In an action to force some of the country’s larger banks – including Bank of America, JP Morgan Chase, Wells Fargo and Citigroup – to reconsider their home-foreclosure policies, congregations with membership in various PICO-affiliates around the country withdrew about $40 million. PICO is a network of Alinskyian community organizations, drawing most of their membership from religious institutions, and its leadership says that “large banks must be held responsible for the ‘ruthlessness of what they have done to families.’”
The PICO campaign has a larger purpose, however. “The campaign to boost bank accountability has gained wider awareness across the country as hundreds of faith-based and grass-roots organizations began working alongside the Occupy Wall Street movement. The groups have succeeded in calling attention to …. banks’ lobbying efforts to water down rules governing financial reform under the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010.”
In other words, PICO’s campaign – ostensibly about home-foreclosure (to rally the troops) – has the far more politically significant goal of protecting the Dodd-Frank Act.
THE DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT OF 2010
Understanding the Dodd-Frank Act is no minor undertaking. “The scope and structure of Dodd-Frank are fundamentally different to those of its precursor laws,” Jonathan Macey of Yale Law School explains. “Laws classically provide people with rules. Dodd-Frank is not directed at people. It is an outline directed at bureaucrats and it instructs them to make still more regulations and to create more bureaucracies.”
For legislation that isn’t about “rules,” the Dodd-Frank Act is enormous – and complicated. Among other things, it creates a new Bureau of Consumer Financial Protection (CFPB) that the US Chamber of Commerce says is designed to “push the market towards only standard, low risk products; reduce the choices available to consumers and small business owners; and drive up the costs of available credit. The agency has a key choice between enforcing consumer laws and improving consumer disclosures or using its unprecedented powers to restrict consumer choices, limits consumer credit, or otherwise politicize the allocation of credit.”
Most ironically, according to Tea Party conservatives, the Dodd-Frank behemoth “restricts available credit, slows job creation as a result of massive government intrusion and creates a protected class of ‘too big to fail’ banks.”
Interesting, isn’t it? Political progressives and conservatives both want big-bank opportunism curbed but progressives see the Dodd-Frank Act as a tool to this end while conservatives believe it only creates deeper hidey-holes.
WHO’S INVOLVED WITH THE PICO CAMPAIGN?
There are two Catholic personalities working with the PICO campaign to “hold banks accountable.” One is Father Seamus Finn, a member of the board of directors and the executive committee of the Interfaith Center for Corporate Responsibility (ICCR) and serves as a key advisor for an organization called Investing for Catholics (IC), a division of Index Funds Advisors, Inc. The idea behind these two groups is to provide investors with sound financial advice that is also principled. In other words, investors who are not merely concerned about “wealth management” (the lucky dogs!) but also about “good stewardship” need help in discerning how they may best accomplish both ends. IC screens recommended mutual funds “for Catholic values.” For its part, ICCR seeks to integrate “social values into investor action.”
The other Catholic personality in the PICO campaign is Benedictine Sister Susan Mika, executive director of the Socially Responsible Investment Coalition (SRIC). SRIC, much as the groups Father Finn represents, is an attempt to help member investors and shareholders “balance their economic policies and practices with their fair and social concerns,” with the intent that this effort seeks “to influence corporations toward social responsibility.” SRIC and IC are members of ICCR.
The work of ICCR is pretty sophisticated. “Harnessing their power as active shareholders, ICCR members promote corporate transformation from the inside by engaging and advising management toward sustainable practices that ensure long term business growth while measurably improving their environmental and social impacts.” ICCR members – of which, recall, SRIC and IC among – include representation from many of the same religious bodies and unions one finds participating in Alinskyian community organizing so it isn’t at all surprising to find them working together in this particular venue.
ALINSKY AND CORPORATE ACCOUNTABILITY
In fact, ICCR seems to have taken Alinsky’s ideas and run with them. In Saul Alinsky’s book, Rules for Radicals, there’s a chapter called “The Genesis of Tactic Proxy.” Alinsky writes: “[W]e are predominantly a middle-class society living in a corporate economy, an economy that tends to form conglomerates so that in order to know where the power lies, you have to find out who owns whom. …. The one thing certain is that masses of middle-class Americans are ready to move toward major confrontations with corporate America.”
This was published in 1971 and the Alinskyian organizing networks have reached deeply into the fabric of American society by organizing among the more progressive congregations of mainstream religious bodies. Alinsky hands the organizers of the future a tool for bringing about the confrontation with corporate America that he desires: “The proxy idea first came up as a way to gain entrance to the annual stockholders’ meeting for harassment and publicity, and again accident and necessity played a part....Soon I was intoxicated by the possibilities. You could begin to play the whole Wall Street Board up and down. You could go to, say, Corporation Z, point out your proxy holding there, mention that there were certain grievances you had against them for some of their bad policy operations, but that you were willing to forget about them (for the time being) if they would use their stock to put pressure on Corporation Q for the sake of influencing Corporation X. The same muscle could be applied to Corporation Q itself. You could make your deals up and down. Always operating in your favor was the self-interest of the corporations and the fact that they hate each other. This is what I would call corporate jujitsu....”
Corporate jujitsu is at the very heart of ICCR’s work. The Catholic News Service article about PICO’s religious congregations withdrawing money from the country’s big banks says that Father Finn plans “to present resolutions during the annual meetings at JP Morgan Chase and the investment firm of Goldman Sachs in May.” Father said that “the massive bank lobbying effort to minimize the impact of Dodd-Frank on trading and investment practices is high on the list of concerns being raised with corporate CEOs.” The PICO tactic of making large withdrawals was “meant to get the attention of corporate officials. ”
For her part, Sister Mika “told CNS [Catholic News Service] that she pointed to conflicts of interest between brokers and analysts, liabilities that are not listed on balance sheets, tax avoidance and risk management in derivatives trading. She also charged that the company was ‘spending enormous amounts of money to stall the rulemaking process’ under Dodd-Frank.”
Keep your eye in the ball. With ICCR and PICO “playing the whole Wall Street Board up and down,” their protesters may be drawn into the game by the home foreclosure issue – in Alinskyian terms, by the “self-interest” that gets clergy and congregational activists sufficiently engaged to go down to the banks and take out their money – but the goal is getting “the attention of corporate officials.”
WHO IS THIS ICCR AGAIN?
In 1992, Willa Ann Johnson, one of the Capital Research Center’s founders, was asked in an interview how clergy contribute to the patterns of corporate philanthropy in the United States. Johnson answered that “often religious leaders are proponents of the social gospel and liberation theology” and gave several examples.
She went on to describe the ICCR of the early 90s: “Religious organizations are heavily involved in the corporate responsibility, progressive philanthropy, and socially responsible investing movements. One of the principal groups is the Interfaith Center on Corporate Responsibility, a coalition of more than 200 mainly Catholic orders, dioceses, and pension funds, which has organized boycotts against what it sees as ‘socially irresponsible’ companies. It is a consultant to pension funds and mutual funds and acts as a clearinghouse for information on conscience investing. Timothy Smith, ICCR’s founder and leader, received a Master of Divinity degree from Union Theological Seminary. According to Smith, as of 1985, ‘The Interfaith Center’s church members have $10 million invested’.”
Twenty years later, the combined portfolios of ICCR investors was estimated at $100 billion.
Johnson went on to explain that much of ICCR’s funding has been filtered through the National Council of Churches and clearly believed that its political orientation colored ICCR’s work. “It was the NCC’s Commission on Stewardship that distributed a book calling for ‘the extrication of stewardship from its almost indelible association with economic capitalism’ and a ‘new look at the socialist alternative….’”
According to its 2010-2011 Annual Report, ICCR’s issues – the reason it conducts “corporate dialogues” and “shareholder resolutions” – come down to food and water: assuring that the world’s people have access to fresh, clean water and ethical food production. Johnson noted that in all this discussion of “human rights” as realized in concerns about the environment workers rights, etc., the preeminent right of life, threatened by abortion, went unaddressed.
That holds true today, as well.
The Annual Report holds some other interesting information, as well. Some of ICCR’s biggest donors, “whose generous support enables ICCR to continue its important work,” are Monsanto – a multinational agricultural biotechnology corporation that produces and markets genetically engineered seed and bovine growth hormone – Goldman Sachs, and Citigroup, Disney Worldwide Services and Pepsico, among dozens of others. Many of these corporations not only have corporate values that challenge various points of Catholic social teaching but that challenge ICCR’s pet issues, as well. It’s as if American Life League, an anti-abortion activist organization, had received tens of thousands of arch-abortion provider Planned Parenthood dollars to help American Life League “continue its important work.” Well…it’s something to ponder, no?
ICCR is also an “allied organization,” a member organization, among dozens of international bodies that endorse the goals of the Task Force on Financial Integrity and Economic Development. Those goals, according to the Task Force mission statement, are to “address the inequalities in the global financial system …. to mobilize stable and predictable resources to supplement traditional development assistance.”
Many of these groups are openly socialist in their programs. The UK think-tank New Economics Foundation has a “Banking for the Great Transition” initiative that explains, “The Government has no more urgent matter than controlling the banks and re-building the system in which they operate.” Not surprisingly, London Citizens – a UK local of the Alinskyian Industrail Areas Foundation Network – was responsible for publishing a New Economics Foundation report at one of its 2009 assemblies.
Another fellow traveler with ICCR having globalist Task Force goals is USAction, a contemporary reincarnation of socialist Heather Booth’s Citizen Action (Booth is now USAction’s vice president). USAction is also an Alinskyian organizing network. Another group, which recently closed its operations, was the pro-abortion Global Health Council. In other words, ICCR hangs with an interesting crowd.
JPMORGAN CHASE AND CO.
A few weeks after PICO announced its banking campaign, JPMorgan Chase and Co. revealed the awkward news that it had lost $2 billion – or maybe it was $3 billion or maybe $5.8 billion – in a derivative trading gamble that supporters of the Dodd-Frank Act are quick to point out would not have happened if the legislation’s restrictions had been in force.
A the bank’s subsequent annual meeting, Father Finn addressed JPMorgan’s chief executive officer, Jamie Dimon, saying: “[Y]ou showed your disappointment at the mistakes our company has made over robo-signing and sloppy practices that have wreaked havoc on the life of many homeowners. You assured us you would learn from those mistakes….We heard you describe the latest problem as an ‘oversight’ … you spoke of red flags. Do you still believe that the company should still self-regulate any trading on their own accounts? ….We can't help wondering if you are listening.”
Since this initial meeting, fines have been paid, there have been resignations and repositioning of top executives, and a US Senate panel led by Carl Levin has begun a closed-door investigation. “Levin,” according to one report, “seized on JPMorgan’s trading losses in May as a way to bolster another priority: the Volcker rule. He, along with Oregon Democrat Jeff Merkley, crafted the ban included in the Dodd-Frank Act on proprietary trading and limitations on bank investment in hedge and private-equity funds. While Levin declined to commit to an investigation of the bank at the time, he did say that the losses were “a textbook illustration” of why regulators needed to tighten the restrictions in the Volcker rule before the proposal becomes final.”
Meanwhile, the ICCR is encouraging the media to keep covering “these banking scandals and their impact on average Americans and poor people around the world.” In the words of one ICCR admirer, “Corporations must be subject to the people's will; they should have to prove their worth to society or be dismantled. Corporations must be accountable to public needs, be open to public scrutiny, provide living-wage jobs, and abide by all environmental and labor regulations.” Pointing to the work of ICCR, the author continues, “Shareholder activism is an excellent tool for challenging corporate behavior.”
Spero columnist Stephanie Block is based in New Mexico.
Dennis Sadowski, “Growing divestment campaign among churches targets biggest US banks,” Catholic News Service, 4-27-12
“Growing divestment campaign…”
“The Dodd-Frank Act: Too big not to fail – Flaws in the confused, bloated law passed in the aftermath of America’s financial crisis become ever more apparent, The Economist, 2-18-12.
US Chamber of Commerce: www.uschamber.com/regulations/finance
Christine Morabito, “Message to Tea Party: Scott Brown is NOT the Enemy,” Greater Boston Tea Party Blog, 5-4-12.
Investing for Catholic website, “”About Investing for Catholics:” www.investingforcatholics.com
Interfaith Center on Corporate Responsibility website, “About ICCR:” www.iccr.org/about
Socially Responsible Investment Coalition website, “About Us:” www.sric-south.org/about.html
ICCR website, “About ICCR.”
ICCR website, “List of Members.”
Saul Alinsky, Rules for Radicals: A Pragmatic Primer for Realistic Radicals, (Vintage Book, Random House: 1971), pp 166-7.
Rules for Radicals… pp 172; 176.
“Growing divestment campaign…”
Acton Institute, Religion and Liberty Interview with Willa Ann Johnson, Vol II, No. 1, 1992.
Mary Evelyn Jegen, Just Peacemakers: An Introduction to Peace and Justice, Paulist Press, 2005. P. 145.
The National Council of Churches created ICCR in 1974 “to advise and guide church groups regarding the ethical implications of their investments.” [M. David Ermann and William H. Clements, II, “The Interfaith Center for Corporate Responsibility and Its Campaign against Marketing Infant Formula in the Third World,” Social Problems, (University of California Press: 12-1984).
As another example, in 1975, the National Council of Churches sponsored a conference titled the “Ecumenical Consultation on Domestic Hunger” that passed a statement saying “there was a basic contradiction between capitalism ‘and biblical justice, mercy, stewardship, service, community and self-giving love.’” Rael Jean Isaac and Erich Isaac, The Coercive Utopians: Social Deception by America’s Power Players, Discipleship Books: 1985, p.24, excerpting from The Presbyterian Layman, Nov/Dec 1975.
Task Force on Financial Integrity and Economic Development website, member listing: www.financialtaskforce.org/about/allied-orgs/members.
New Economics Foundation: www.neweconomics.org/projects/banking-for-the-great-transition
“UK needs a fair lending law to stop loan sharks, says nef: Report on ‘legal loan sharks’ to be launched at citizen’s assembly,” New Economics Foundation website, 11-25-09. The report is titled: “Doorstep Robbery: Why the UK needs a fair lending law.” www.neweconomics.org/press-releases/uk-needs-fair-lending-law-251109
Matt Scuffham and David Henry, “JPMorgan CIO retires, Obama says proves reform case,” Reuters, 5-14-12.
Dawn Kopecki and Cheyenne Hopkins, “JPMorgan Said to Face Escalating Senate Probe of CIO Loss,” Bloomberg, 9-6-12.
Silla Brush, “Dodd-Frank Swaps Legislation Delayed After JPMorgan Trade Losses,” Bloomberg.com, 5-15-12.
Karen McVeigh in Tampa and Dominic Rushe in New York, “JP Morgan: justice department opens investigation into $2bn trading losses: Chief executive Jamie Dimon sees off attempts by shareholders to strip him of his role as chairman – but pressure is mounting,” The Guardian (UK), 5-15-12.
“JPMorgan Said to Face…”
Jerry Filteau, “Social Responsibility Groups ask ABC, NBC to Report Global Banking Manipulation,” National Catholic Reporter, 8-13-12.
Deborah James, Ten Ways to Democratize the Global Economy, Common Courage Press, 2000.