Public Meeting Regarding Citicorp and Travelers Group
Thursday, June 25, 1998
Transcript of Panel Fifteen
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10 MR. LONEY: Do we have any questions
11 of this group? If not, I will thank you all
12 very much for coming.
13 We are going to do a little more
14 agenda shifting.
15 James Wyche and Lydia Tom from Panel
16 Fourteen have arrived, and, also, Douglas
17 Warens from the Sixteenth Panel is here, too,
18 and we have room. So if you would like to come
19 up now, that would be good.
20 (Continued on next page)
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2 MR. LONEY: Mr. Wyche, are you ready?
3 MR. WYCHE: Sure, I am. Good
4 afternoon. I'm pleased to be present and to be
5 part of the testimony and support of the merger
6 for Citibank and Travelers Corp.
7 I represent an organization called
8 the Leadership Alliance. As executive director
9 I forged this alliance of 25 which are
10 represented by the eight Ivy League
11 institutions, the ten historic black colleges
12 there are three Hispanic serving colleges as
13 well as the seven tribal colleges in Montana
14 associated with Montana State University. This
15 is an educational alliance that was formed back
16 in 1992, and I'm pleased to tell you a part of
17 the story, because Citibank was our first
18 corporate sponsor.
19 This organization was formed with the
20 ideal of trying to reach toward under
21 representation, specifically with
22 African-American students, with Hispanic-Latino
23 students, with Native American students, and to
24 try to bring them through the process of our
25 educational system, to get them into the
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2 terminal degree process, but, more importantly,
3 to set up a monitorship program, to set up a
4 networking system by which these students would
5 then for ever be professionally enmeshed within
6 our educational system.
7 The sole purpose as we had started
8 this endeavor was to change the classroom. We
9 had hoped that we would begin to change the
10 demographics of the faculty situation in our
11 institutions as well as nationally.
12 As this organization has matured in
13 the past seven years, we found it necessary to
14 really stimulate all segments of our society,
15 and indeed, as a national institution and
16 organization we have now grown internationally
17 where we have programs in 14 different
18 countries in Asia, East-West Europe, Africa,
19 Latin and South America.
20 The important aspect of this program
21 that I'd like to also stress is our ability to
22 reach out worldwide, globally through our
23 network and forge an alliance both for the
24 students, for the faculty, the administrators
25 as well as politicians.
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2 I'm just returning from a trip to
3 Africa visiting east, south and west African
4 countries in which we're going to globalize the
5 experience for over 240 faculty and students
6 within this organization with support from
7 organizations like Citibank.
8 Now, let me tell you a little bit
9 about what Citibank has meant to us
10 specifically. Over the course of the last six
11 years in which Citibank again was our first
12 corporate sponsor, it has enabled us to train
13 over 700 students, 125 of which are now in
14 terminal degree PhD. programs, all
15 underrepresented minorities.
16 These students are ushered through a
17 system where we not only mentor them, where we
18 network them, but we expose them to highest
19 caliber educational environment that we can
20 afford within our educational system.
21 Within that system of 125 students
22 we've provided them the opportunity to also go
23 to foreign countries, to come back now wanting
24 and desiring to discover things that many of
25 them heretofore had not even thought of.
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2 I'll tell you a story also about our
3 latest key note speaker in a national symposium
4 and that is Fredrico Pe¤a, former secretary of
5 energy and Mr. Pe¤a talked about a student from
6 New York City of all places -- he obviously was
7 based in Denver -- and he talked about a
8 student who did not really know anything about
9 higher education, a student who would look in
10 the heavens and gaze and had no idea what he
11 was looking at.
12 This student came to him and talked
13 to him about his vision of what he'd like to
14 do, and as Mr. Pe¤a described this student. He
15 talked about what this student might do for
16 America and what he might do for himself. This
17 student is currently enrolled in a PhD.
18 program.
19 It gives you some idea of the power
20 of the interface with people that this
21 difference can make for these individuals. The
22 second and last of the stories has to do with
23 someone that I was interfaced with, a very
24 important story for me because, again, it
25 brings in the context of New York when I used
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2 to be here as a professor in the City
3 University Of New York.
4 One Saturday I was in my laboratory
5 and a student was draped across the door of my
6 office, and I went to see him, and this student
7 came to me and said: I've been looking for
8 you. I've come from Beliz. I said: Well, how
9 did you know me? He talked about a program
10 that I used to head here in New York City,
11 which now has been expanded as part of the
12 Leadership Alliance network and he said: I was
13 about to go back because I had just enough
14 money to JFK and take a plane back home.
15 Well, needless to say, I was
16 enthralled by the student. He enrolled, he
17 finished his degree program, he went on, he got
18 a PhD. at MIT. He then went to Bell Labs. He
19 is now a professor at Princeton University in
20 the mathematics department.
21 These are stories again that are
22 heart warming, that show that we have the
23 opportunity to really expand the human talent
24 pool, but we need corporate America. We need
25 the federal sector. We need individuals to
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2 participate, and, again, what I want to stress
3 to you, but the first corporate partner, in
4 fact, the first funder of this venture was
5 Citibank.
6 I can't tell you how important
7 Citibank continues to be in our lives. We have
8 a member, a vice-president from Citibank who
9 sits on our corporate board.
10 The important issue I'd like to leave
11 you with is simply this. The expectation of
12 the Leadership Alliance is that with this
13 merger we are anticipating that Citibank
14 Travelers will not only continue, but enhance
15 the outreach of the Alliance, not only within
16 the United States, but globally. These are
17 global organizations and these are global
18 times. We need young people who are going to
19 be competitive and see their world globally.
20 Finally, I'd like to simply say that
21 I'm hopeful that through this merger that you
22 will approve, and that it is your
23 recommendation that we will go on and do better
24 things for America. Thank you.
25 MR. LONEY: Thank you Mr. Wyche
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2 Ms. Tom.
3 MS. TOM: Good afternoon. My name is
4 Lydia Tom and I am director of housing and
5 finance for the Enterprise Foundation's New
6 York office.
7 I would like to tell you briefly
8 about Enterprise's involvement with Citibank,
9 and how the bank has partnered with Enterprise
10 in working to improve the quality of life in
11 low income neighborhoods, through the
12 development of housing and support services,
13 both nationally and in New York.
14 Citibank has been an invaluable
15 partner in helping Enterprise to provide
16 different financial resources to low-income
17 communities. Citibank has assisted us on many
18 levels; as a funder, tax credit investor and
19 loan source.
20 Enterprise and Citibank have been
21 working together since 1991. Enterprise was
22 established by Jim and Patty Rouse in 1982 to
23 provide the opportunity for low-income
24 Americans to secure decent affordable housing
25 and move up and out of poverty. Since that
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2 time, Enterprise has helped create over 86,000
3 affordable apartments nationally, including
4 8,000 in New York.
5 Citibank has worked with Enterprise
6 in many cities around the country, including
7 New York, Buffalo, Rochester, Syracuse,
8 Delaware, Maryland, the District of Columbia,
9 Florida, San Antonio, St. Louis, Nevada, and
10 California.
11 Since 1991, Citibank and the Citicorp
12 foundation have provided $987,000 in grants to
13 Enterprise and $1.75 million in below market
14 rate loans. Citibank has provided or committed
15 to provide $74 million in equity through the
16 low income housing tax credit. This $74
17 million includes $50 million invested in the
18 New York Equity Fund, as well as nearly $20
19 million in national funds that have supported
20 special needs housing in New York. This
21 housing serves the formerly homeless, the
22 elderly, those with a history of mental illness
23 or substance abuse, and those with AIDS.
24 These numbers have a real impact on
25 communities. The funds have been used to
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2 extend to low-income families for home
3 ownership, to develop affordable rental housing
4 by placing equity from Citibank in tax credit
5 eligible multifamily housing and to support
6 special programs through grants, in such areas
7 as job training and child care that improve the
8 quality of life for residents.
9 As an investor in tax credit and a
10 source of predevelopment loans, Citibank has
11 facilitated the creation of affordable housing
12 for those who need it most. You may have read
13 a recent New York Times article that noted that
14 the numbers of housing-needy families in the
15 United States outnumber affordable apartments
16 by 4.4 million.
17 The low-income housing tax credit has
18 been a valuable tool in filling this gap.
19 Citibank's total commitment to the credit will
20 help produce an estimated 1,750 safe, decent
21 affordable homes nationally.
22 Citibank is also participating in
23 Enterprise's City Home Program, an effort with
24 NYC and the Community Preservation Corporation
25 to provide home ownership opportunities for low
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2 and moderate income families. Citibank will be
3 providing mortgages for these first time
4 buyers. City Home targets smaller, abandoned
5 city-owned buildings and helps bring stability
6 to neighborhoods by transforming eye sores into
7 community assets, and bringing back owners to
8 deteriorated blocks.
9 Predevelopment loans are another tool
10 Citibank has provided for the development of
11 affordable housing. In New York, Citibank has
12 provided $1.5 million in predevelopment funds
13 over the past two years. This includes some
14 monies to upstate regions. These funds help
15 nonprofits pay for expenses such as
16 architectural and legal fees, so that
17 construction can close.
18 Support services such as child care,
19 job training and greening projects build on
20 housing and uplift the quality of life in
21 neighborhoods. Citibank has been sensitive to
22 these needs.
23 Citibank was an early funder of a
24 child care initiative Enterprise established.
25 Through this project, two facilities have been
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2 developed that provide quality child care for
3 over 200 children from low-income families.
4 Citibank also provided funds for a training
5 program connected with one of these centers
6 through which low-income women receive training
7 in the Montessori Method of early childhood
8 development while working as a teachers aid and
9 classroom assistants. This program, serving
10 about 20 women, has made it possible for
11 several participants to get off welfare and
12 pursue a career in early childhood education.
13 Citibank has also used its resources
14 to fund employment initiatives, a major concern
15 now that welfare reform has impacted
16 communities.
17 On a national level, Citibank funds
18 made it possible for Enterprise to launch the
19 Volunteer Institute in 1994. The Volunteer
20 Institute provides training for AmeriCorps
21 volunteers solicited by selected nonprofit
22 groups for community safety programs. Thanks
23 to Citibank's generosity, this program has had
24 outstanding results for people at very low
25 income levels, some of whom are having their
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2 first experience in the work world.
3 Citibank also funded a new job
4 training effort in New York called the Tree
5 Keeper Training program which will train
6 residents in low-income neighborhood in tree
7 maintenance and landscaping and link them with
8 jobs with smaller landscaping contractors
9 looking to create city-based work crews.
10 On the community level, Citibank has
11 used its resources to develop creative
12 partnerships to meet local needs. Through its
13 Culture Builds Community program, Citibank
14 funded a program implemented by Enterprise and
15 Trees New York in 1995, to plant street trees
16 along West 159th Street in Washington Heights.
17 The Community League of West 159th Street was
18 the local sponsor.
19 Residents helped plant and have since
20 cared for and maintained the trees. Not only
21 has the program helped bring greenery to the
22 block, but the care of the trees has served as
23 an organizing tool for tenant associations.
24 Finally, the leadership of Citibank
25 senior executives has been a great asset to
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2 Enterprise. Janet Thompson and Emilio
3 Fernandez serve on Enterprise advisory boards
4 in New York and Miami, respectively.
5 In New York, Janet has been
6 instrumental in examining ways in which
7 Enterprise and Citibank can contribute to a
8 more comprehensive approach to community
9 development. Other Citibank executives have
10 been very active in Enterprise New York's
11 Junior Board, a group of young professionals
12 who participate in hands-on activities in
13 neighborhoods, such as planting community
14 gardens and furnishing community rooms.
15 Citibank has been very helpful with
16 Enterprise's annual network conference, which
17 now involves over 1,300 housing professionals
18 from around the country. Citibank executives
19 have addressed the conference and participated
20 in workshops.
21 Enterprise supports the application
22 for Citibank and Travelers to merge. We hope
23 that this is an opportunity to expand services
24 to low-income communities, through the
25 combination of Citibank's existing initiatives
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2 with the resources that Travelers brings,
3 including $100 million in tax credit
4 investments made by Salomon Brothers.
5 MR. LONEY: Thank you, Ms. Tom.
6 Mr. Warns.
7 MR. WARNS: Thank you for the
8 opportunity to speak in support of Citibank and
9 their work with us.
10 I am president of the United Way of
11 Tri-State which is a regional organization
12 serving New York, Connecticut and New Jersey
13 here in the New York metropolitan area. The
14 past year we raised about $103 million from
15 about 140 regional companies of which Citibank
16 is one.
17 We distribute this money to 30
18 participating United Ways in the three-state
19 region. These United Ways provide funding to
20 1800 health and human service agencies in
21 almost every community.
22 Citibank has a major supporter of the
23 United Way for many years. Their support in
24 fact helped found our organization in 1977 and
25 prior to our founding, there was the Greater
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2 New York Fund and several other United Ways in
3 this area that they supported. We were the
4 first regional United Way to be formed here,
5 thanks to their help.
6 In 1997 Citibank donated $750,000 for
7 the United Way campaign and their generous
8 employees contributed another $1,850,000 for
9 the campaign. Since 1992 Citibank and it's
10 employees have contributed over ten million
11 dollars to the United Way in this region, that
12 doesn't count the thousands of dollars they
13 contribute elsewhere in the country. These
14 donations in conjunction with the donations of
15 all other participating companies and their
16 employees helps an estimated 6.5 million people
17 in this region, or roughly about one in every
18 three people over the past ten years.
19 In addition, Citibank encourages
20 their employees to volunteer, as you've heard
21 here, with organizations in communities to help
22 improve these communities in which they live,
23 work and receive services themselves. This
24 help, as you've heard here, also has helped
25 other nonprofits do well, as well as improve
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2 the communities and the neighborhoods, at least
3 in this region.
4 The United Way is grateful for
5 Citibank's support and believe the future
6 combined entity with Travelers will also be a
7 strong corporate supporter of health and human
8 services throughout the tri-state region
9 helping to meet critical human needs in this
10 area. Thank you very much.