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Public Meeting Regarding Citicorp and Travelers Group
Friday, June 26, 1998
Transcript of Panel Twenty-Four


   2               MR. LONEY:  Let me call the last

   3     scheduled panel that we have, Panel

   4     Twenty-four.

   5               Nancy Roberts, Abdul Rahmaan

   6     Muhammad, Joanne Oplustil, Dennis Kremer,

   7     Robert Davenport and Jennifer Adolph Blum.

   8               Thank you all for coming.  We will

   9     start with you, Ms. Roberts.

  10               MS. ROBERTS:  Good morning.  I am

  11     Nancy Roberts, president of the Coordinating

  12     Council for Foundations, a regional association

  13     of more than 80 corporate foundations,

  14     corporate giving programs, independent

  15     foundations, community foundations and

  16     federated funds serving Connecticut.  The

  17     Council's mission is to promote and support

  18     effective philanthropy for the public good in

  19     Connecticut.

  20               As head of the organization that

  21     supports and provides data on and information

  22     about the organized grant-making community in

  23     Connecticut, I am in a position to observe and

  24     comment on the corporate social investment of

  25     Travelers as well as other corporate entities


   2     in the state.

   3               Travelers has historically been an

   4     important contributor to organizations in the

   5     Hartford area that heal, educate, entertain and

   6     inspire -- and its support has been steadfast.

   7               The headquarters community usually

   8     receives the greatest corporate support.

   9     However, after the merger of Travelers and

  10     Primerica, greater Hartford was still the

  11     beneficiary of sizable support from Travelers.

  12               Most recently, within the past four

  13     years, Travelers has provided significant

  14     support through its foundation in the area of

  15     education, from early childhood through college

  16     years.

  17               Let me give you a few examples.

  18               Following the merger with Primerica,

  19     Travelers quickly brought to Hartford the

  20     academy program which had been successfully

  21     provided in other parts of the country.  The

  22     Academy of Finance at Weaver High School not

  23     only became a success story in its own right,

  24     but it provided the model and design that

  25     stimulated the development of other academy


   2     programs supported by other corporations and

   3     the State of Connecticut in the two other high

   4     schools in the City of Hartford.

   5               A three-year commitment to the

   6     Hartford public schools for instrument repair,

   7     replacement and music instruction provided much

   8     needed support to a neglected program for the

   9     cultural enrichment of children in Hartford.

  10               In January 1998, Travelers donated

  11     30,000 square feet of space in their Education

  12     Center to the University of Connecticut for

  13     three years to support business education.  In

  14     addition, they will provide a scholarship fund

  15     and paid internships for high school and

  16     college level students.  This effort

  17     exemplifies Travelers' efforts to link

  18     educational opportunities for students to job

  19     opportunities.

  20               In addition to the above-mentioned

  21     commitments to public education, the Travelers

  22     Foundation contributes to community-based

  23     tutoring, mentoring programs for children and

  24     youth, to cultural and arts programs, to health

  25     programs, totalling more than $1.4 million in


   2     1997 going into the Hartford community.

   3               Matching gifts to educational

   4     institutions has been replaced with a program

   5     which both encourages and rewards employees who

   6     contribute volunteer time to their community.

   7     With all of the downsizing of the number of

   8     employees which has happened in the greater

   9     Hartford area, one of the least discussed but

  10     most strongly felt effects has been the loss of

  11     volunteers to both boards of directors and

  12     direct service in nonprofit organizations.  In

  13     many corporations, employees have not been

  14     encouraged to participate outside of their

  15     workplace.

  16               But Travelers Volunteer Incentive

  17     Program provides a strong message that it is

  18     not only OK to volunteer, but it is important

  19     to give back to the community.  Employees may

  20     request up to $1500 on behalf of the charitable

  21     organizations for which they volunteer, and the

  22     amount received further encourages

  23     participation since grants are based on the

  24     longevity with the organization as well as the

  25     hours of service.  In 1997 over 60 employees


   2     took advantage of this program with an

   3     additional $30,000 contributed to charitable

   4     organizations.

   5               The nonprofit community has also

   6     benefitted from Travelers' generous in-kind

   7     support, including opening its space in the

   8     education center for conferences, programs and

   9     events of community organizations.  One recent

  10     event for which Travelers provided space and

  11     technical assistance and financial support was

  12     the Greater Hartford Area Child Care

  13     Collaborative's Quality Child Care Teacher

  14     Award, which recognized and rewarded the best

  15     early childhood teachers in greater Hartford.

  16               The final area I would like to touch

  17     on is Travelers' support for the civic

  18     infrastructure of the greater Hartford

  19     community.

  20               Travelers has been a founder and key

  21     player in important civic events, including the

  22     Capital Region Growth Council, which was

  23     developed to stimulate economic growth in the

  24     greater Hartford region, and Riverfront

  25     Recapture, an effort to reconnect the Hartford


   2     area towns and cities to the Connecticut River.

   3     Along with the grants from its foundation, the

   4     in-kind and human resources and the civic

   5     efforts support to enhance the quality of life

   6     in the greater Hartford area.

   7               In closing, I would like to reiterate

   8     that in my opinion Travelers has exhibited

   9     ongoing strong commitment to greater Hartford,

  10     and I expect that commitment will continue.

  11               Thank you.

  12               MR. LONEY:  Thank you, Ms. Roberts.

  13               Mr. Muhammad.

  14               MR. MUHAMMAD:  Yes.  My name is Abdul

  15     Rahmaan Muhammad, and I am here in my role as

  16     the senior vice president for Community Support

  17     Services and diversity manager for the Village

  18     for Families and Children.

  19               I am pleased to have this opportunity

  20     to participate on this panel, to provide

  21     information relating to factors the Board is

  22     required to consider under the Bank Holding

  23     Company Act.

  24               I appear before you on behalf of the

  25     Village for Families and Children, Inc.,


   2     located in Hartford, Connecticut, and its

   3     president Mr. William A. Baker.  I express my

   4     appreciation for this opportunity to present

   5     testimony pertaining to the convenience and

   6     needs of the communities to be served.  I will

   7     also briefly address our long and beneficial

   8     relationship with the Travelers.

   9               As one of the oldest human service

  10     agencies in the country, the Village for

  11     Families and Children has been at the forefront

  12     of the development and provision of quality

  13     social and human services.  The Village has

  14     been a key leader in the process of meeting

  15     human needs for more than 185 years.

  16               With a cadre of trained, experienced

  17     and diversity qualified professional and

  18     para-professionals, the Village has been

  19     influential in research, training and service

  20     provision.

  21               Our services range from programs for

  22     infants to the elderly.  We provide outpatient

  23     behavioral and mental health counseling,

  24     special needs adoption services, specialized

  25     foster care services, extended day treatment


   2     and family preservation programs, family

   3     reunification and residential teen transition

   4     programs, teen pregnancy and family housing

   5     alternative services, and advocacy on behalf of

   6     those most needy in our community.

   7               Within the past five years, we have

   8     become increasingly family centered and child

   9     focused.  Working in collaboration with other

  10     affiliations in the community, we have

  11     successfully implemented several school-based

  12     family resource centers.

  13               These programs have become one-stop

  14     shopping centers for comprehensively meeting

  15     family needs and improving the quality of life

  16     by developing community-based resources.

  17               Our services and programs have

  18     positively impacted the lives of thousands of

  19     clients, consumers and customers statewide.

  20     Such cost-effective programs have been made

  21     possible in part due to partnership and support

  22     from the private industry in general and the

  23     Travelers Group in specific.

  24               The Travelers involvement and support

  25     to the Village has been long-standing and


   2     consistent.  For many years they have made the

   3     financial difference in our summer enrichment

   4     programs, as a part of our extended day

   5     treatment program.  This program has provided

   6     services to many children.

   7               In the more recent involvement for

   8     them, the Travelers has funded several projects

   9     in our family resource centers.  Such projects

  10     include, but are not limited to, our computer

  11     lab in the North Hartford Family Resource

  12     Center, parent educator and parent specialist

  13     services and recreational and other services

  14     for children.

  15               With support from Travelers, both

  16     financial and human, we have been able to meet

  17     the needs of children needing tutoring in the

  18     sciences, teens needing mentors, mothers

  19     needing supplies and living space, seniors

  20     needing transportation to services, and

  21     families needing food and gifts for their

  22     children during special observances and holiday

  23     seasons.

  24               Volunteers from the Travelers have

  25     been crucial in improving and enhancing the


   2     program sites for many of our community-based

   3     services.  Not only has the Travelers provided

   4     services at our program sites, they have made

   5     available space at their local offices for

   6     training and community-based programs.  During

   7     a recent annual United Way-sponsored volunteer

   8     program called A Day of Caring, several of the

   9     Travelers volunteers provided a full day of

  10     services to the human service organizations in

  11     the community.

  12               The past long-term partnership

  13     between the Village for Families and Children

  14     and the Travelers, which includes hundreds of

  15     thousands of dollars and staff involvement,

  16     lead us to believe that a bigger and better

  17     Travelers would continue this high quality of

  18     service and support that have been products and

  19     outcomes of the previous years.

  20               Therefore, the Village for Families

  21     and Children would like to go on record as

  22     positively supporting the merger with Citicorp,

  23     possibly leading to the potential for greater

  24     contributions of resources, both financial and

  25     human.  In our estimation, such a situation


   2     would only lead to the potential enhancement of

   3     the human conditions throughout the greater

   4     Hartford area, would lead to volunteer support,

   5     quality service provision and continued

   6     financial support.

   7               Should you have questions, I would be

   8     pleased to address them when they are

   9     appropriately asked.  On the other hand, we

  10     thank you for this opportunity and we express

  11     our appreciation to be here.

  12               MR. LONEY:  Thank you, Mr. Muhammad.

  13               Ms. Oplustil.

  14               MS. OPLUSTIL:  My name is Joanne

  15     Oplustil.  I am the executive director of

  16     CAMBA, a nonprofit agency in the Flatbush

  17     section of Brooklyn, New York.

  18               In 1985 when I took over the agency,

  19     I was the sole employee.  Today we have over

  20     350 employees and we service over 14,000

  21     individuals a year.  The programs that we run

  22     are employment programs, health and aids, youth

  23     business development, microloans, civic

  24     services, homeless and education programs.

  25     We're opening a primary health care center in


   2     1999, day care center in 1999, and we are in

   3     the process of developing housing for special

   4     needs populations, specifically people who are

   5     HIV positive.

   6               Through those years when I started

   7     out, Citibank was always there; and, quite

   8     frankly, if they weren't with me -- certainly I

   9     was by myself for a while -- encouraging and

  10     also giving grants to the agency, we would not

  11     be where we are today.

  12               I think that the merger between

  13     Travelers and Citibank will only benefit

  14     communities such as ours.  In addition to

  15     banking services and assistance that we get --

  16     for instance, we work with many people who are

  17     either on public assistance or who are

  18     immigrant refugees who are not always familiar

  19     with the banking systems.  They don't have

  20     accounts.  They want to cash some checks.  They

  21     don't have the fees.  They are not able to pay

  22     the fees that the banks charge.  We've worked

  23     out with Citibank where many of our low-income

  24     clients are able to open banks or cash checks,

  25     and fees had been either reduced or eliminated.


   2     And we plan to continue to work with Citibank

   3     in this effort, particularly with New York

   4     City's very strong push to get people from

   5     welfare to work.

   6               People who are now going to be

   7     working are going to ultimately need to open

   8     bank accounts.  We are going to need

   9     consumer-friendly bankers who are going to work

  10     with marginal population or low-income who may

  11     not have the resources to pay all the fees

  12     immediately, to assist them with opening

  13     accounts.  That is good business, because

  14     ultimately people who open a small account will

  15     ultimately have larger accounts.

  16               With regard to Travelers, we view

  17     that as positive, because insurance is a very

  18     important component, certainly in the Federal

  19     Reserve.  But in nonprofit agencies you

  20     breathe.  You have a new program, you need new

  21     insurance.  We hope that this merger will

  22     assist us in our insurance needs, educating us

  23     not only nonprofits, but also educating

  24     community members on the needs of insurance,

  25     what insurance is, what it is all about and how


   2     to access insurance, reduced fee insurance.

   3               Our microloans -- you had asked

   4     another question to the other panel about

   5     having intermediaries.  We do microloans.  We

   6     give out up to $5,000 loans.  Banks can't

   7     afford to give out $5,000 loans.  We have been

   8     very successful with working with populations

   9     in giving $5,000 loans, combining them with

  10     other intermediaries to make them either

  11     $10,000 or $15,000 loans, where the businesses

  12     have been turned down, and ultimately will then

  13     go to a Citibank for a larger loan.

  14               So other entities providing loans are

  15     very important, because we are the ones that

  16     will walk them through and ultimately they will

  17     be able to access larger loans from Citibank,

  18     and we have Citibank supporting our microloan

  19     program and all of our other programs.

  20               Thank you.

  21               MR. LONEY:  Thank you.

  22               Mr. Davenport.

  23               MR. DAVENPORT:  Thank you for the

  24     opportunity to speak.  Like Mark Winston

  25     Griffith earlier, I sort of looked at this


   2     opportunity as a no-win situation because our

   3     constituency includes many of the

   4     community-based organizations that have spoken

   5     over the last two days, and some of our

   6     constituency, some of the community-based

   7     organizations have spoken in opposition to the

   8     merger and some of them have spoken in favor of

   9     it.  So whatever I say I am going to make some

  10     enemies as a result of it.

  11               I, like Mark Winston Griffith,

  12     thought it was a marvelous week to take a

  13     vacation.  But in spite of that, I want to

  14     speak in favor of the proposed merger for two

  15     reasons, and I will explain those in a second.

  16               First of all, just a word about NDC,

  17     our organization.  We are one of the nation's

  18     oldest not-for-profit organizations engaged in

  19     community development and housing development.

  20     We started in 1968.  Our founder had worked for

  21     Bobby Kennedy, and when Bobby was shot, he

  22     organized the National Development Council,

  23     founded with a Ford Foundation grant.

  24               In a nutshell, we are finance people.

  25     Our role is to channel capital into low-income


   2     areas in productive ways.  In any given year,

   3     we are working with 100 to 125 community-based

   4     organizations, partnering with them to create

   5     jobs and to stimulate investment, private

   6     sector investment into the low-income

   7     communities.

   8               We own 2,000 units of low-income

   9     housing nationwide.  We have $250 million worth

  10     of direct development experience.  We're the

  11     only nonprofit with what's called a small

  12     business lending license from the SBA, which

  13     entitles us to make SBA-guaranteed loans to

  14     small businesses who invest into low- and

  15     moderate-income areas.

  16               As I said, I want to speak in favor

  17     of the merger for two reasons, and they relate

  18     very much to our experiences with Citibank, and

  19     the first is really what I call attitude.

  20               For 30 years our organization has

  21     known that a major obstacle to the flow of

  22     capital into low-income communities is not the

  23     lack of investment opportunities but the

  24     perception that there is a lack of investment

  25     opportunities.  Our experience has always been


   2     that there are a lot of good business

   3     investment opportunities in low-income

   4     neighborhoods and all we have to do is uncover

   5     them and work to structure the deals.

   6               No bank is perfect.  Citibank is not

   7     perfect.  But our experience with them has been

   8     that they do view their CRA responsibility and

   9     investing in the low- and moderate-income

  10     communities as an opportunity.  It is good

  11     business.  It is an opportunity to employ

  12     capital in a neighborhood.  They are

  13     sophisticated enough to know that it takes hard

  14     underwriting and careful structuring of these

  15     deals, but they don't view it as some burden or

  16     some guilt money.  They have the attitude this

  17     is "can do," and with a little bit of hard work

  18     we can make it work.

  19               That makes them an excellent partner

  20     for our type of development.  They view low-

  21     and moderate-income neighborhoods as equal

  22     partners in the development process.  Because

  23     of this attitude, what they have done with us

  24     is they have become the largest sponsor of our

  25     nationally recognized training for


   2     community-based organizations, teaching them,

   3     bringing the hard development and the hard

   4     financial skills to the community-based

   5     organizations so they have the capacity to do,

   6     to catalyze, their own investments in their own

   7     communities.

   8               We are also funded by HUD and other

   9     large state governments to do this, but

  10     Citibank is the only bank and the largest bank

  11     to support our training activities.  In New

  12     York City Citibank has underwritten directly

  13     100 percent of the cost of bringing this

  14     training to 200 neighborhood-based nonprofits.

  15               Citibank has also engaged us to

  16     survey the neighborhood organizations to

  17     identify new investment opportunities for them,

  18     and they booked a lot of new business as a

  19     result of that.

  20               They have been a major investor in

  21     our $35 million low-income housing tax credit

  22     fund that will, in fact, create $100 million

  23     worth of new low-income housing.

  24               They are the only bank that has

  25     directed us to work with the low-income


   2     populations in Puerto Rico, which is one of the

   3     neediest, and that really is the first reason

   4     why we are in favor of it.

   5               Second reason is we all know, as

   6     Joanne has mentioned before, that while the

   7     financial problems of low-income neighborhoods

   8     goes far beyond the problems of commercial

   9     banks and thrift institutions, it rests to

  10     great degree also with insurance, the ability

  11     to get insurance.  It also rests with the

  12     access to equity capital, which is almost

  13     impossible in a low-income area.

  14               We feel confident that a merged

  15     Citicorp/Travelers will, in fact, create a new

  16     generation of investment vehicles for community

  17     development.  For that reason, we are very much

  18     in favor of the merger.

  19               Thank you.

  20               MR. LONEY:  Thank you, Mr. Davenport.

  21               Ms. Blum.

  22               MS. BLUM:  Good morning.  I am the

  23     director of government relations and

  24     communications at the Brooklyn Chamber of

  25     Commerce.  On behalf of the Brooklyn Chamber of


   2     Commerce, I am pleased to offer this testimony

   3     in support of Citibank and their pending merger

   4     with Travelers.

   5               The Brooklyn Chamber is a nonprofit

   6     membership organization founded in 1918.  This

   7     is our 80th anniversary.  Our mission is to

   8     assist Brooklyn businesses in ways that promote

   9     commerce, stimulate economic growth and improve

  10     the quality of life throughout Brooklyn.  We

  11     serve a diverse borough-wide membership uniting

  12     small and large businesses located throughout

  13     Brooklyn and beyond, and we advocate on behalf

  14     of Brooklyn's 35,000 businesses.

  15               Citibank has been an active Chamber

  16     member for almost half a century.  Currently

  17     two Citibank executives, Jill Kelly and Natalie

  18     Abatemarco, are very active members of our

  19     board of directors.  In fact, almost ten years

  20     ago Jill Kelly was the first woman elected to

  21     our executive committee.

  22               In our view, Brooklyn, New York City

  23     and New York State would be hard-pressed to

  24     find a more community-minded financial

  25     institution.  Citibank has an exemplary record


   2     of community outreach, customer service and

   3     economic and small business development.  The

   4     bank, in our view, is a proven leader in

   5     commercial revitalization and a respected

   6     provider of technical assistance to small

   7     businesses.

   8               Citibank has funded several specific

   9     innovative initiatives at the Brooklyn Chamber.

  10     The bank was an active early and generous

  11     supporter of a program that we called Good

  12     Help.  It is a free employment service created

  13     to fill the needs of small businesses seeking

  14     to hire and retain qualified employees.  At the

  15     same time, unemployed and underemployed

  16     individuals are assisted in finding quality

  17     employment which contributes to the overall

  18     economic growth of Brooklyn.  Good Help works

  19     in conjunction with a citywide network of

  20     nonprofit training and placement agencies to

  21     produce a large pool of job-ready applicants.

  22     We are not aware of any other employment

  23     service or similar program in the city which

  24     focuses on finding employees for small

  25     businesses.


   2               Citibank has also created an exciting

   3     new program run by the Chamber for the

   4     commercial revitalization of failing retail

   5     corridors.  The approach of the Retail Strip

   6     Revitalization initiative combines marketing

   7     assistance, physical improvements and market

   8     analysis to address the decline of traditional

   9     shopping areas whose stores cater to the needs

  10     of nearby residents.

  11               Their decline disrupts the vitality

  12     of otherwise stable and thriving neighborhoods.

  13     Citibank recognizes that retail strips which

  14     lack strong merchant associations, business

  15     improvement districts, local development

  16     corporations, organizations like CAMBA to

  17     advocate on their behalf, coupled with

  18     increased vacancy and increased foot traffic

  19     need target development assistance.  The

  20     commercial industry of Nostrand Avenue between

  21     Avenue W and Avenue Y in Sheepshead Bay is

  22     serving as the pilot project for this

  23     initiative.

  24               Finally, Citibank is a strong

  25     supporter of Brooklyn Goes Global, the


   2     Chamber's international trade service.  The

   3     program's mission is to help businesses create

   4     jobs by increasing overseas sales of

   5     Brooklyn-manufactured goods.  The program helps

   6     more than 90 Brooklyn manufacturers every month

   7     to increase their capacity to export by

   8     providing technical assistance, market research

   9     and aggressive sales generation.

  10               Overseas sales for Brooklyn

  11     manufacturers result in increased product

  12     demand, ensure more stable business growth and

  13     add more needed blue-collar jobs to Brooklyn's

  14     economy.  Brooklyn Goes Global is considered a

  15     model program across the country.

  16               The Brooklyn Chamber supports

  17     Citibank and the merger with Travelers.  We

  18     think the bank has an exemplary record as a

  19     good corporate citizen and an unparalleled

  20     commitment to community development.  We

  21     believe this commitment will continue and grow

  22     if the proposed merger is finalized.

  23               Thank you for your time.

  24               MR. LONEY:  Thank you, Ms. Blum.

  25               Any questions of this group?


   2               MR. ALVAREZ:  I have one question.

   3               Ms. Blum, you mentioned the corridor

   4     revitalization program and you said City was a

   5     strong supporter.  I assume you mean a strong

   6     lender in the revitalization, they lend to

   7     small businesses that are moving into the

   8     corridor.

   9               MS. BLUM:  No.  This is a program

  10     that is just getting underway.  They have

  11     funded us, in conjunction with some government

  12     funding, to hire a consultant to provide

  13     targeted redevelopment assistance to -- we are

  14     starting with one pilot project.  It is not a

  15     lending program.  We have actually hired a

  16     consultant who is going to go in and provide a

  17     well-rounded approach to revitalizing one

  18     certain retail corridor, with hopes that that

  19     approach can be then replicated in other parts

  20     of Brooklyn.

  21               We target areas that don't have

  22     existing merchant associations, businesses, at

  23     least, or other groups to do that type of work.

  24               MR. ALVAREZ:  Thank you.

  25               MR. LONEY:  Barbara.


   2               MS. KENT:  Did you choose that

   3     Sheepshead Bay/Nostrand Avenue area or the bank

   4     chose it?

   5               MS. BLUM:  It was really a joint

   6     decision between the Brooklyn Chamber, Citibank

   7     and the office of the Brooklyn Borough

   8     President.  We thought it provided a perfect

   9     example of the kind of area we wanted to help,

  10     that is, a corridor that was suffering from

  11     increased vacancies, decreased foot traffic,

  12     but yet was a vital shopping district for a

  13     relatively large community of residents.

  14               MR. LONEY:  Well, thank you very much

  15     for coming in.

  16               We are going to take a ten-minute

  17     break before we start the open session.  Come

  18     back at 10 after 12, please.


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