals with monetary awards for the winners
6 and the winners' schools. The Citibank Success
7 Fund Awards were presented in an impressive
8 award ceremony attended by invited guests that
9 included an array of major community and
10 education leaders. The awards consistently
11 received favorable and extensive press coverage
12 and brought to these educators an all-too-rare
13 public acknowledgement and appreciation of
14 their gifts and dedication.
15 Citibank helped to start a Tech Corps
16 of students who learned how to repair
17 technology and did so in schools as part of
18 their community service project. Currently,
19 Citibank is sponsoring the Citibank College
20 Bound Program, which provides a comprehensive
21 array of supports to disadvantaged city
22 students who want to go to college. These
23 students are often the first in their families
24 to finish high school.
25 Citibank's money enables students to
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2 learn about college appropriate to their career
3 plans and to visit them, to receive preparation
4 for the SATs and to get help with college
5 applications. This assistance is often what
6 makes a difference in the students' ability to
7 navigate the complex process of college
8 selection and admissions successfully and to
9 achieve access to higher education.
10 The Travelers Group has provided
11 $115,000 in major support for New Visions'
12 Early Childhood Initiative, a program that
13 combines in the same classroom children of all
14 abilities, including those with disabilities.
15 Operating in a range of city public schools
16 representing different family incomes and
17 backgrounds, this initiative is demonstrating
18 its viability as a model for diverse urban
19 communities by making it possible for students
20 of all abilities to successfully learn and
21 excel together.
22 The Travelers Group is to be
23 commended for its readiness to invest in the
24 Early Childhood Initiative. This highly
25 innovative program breaks new ground in
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2 bringing together diverse groups of children,
3 maximizing their strengths and unique
4 contributions and achieving great benefits for
5 each child.
6 Our relationships with Citibank and
7 the Travelers Group have been truly excellent.
8 They support public education in our work and
9 we believe this support will continue in the
10 years ahead. They have demonstrated that
11 excellence in public schools is a priority
12 among the city's private sector leaders.
13 In summary, we are strongly in favor
14 of the merger based on our own involvement with
15 Citibank and the Travelers Group and their
16 clear concern for serving the needs of our
17 communities, our children and our city's
18 future.
19 Thank you.
20 MR. LONEY: Thank you, Mr. Vazquez.
21 Perhaps I should repeat for those of
22 you who are here, and may not have been here
23 when I said it earlier in the day, the way we
24 are conducting this meeting is that each person
25 will be given five minutes to speak. The
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2 timekeeper is sitting in the front row in the
3 middle. We will give you a two-minute warning
4 and then we will indicate that the time is up.
5 If you have written material, for
6 example, whether or not you get to finish it,
7 if in fact you don't get to finish what you
8 brought to say, we would appreciate it if you
9 would give us a copy of your written material.
10 Leave it with the registration desk folks out
11 front and the entire thing will be put into the
12 record.
13 The transcripts will be available in
14 a few days from the Federal Reserve Bank of New
15 York and also the transcripts will be on the
16 Board's Internet web site.
17 With that, let me turn to Mr. Brown.
18 MR. BROWN: Thank you, Mr. Chair,
19 members of the panel. I am Amos Brown, pastor
20 of the Third Baptist Church of San Francisco
21 and also member of the board of supervisors.
22 I have come all the way across the
23 country today representing the National
24 Association for the Advancement for Colored
25 People of San Francisco and also for a
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2 resolution, because the board of supervisors of
3 San Francisco is expressing its concern, over
4 one particular piece of real estate that
5 Citicorp now has the mortgage for in San
6 Francisco that is now up for bidding and
7 ultimately for sale.
8 I come today to share a profound
9 reality of half of the American community in
10 San Francisco and a great measure of the
11 African-American community in this nation. I
12 would like to couch my statement in a vignette
13 from the life of the late Dr. Vernon Johns, the
14 predecessor of Martin Luther King, Jr., at
15 Dexter Church in Montgomery. He said one day
16 that if you want to see a real case of
17 perpetual motion, sell a Cadillac car to a
18 Negro and tell him to park it somewhere.
19 Real estate is something that we have
20 not been able to come by as a people,
21 particularly in San Francisco and in general in
22 this nation. And it is our considered judgment
23 that in great measure, though Citicorp has done
24 much good in terms of supporting educational
25 enterprises and other social action projects,
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2 but in terms of making loans available to
3 African-Americans to purchase a home, to do a
4 development in the city and county of San
5 Francisco, Citicorp has not given a mortgage to
6 one African-American development.
7 The development now under question,
8 the Fillmore Center that is up for bidding, for
9 sale. The previous owner was not
10 African-American. However, a minority group
11 representing an Asian and African-American
12 sought to get involved in the bidding process,
13 and the record reveals that the process was
14 problematic. It was not fair, in their
15 estimation, and these minorities were not given
16 an opportunity to get involved in the bidding
17 process, even though they had the money, they
18 had the financing, they had the sensible
19 support to consummate this purchase.
20 I feel that, though I repeat Citicorp
21 has done a lot of good, but in terms of making
22 loans available to black people so that they
23 may get out of this posture of perpetual motion
24 of buying a car and not having to park
25 anywhere, Citicorp has not contributed to our
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2 having a place to park and to lay our heads in
3 the city and county of San Francisco.
4 For that reason, we have great
5 reservations about this merger, for we do not
6 see the kind of track record in the city and
7 county of San Francisco that would suggest that
8 this bank is friendly toward African-Americans
9 and other minorities in the acquisition of
10 property through mortgages coming through the
11 bank.
12 Thank you very much.
13 MR. LONEY: Thank you, Mr. Brown.
14 Mr. Siegel.
15 MR. SIEGEL: I'm testifying on a
16 power of attorney for Mahesh Shah. I will
17 submit the original power of attorney when I
18 submit the papers inside. It is only eleven
19 lines, but I'd like you to listen carefully to
20 it because it is something that has been an
21 ongoing problem for a couple of years.
22 The letter is addressed to you,
23 Mr. Loney, concerning this meeting, and here
24 Mr. Shah has a question:
25 Will the proposed acquisition cause
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2 the managerial resources of Travelers to reform
3 and correct what appears to be Citibank's
4 obstruction of justice by failing from December
5 1995 through June 25, 1998, almost two and one
6 half years since my attorney -- speaking for
7 Mr. Shah -- and the attorneys for Citibank
8 North America, Zeichner Ellman & Krause, signed
9 on November 16, 1995 a contractual stipulation
10 settlement agreement to provide in lieu of the
11 information subpoena and to discontinue the
12 contempt of court action against a vice
13 president of Citibank, certain information.
14 Attached herewith is a copy of my attorney's
15 letter of May 28, 1996 and an updated copy of
16 same dated June 25, 1998 showing their failure
17 to furnish the contractually agreed information
18 despite the fact that subpoena duces tecums
19 were properly served in the courts with the
20 aforementioned agreement.
21 I have been unable to proceed to
22 collect my judgment of January 20, 1995 in the
23 amount of $11,241 because I have effectively
24 been denied the opportunity to recover my loss
25 because of Citibank's failure. Respectfully
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2 submitted, Mahesh Shah.
3 Thank you.
4 MR. LONEY: Thank you.
5 Ms. Martens.
6 MS. MARTENS: I'm Pamela Martens. I
7 am the lead plaintiff in the infamous "Boom
8 Boom Room" suit against Smith Barney.
9 It is amazing how soon we forget. It
10 was just 60 years ago that 4,835 of America's
11 banks went broke and closed their doors,
12 leaving shareholders and depositors destitute.
13 The underlying reason that this happened was
14 the lack of moral courage by our regulators and
15 elected representatives to just say no to
16 powerful money interests. Instead of just
17 saying no, Washington handed the banks the
18 equivalent of an ATM card to the Feds discount
19 window to speculate in stocks. At a time when
20 Japan, the second largest industrialized
21 nation, is reliving the 1930s in America,
22 complete with banking insolvency, it is amazing
23 and preposterous that we should be discussing
24 rolling back Glass-Steagll.
25 We also want to remember that the
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2 political dynamics that created the backdrop
3 for the banking meltdown in the '30s grew from
4 a corrupt cozy culture between Wall Street and
5 Washington. U.S. Supreme Court Justice William
6 O. Douglas, who knew a thing or two about the
7 matter, having just served as chairman of the
8 young, new SEC, before he went to the Supreme
9 Court, he called it what it was, chicanery and
10 corruption.
11 Frank Vanderlip, coincidentally, an
12 actual former president of National Citibank,
13 wrote in the Saturday Evening Post at the time
14 that lack separation of banking and securities
15 contributed to the stock market losing 90
16 percent -- I'd like to repeat that, 90
17 percent -- of its value from 1929 to 1933.
18 The public was so sickened by the
19 hubris and corruption that an entire generation
20 stayed away from the stock market. It was not
21 until 1954, 25 years later, that Wall Street
22 once again reached the level it had set in
23 1929.
24 There is a compelling body of
25 evidence that suggests a corrupt cozy culture
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2 has once again enveloped the brains of
3 Washington. We can hardly look to the
4 safekeepers of the public trust when they are
5 falling over themselves to reap campaign
6 windfalls from Wall Street.
7 Washington and regulators are quick
8 to criticize moral hazard when it is on foreign
9 shores. Let's look at the moral hazard
10 incubating at Travelers and Smith Barney.
11 In 1996, when the SEC and the Justice
12 Department found that Smith Barney was one of
13 24 firms fleecing their own customers through
14 six or more years of price fixing, no one went
15 to jail. Within the last two years when a
16 special prosecutor found that Smith Barney had
17 bribed the former U.S. agricultural secretary,
18 again, no one went to jail.
19 The firm is currently under
20 investigation by various municipalities for the
21 fraudulent markup of treasury securities, and
22 that, in fact, is enough to hold up this
23 merger, since a criminal charge against a
24 primary dealer of treasury securities would
25 lend its taint to one of America's major money
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2 center banks.
3 Finally, as an eleven-year employee
4 of Smith Barney and the lead plaintiff in the
5 "Boom Boom" lawsuit, I can personally attest
6 that the model espoused by Sanford Weill and
7 James Diamond is nothing we would want to
8 replicate at a money center bank or at a firm
9 employing 160,000 people.
10 As our suit lays out, women at Smith
11 Barney were called witches and whores; were
12 sexually and physically assaulted during the
13 workday on the premises of Smith Barney; we
14 were subjected to vulgar, bigoted and racist
15 language. These charges have come from
16 branches coast to coast.
17 Smith Barney's answer to this suit,
18 just as it answered the charges of price fixing
19 and bribing and yield burning is deny, deny,
20 and spend more money on political campaigns,
21 charitable contributions and TV ads to do spin
22 control.
23 Thank you.
24 MR. LONEY: Thank you.
25 Ms. Sherwin.
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2 MS. SHERWIN: Thank you. My name is
3 Galen Sherwin. I am the president of the New
4 York City Chapter of the National Organization
5 for Women.
6 Two years ago the National
7 Organization for Women named Smith Barney a
8 merchant of shame for its disgraceful
9 employment practices in hiring and promoting
10 women and minorities in disparate pay between
11 men and women employees and in its nonexistent
12 response to the hostile work environment and
13 retribution faced by those who brought sexual
14 harassment complaints.
15 The sexual harassment case Martens v.
16 Smith Barney gave notoriety for its "Boom Boom
17 Room," which you just heard some of the detail
18 from Pamela Martens. These were egregious
19 cases of sexual harassment, horrible conditions
20 across the country that employees of Smith
21 Barney were forced to work under. It has
22 grown, as she mentioned, to include plaintiffs
23 from eleven states across the country.
24 Now, you may say what does it matter,
25 all corporations face litigation during their
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2 regular business. I'm here to say that Martens
3 v. Smith Barney does matter. It matters
4 because it goes to the heart of our civil
5 rights under the Civil Rights Act, particularly
6 Title VII and the Equal Pay Act, it also goes
7 to the heart of the potential for growth and
8 success of women and minorities in the
9 workplace.
10 Now I'm speaking particularly about
11 an employment practice that is widespread in
12 the industry, mandatory arbitration. Mandatory
13 arbitration, as you probably knows, removes
14 from employees the possibility of going to the
15 courts and forces them instead, in employment
16 disputes or sexual harassment or discrimination
17 complaints, to go to an industry-wide
18 arbitration panel.
19 NOW believes that arbitration works
20 to the particular detriment of women and
21 minorities in the workplace, and we have taken
22 a very strong position, passing national
23 resolutions calling for an end to mandatory
24 arbitration and alternate dispute resolution
25 processes. We believe not only does it deprive
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2 women and minorities of the rights and
3 protections that they would enjoy under Title
4 VII of the Civil Rights Act and in our court
5 system, it also is a private system of justice
6 that is stacked in favor of the employer and
7 against the employer plaintiff.
8 Many of the members of these
9 panels -- most of the members of the panels are
10 picked from the industry itself. They are
11 people with long, established careers in the
12 industry, which means that they are necessarily
13 more often successful white men and none of
14 them have any particular expertise in hearing
15 Title VII claims or Equal Pay Act claims. They
16 are just not qualified to be deciding sexual
17 harassment and discrimination complaints.
18 These private systems of justice must
19 be abolished. It is a widespread practice, but
20 it is actually an evolving area of law and
21 policy right now. It is under statutory
22 reinterpretation by the courts across the
23 country, and it is leading to a significant
24 change in policies, in part because of outcry
25 from members of civil rights groups and
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2 feminist groups across the country.
3 Now this is evidenced by the SEC's
4 recent decision this week to approve the NASD
5 recommendation, which is supported by the EEOC,
6 that arbitration is not an appropriate forum
7 for resolution of sexual harassment and
8 discrimination cases, for the reasons I
9 mentioned before.
10 Now this is also a moment of
11 particular opportunity for us because of the
12 recent decision yesterday by Justice Constance
13 Baker Motley, who was presiding over the case
14 Martens v. Smith Barney. She has rejected the
15 settlement that was negotiated between class
16 counsel and the attorneys for Smith Barney and
17 she has raised concerns, some of which I
18 mentioned, about arbitration being the sole
19 remedy for plaintiffs and claimants in that
20 case. She's also raised serious concerns about
21 the diversity program, the effectiveness of the
22 diversity program that has been proposed by
23 Smith Barney.
24 Now this rejection of the settlement
25 gives us an opportunity to make some serious
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2 improvements, if there is going to be a
3 settlement in this case. I would like to read
4 those for the record. The recommendations that
5 NOW New York City is making are the following:
6 That Smith Barney/Travelers remove the
7 requirement that its employees take
8 discrimination and harassment complaints to
9 industry-wide arbitration; that no new
10 settlement be approved unless there is clear
11 provision that all claimants have a right to go
12 to the court or through arbitration; that there
13 be clear provision that all decisions rendered
14 through arbitration have the right to an appeal
15 in court; and that the court maintain
16 jurisdiction over any consent decree; that the
17 diversity program in question be improved and
18 expanded to include meaningful and ongoing new
19 initiatives without a time limit or cap; and
20 that funding be substantially increased to meet
21 the needs of such a large firm; and that
22 diversity training extend to include issues of
23 racisms impact on financing practices that act
24 to the detriment of African-Americans and other
25 minority groups; that procedural hurdles within
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2 any designated dispute resolution process, such
3 as limitations on powers of deposition or
4 subpoena, be removed and all due process
5 protections for complainants that would apply
6 in Title VII suits be respected; and, finally,
7 that the current structure of legal fees and
8 awards be reexamined to ensure both vigorous
9 prosecution and increased equity in
10 remuneration between attorneys and plaintiffs.
11 According to the standards accepted in the
12 industry, attorneys' fees should be capped at
13 no more than 33.3 percent of the total award.
14 (Continued on next page)
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2 Now from what I've heard about
3 Citicorp's practices, the merger between Smith
4 Barney, Travelers and Citicorp would amount to
5 a marriage of two isms, racism and sexism.
6 At a time of such opportunity and
7 change do we want a company that has reaffirmed
8 its commitment to mandatory arbitration for all
9 employees, and that invests on doing business
10 the old fashioned way, to begin and even, to
11 gain even more control over the direction of
12 employment policies and practices?
13 Do we want to allow a merchant of
14 shame to grow into a bloated corporate tyrant?
15 The answer is no.
16 This merger cannot be considered
17 until Smith Barney removes mandatory
18 arbitration requirements and resolves issues of
19 diversity, employment policies and work
20 environment satisfactorily. I strongly urge
21 you to reject this merger. To do any less,
22 would amount to and admission on the part of
23 the Federal Reserve Bank that it does not care
24 about the advancement of women and minorities
25 in the work place or the protections offered by
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2 our courts, and that the profit of corporate
3 giants outweighs civil rights. Thank you.
4 MR. LONEY: Thank you, Ms. Lin.
5 MS. LIN: Good afternoon. My name is
6 Karen Lin I'm here to represent State Senator
7 Catherine Abate who represents the 27th
8 District in New York which covers midtown
9 Manhattan, and most of lower Manhattan as well.
10 She has prepared a release which I
11 would like to read to you now briefly if I may.
12 In the wake of the federal judge's
13 decision to reject the settlement of Smith
14 Barney's sexual harassment suit, Senator Abate
15 joined with advocates to underscore the need to
16 ban mandatory predispute arbitration clauses in
17 employment contracts as a condition to
18 employment.
19 "All parties should use this
20 opportunity to create a dispute resolution
21 system that is fair for workers. Any system
22 that requires employees to give up their right
23 to a day in court as a condition of employment
24 is ultimately unfair and unconstitutional."
25 Senator Abate has found that the
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2 American Arbitration Association, the nation's
3 largest arbitration trade association, says
4 that companies they provide arbitration for
5 encompasses nearly four million employees.
6 About 40 percent of companies who use
7 arbitration force their employees to sign
8 mandatory arbitration contracts. This is
9 according to the federal General Accounting
10 Office. Also, according to the federal GAO,
11 more than half of all employees may be bound by
12 mandatory arbitration contracts by 2001.
13 Having saturated the securities
14 industry, mandatory arbitration is now
15 spreading rapidly into almost all other
16 occupations.
17 Senator Abate has introduced
18 legislation that will ban mandatory arbitration
19 in employment contracts as a condition to
20 employment.
21 "No New Yorker should have to check
22 his or her civil rights at the door in order to
23 get a job." This legislation, The Employee
24 Civil Rights Protection Act will end this
25 discriminatory practice and start to level the
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2 playing field between employer and employee.
3 Thank you.
4 MR. LONEY: Thank you. Do we have
5 any questions of this panel?
6 MR. ALVAREZ: Yes, I have a couple of
7 questions.
8 Mr. Brown, you made a couple of
9 statements that I'd like to ask you some
10 questions about.
11 One is you said Citi has not given
12 any mortgages to any housing development
13 programs in San Francisco. Did I understand
14 that correctly?
15 MR. BROWN: No, I said black and/or
16 minority.
17 MR. ALVAREZ: Was that statement
18 about single-family lending or multifamilly
19 lending? I wasn't sure what you meant by
20 housing.
21 MR. BROWN: Well, the record in
22 single-family dwellings is much to be desired,
23 but in terms of multifamily-dwellings the
24 record is zero.
25 MR. ALVAREZ: You mentioned that you
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2 were talking about property that Citicorp has
3 that apparently --
4 MR. BROWN: Citicorp was one of the
5 original banks that financed this development,
6 about 1100 units, town houses and towers. The
7 bonds were sold by the city to help this
8 development in 1980 when it was begun, but when
9 it had gone through two owners and it was put
10 on the market, the minority groups got together
11 with all of the needed financing to purchase,
12 and the bidding process was very unfair.
13 MR. ALVAREZ: It was unfair in what
14 respect?
15 MR. BROWN: In terms of number one,
16 they did not receive notice regarding the
17 process; number two, there was a lot of basic
18 information that they did not get, and number
19 three, is just the basic concern of the
20 community and in terms of the Community
21 Reinvestment Act, Citicorp should have had
22 serious conversations with this black minority
23 developer to purchase this property that's
24 right in the redevelopment area.
25 Also, the minority group has made the
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2 commitment to rent control, something that is
3 desperately needed in San Francisco, and you
4 look at the number of African-Americans who
5 lodge in that city is unconscionable. In 1970s
6 we lost over twenty thousand African-Americans
7 in the City of San Francisco. 1970, the
8 population was 30 percent and knocked down to
9 17 percent and this has happened principally
10 because of gentrification, blacks or
11 African-Americans have not been able to get
12 mortgages and they have not been able to do
13 developments to the needs of that community.
14 And that's where we are coming from.
15
16 Morally, if the bank is concerned
17 about helping communities, this is a golden
18 opportunity for it to help a minority
19 community, and while we appreciate free
20 enterprise system and we know that all
21 financial deals must be sound, but something is
22 wrong in Denmark when blacks and other
23 minorities step to the plate and they are not
24 given the opportunity to fulfill their dream
25 and their hopes of owning real estate.
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2 MR. ALVAREZ: Thank you very much.
3 Ms. Martens or Ms. Lin or Ms. Sherwin, any of
4 you, you've spoken about mandatory arbitration.
5 I'm not sure I understand the facts. Most
6 folks that have a sexual harassment or other
7 kind of claim can go to the EEOC and the courts
8 and have that claim heard.
9 You say that at Smith Barney and
10 other places there is a requirement as
11 precondition to employment that you waive the
12 right to go to court and that all things be
13 settled in arbitration?
14 MS. SHERWIN: That's correct.
15 MR. ALVAREZ: Then no appeal to the
16 Court after arbitration?
17 MS. SHERWIN: Yes, it's the sole
18 remedy. According to industry regulations many
19 people are forced to sign a form B4. It is
20 also industry-wide. There's also requirements
21 in individual corporations that are internal
22 documents, agreements that are signed as a
23 precondition of employment, and that is so at
24 Smith Barney, and Smith Barney even in light of
25 the recent developments of this case, this
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2 sexual harassment case, recently reaffirmed its
3 policy of having all employees sign an internal
4 document signing away their right to go to
5 court and making arbitration their sole remedy.
6 MR. LONEY: Do you know if that goes
7 beyond Smith Barney within the Travelers Group?
8 MS. MARTENS: Precisely. Travelers
9 had the identical policy and I just want to
10 comment on that we're not talking about a
11 mutual forum. We're not talking about a fair
12 forum. One of the cornerstones of this would
13 be one of the scariest things I'd ever want to
14 imagine in America is that as the money and
15 power has grown at Smith Barney and Travelers,
16 Sanford Weil and James Diamond truly believe
17 they are above the law, and they have passed
18 down this attitude to their teams of corporate
19 attorneys.
20 For example, recently in one of the
21 arbitrations it was Mendez v. Shearson, but it
22 was tried by Smith Barney's attorneys. The
23 appellate court in Texas overturned the
24 arbitration decision because they quoted from
25 Smith Barney's attorneys closing arguments. It
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2 was a wage discrimination -- I'm sorry -- a
3 failure to pay overtime case, and the attorney
4 told the arbitrators, "we are telling you that
5 this is a bad law and you are to ignore this
6 law."
7 Now, as outrageous as this sounds, I
8 beg you to get a copy of that appellate
9 decision and read the outrageous demands that
10 Smith Barney's attorneys were giving to the
11 arbitrators. Even more shocking, the
12 arbitrators followed the demand from Smith
13 Barney necessitating that this go to an
14 appellate court.
15 This type of language has actually
16 now been put into the mandatory arbitration
17 agreement that they have forced their employees
18 to sign, and sign a receipt that they
19 understood that they were waiving their Title
20 VII, their harassment, discrimination, wage,
21 ERISA, race claims, and that arbitrators would
22 not be allowed to follow other law, but would
23 be required to follow "Smith Barney's lawful
24 business judgment." Apparently, Smith Barney's
25 lawful business judgment is that it is above
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2 the laws of America.
3 MR. LONEY: Thank you. Any other
4 questions? If not, I will thank the panel for
5 coming.
6 We have one other person who was
7 scheduled to testify earlier who has requested
8 time in the open microphone session, Lloyd
9 Williams.
10 MR. WILLIAMS: Thank you very much,
11 Mr. Chairman. My name is Lloyd Williams. I
12 serve as the President of the Greater Harlem
13 Chamber of Commerce, a business, civic and
14 trade organization celebrating its 102d year of
15 existence in the City of New York.
16 I just wanted to make brief comments.
17 One, listening to the comments of the National
18 Organization of Women as it relates to the
19 Martin v. Smith Barney matter, I want to go on
20 record as being very much in support of the
21 position of NOW, and other interested parties
22 in condemning the charges against Smith Barney,
23 and further, that we believe that too many of
24 the charges are in fact with substance.
25 Moving to the next point, the
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2 relationship of the merger proposed between
3 Travelers and Citicorp, the Greater Harlem
4 Chamber of Commerce wishes to go on record as
5 being supportive of that merger. It is our
6 view that Citicorp, particularly over the past
7 five years, has become more in tune certainly
8 in New York City with the needs of the sectors
9 of New York that are too frequently called the
10 outer boroughs, the four boroughs outside of
11 Manhattan and certainly sections in Manhattan
12 that are not in the midtown area, including the
13 Greater Harlem area.
14 Over the past five years Citibank
15 which had not been a leader in development in
16 that area, has stepped to the plate, and has
17 been in the forefront of student loans,
18 mortgage loans, business loans.
19 I should also note that Citibank is
20 opening in the central Harlem area on the
21 Frederick Douglas Boulevard between West 134th
22 and West 135th Street, the first Citibank loan
23 office that will open in August of this year,
24 that will provide specific loan information,
25 technical assistance and, in fact, direct loans
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2 to medium and small business sectors as well as
3 to homeowners.
4 We're very pleased that this is
5 taking place. It is going to be a model
6 project that we hope will be emulated
7 throughout not only the city, but far beyond.
8 In addition, I wanted to further make
9 particular note that there are some
10 distinguished persons at Citibank that I would
11 like to have their names recorded because of
12 their leadership. Mr. Hector Ramirez, and
13 Mr. Capocasanda, Ms. Bonnie Walsh, Mr. Allen
14 Stevens, and Mr. Darryl Dodson. It's a group
15 of women and men, different ethnic backgrounds,
16 different nationalities, that have come
17 together to serve the interest of our community
18 and in my view of the city.
19 The goals and objectives of our
20 service area which includes investments,
21 development, loans, Citibank has been
22 supportive of, and we would hope that by this
23 merger Travelers will join with the leadership
24 that is coming out of Citibank.
25 So without delaying your time
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2 further, we wanted to make sure that we did go
3 on record in supporting this merger,
4 encouraging you to give it all due
5 consideration, and, lastly, to commend Citibank
6 for the leadership it has provided in the past
7 years, and to encourage Citibank and Travelers
8 that through this merger hopefully they will be
9 able to provide more for those who have, as
10 well as for those who do not. I'd like to
11 thank you.
12 MR. LONEY: Thank you, Mr. Williams.
13 MR. ALVAREZ: Sir, Mr. Williams,
14 could I ask you a question?
15 MR. WILLIAMS: You absolutely can.
16 MR. ALVAREZ: You mentioned a loan
17 office would be opening. Could you state again
18 the location of that?
19 MR. WILLIAMS: Yes, it's on Frederick
20 Douglas Boulevard which is Eighth Avenue. It's
21 between 134th Street and 135th Street in the
22 Central Harlem area by City College.
23 MR. ALVAREZ: Someone had testified
24 earlier about that being a full-service branch.
25 Do you know for --
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2 MR. WILLIAMS: No, there are two
3 things that are happening. That is not a
4 full-service bank, I know that absolutely for
5 sure, but in addition to that, directly across
6 the street there is a construction of a 170
7 unit condominium project 14 stories high with
8 48,000 square feet of commercial space and
9 underground parking for 140 automobiles.
10 Citibank is putting in a full-service
11 unit in that location across the street that
12 will be a combination of high tech as well as
13 persons directly servicing the interests of
14 that area, and, in addition, Citibank is the
15 lead financial bank for the construction of the
16 project.
17 MR. HODGETTS: Two separate
18 facilities across the street from each other?
19 MR. WILLIAMS: Right. And the new
20 construction would begin, I would believe,
21 September or October, and will take
22 approximately 18 to 20 months to finish, but
23 rather than wait for that to happen, Citibank
24 has opened this loan store across the street
25 and they will be in operation by August of this
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2 year.
3 MR. HODGETTS: Thank you.
4 MR. WILLIAMS: Thank you.
5 MR. LONEY: Did we have any more
6 people who have registered to testify? No
7 more. Does anybody else in the audience wish
8 to?
9 If not, we will adjourn these
10 proceedings.
11 Thank you very much.
12 (Adjourned)
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