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Goldman withdraws sponsorship of working class credit union that supports #OWS

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Submitted by jest on Sun, 10/23/2011 - 3:57pm
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Bank Withdraws From Fund-Raiser After 'Occupy Wall Street' Gets Place at Table

1) #OWS opens an account at Lower East Side People's Federal Credit Union, a local credit union, to hold donations.

2) The Vampire Squid sponsors a dinner held by Lower East Side People's Federal Credit Union, which also serves the poor.

3) Lower East Side People's Federal Credit Union honors Occupy Wall Street at the dinner

4) Goldman Sachs, which told the credit union it didn't want its name or money used to celebrate a protest movement known for placards like "Goldman Sachs is the work of the devil," took their money and left.

What a bunch of idiots.

WSJ:

Earlier this month, hundreds of New Yorkers received an unusual dinner invitation from the Lower East Side People's Federal Credit Union.

The Credit Union, a small lender serving New York's poor, was holding a fund-raiser to celebrate its 25th anniversary. Among the chief sponsors listed on the invitation was Goldman Sachs Group Inc.

Among the honorees: "Occupy Wall Street."

They might as well have asked Marie Antoinette to dig into her purse to support Madame Defarge's knitting business.

Shortly after the invitation was sent out, Goldman withdrew its name from the dinner. It also pulled the plug on its $5,000 funding pledge.

The debate that ensued—between bankers and nonprofit chiefs, philanthropists and financiers—turned a modest fund-raising dinner into a heated battleground between Wall Street and the Occupy protestors, exposing contradictions on both sides.

On one side was Goldman Sachs, which told the credit union it didn't want its name or money used to celebrate a protest movement known for placards like "Goldman Sachs is the work of the devil," dinner organizers said. The investment bank's giant glass-and-steel headquarters tower is just blocks away from the protest headquarters in Manhattan's Zuccotti Park.

On the other side of the debate were several hosts and board members of the credit union, who said honoring the protesters is more important than the money from Goldman—even though the funds were slated to cover a quarter of the dinner's $20,000 cost.

"Their money was welcome, but not at the price of giving up what we believe in," said Pablo DeFilippi, one of the dinner hosts and associate director of member development at the National Federal of Community Development Credit Unions. "We lost their $5,000, but we have our principles."

Linda Levy, CEO of the Lower East Side People's Federal Credit Union, declined comment saying "I made promises to people about talking about this."

Protesters take a lighter view: Pete Dutro, 36, of Brooklyn, chuckled when told about Goldman's withdrawal from the dinner, and said: "Do you blame them?"

The spat began in late September. On Sept. 30, the Friends of Liberty Park—the unincorporated association of the Occupy Wall Street protest— opened an account at the Lower East Side People's Federal Credit Union to accept donations.

Mr. Dutro, who says he's on the Occupy Wall Street finance committee, said the protesters chose the credit union because "it's a people's bank. It's not run by Wall Streeters." Another protestor, who calls himself "Mercury John" called the credit union "an honest, good local bank." The group later opened an account at Amalgamated Bank, which is closer and now has most of their cash. The group has about $450,000 in donations.

On Oct. 1, the credit union's board decided to make the protest part of the anniversary dinner, to be held on Nov. 3, to help raise $70,000. The decision touched off a fierce email exchange between members of the host committee.

Some said the decision to honor the protesters was inappropriate, since companies like Goldman supported the credit union. Goldman and other banks help to fund a nonprofit financial education program run by the credit union.

Other host members said Occupy Wall Street was perfectly in keeping with the values of the credit union, which serves low-income borrowers and preached the importance of "grass roots" lending.

"Let's just say the opinions were strong," said Mark Reed, a host committee member who runs the Contact Fund, a New York-based private investment fund that lends to nonprofits, including the credit union. "It was one of those email exchanges that you talk about the next day at the office."

Half of the 12 host members pulled their names from the invitation. A second round of invites, listing the remaining six hosts, went out this week. Tickets for the dinner, to be held at the Astor Center downtown, are $150 per person.

Capital One bank, which was also listed as a host member, withdrew its name but agreed to keep its $5,000 pledge to the event. Capital One said that it "continues to support the Lower East Side People's Federal Credit Union's work in the community."

Goldman withdrew both its name and money.

Gwen Robinson, the Goldman vice president who was listed on the host committee, declined to comment. People familiar with the discussions said Ms. Robinson and Goldman agreed it "wasn't appropriate" for the company to link its name with the protests. Goldman continues to fund the credit union's financial education program.

Mr. Reed, who used to work in credit derivatives on Wall Street, said he decided to keep his name on the host list because "this was about supporting the institution and their 25 years of good work." Still, he said the debate exposed false stereotypes promoted by both sides of the Occupy Wall Street debate.

The protesters are wrong to label all bankers as "evil" since Goldman and others support many charitable causes and programs for the poor, he said. At the same time, he added, bankers shouldn't be so offended by the protesters, since "they've gone to great lengths to say they have no point."

"My belief is that Goldman can coexist in the same spheres as the protesters," Mr. Reed said. "While they may be angry at each other, they're also part of the same world with the same problems that need solving."

—Jennifer Maloney contributed to this article.

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Submitted by Alcuin on

A most interesting development and article, Jest. Thanks for sharing.

First, I'm not sure it is useful to call those who withdrew their support "idiots". Perhaps that is a natural reaction, but it tends to inhibit understanding the larger picture, which is that capitalists, after harvesting the "surplus" of labor, then use that surplus to both generate more profit, in the form of interest on loans, and polish their apples by engaging in "social work". Mark Reed, who is the principal of the Contact Fund, used to work in credit derivatives, according to the article, for crying out loud. When I went to the website of the Contact Fund, I found that it is a community development fund where 1%-ers "earn" a "market rate" on their surplus capital. Currently, that is 2.5%, much better than any of the 99%-ers can earn. To invest in the Contact Fund, one must be an "accredited individual investor". One definition of that individual is this, according to the website:

"a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year"

If nothing else, I think that reading and reflecting on this article ought to inspire progressives to educate themselves about the complexity of the "enemy" and how tangled is the web we weave. In a very real sense, we are all in this together - pointing the finger at the "bankers" sometimes obscures the truth.

Who would have known that a credit union was partially funded by Goldman Sachs? Ah, the irony ...

I wonder what an investigation of the Amalgamated Bank might reveal? What is under their rocks?

Submitted by cg.eye on

Everyone knows that gifts can be used as a form of reputational laundering, so why assume better motives from banks whose neglect of small lenders and 99-percenter communities mandated their participation in events like these?

To repeat from below:

"Well, Goldman Sachs has no local community—they’re on Wall Street—so the Federal Reserve said, Well, go find a community. So they found the Lower East Side, which basically encompasses Wall Street, by the way, and so they said they’ll give money to this community bank. Now normally you make available $100 million in capital, a few millions dollars. Goldman came up with five [thousand]—because there’s no law which says exactly how much. Citibank put up, made available $1 billion for community reinvestment. Goldman Sachs $5000."

Alcuin, I'm a bit leery, because I haven't seen your posts before this week, and right now you're taking the side of the 1-percent, more than not, in having us feel sorry for them, or suspicious of ourselves, because, heavens, we work and use banks. We are not all in this together. Racists who specialized in hanging Negroes did not need their special pleadings understood; they needed to be stopped.

Once the latest generation of the 1 percent openly embraced their goal of seeing the 99 percent die, by means fast or slow, I stopped needing to "understand" them through such mechanisms as your evocation of 11-dimensional chess. It's not that hard -- not the bribes, not the 'good intentions' of the 1-percent class dedicated to keep the remainder pacified through social work and philanthropy, It's just the system that cropped up after the last wave of progressive reform threatened robber-baron interests, a hundred years on....

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Submitted by propertius on

Much as I dislike Goldman, it's hardly surprising that they'd be loath to invest in an institution that was actively supporting condemnation of them. I wouldn't expect that any more than I would expect the Log Cabin Republicans to support Santorum.

Jeff W's picture
Submitted by Jeff W on

Here [audio here at 20:50] is Greg Palast on KPFA’s Flashpoints 18 October 2011 (it appears that Palast actually broke the story) [my own transcript]:

The Lower East Side Credit [People’s Federal] Union, the community bank, which is the big not-for-profit bank that serves all of New York’s low-income community—80% of their customers are below the poverty line—and they’re the only people who will give out little loans for little businesses in the barrio in New York—and so they decided to honor Occupy Wall Street but there was a price to be paid.

They had received for their annual meeting dinner a donation, so-called, from Goldman Sachs—from “the…occupiers of Wall Street” who occupy the upper floors. Goldman Sachs sent this little community credit union $5000 to cover the cost of their annual dinner and to put their names on their little invitation. So it’s “Goldman Sachs presents the honoree Occupy Wall Street.” So Goldman, believe it or not, went frickin’ ballistic, insane, nuts, mad. And…basically, they threatened this community bank and basically want the word to go out that any not-for-profit banks, community banks, credit unions that dare associate with Occupy Wall Street will be financially punished.

This is very scary for these little banks, OK? ‘Cause they don’t get any—they get no TARP money, they get no backup from the federal government, they get nada. The community banks are owned and controlled by the communities themselves. So Lower East Side just said, told Goldman “We’ll give you back your money” and Goldman said “You can’t honor anyone without our approval,” as if they were the owners of the community bank.

Now here’s the thing: it wasn’t a generous gift of $5000. And let’s not forget that Goldman’s top managers earned $50 billion. Let me repeat that: $50 billion. They give $5000 to [this] community credit union but it wasn’t out of the generosity of their heart. It was required by law. It was part of their Community Reinvestment Act requirements. They have a Community Investment Act compliance.

When Goldman Sachs—this is very important to know how the 1% makes their money, they’re not ‘job creators’—this is what the ‘job creators’ did for us. When Goldman Sachs brought the world economy to its knees with crappy fixed mortgage securities, they turned to the federal government to give them $20 billion in bail-out money and to do that, they had to turn themselves from an investment bank, which is really a fancy casino, into a commercial bank, which takes usually years. They did it in 24 hours at the command of ‘Timmy’ Geithner.

So Goldman Sachs was turned instantly, like a fairy godmother poof!, from an investment bank into a commercial bank and a commercial bank is supported by you and me. Then they got their TARP money. But if you’re a commercial bank, the law requires you to invest in your local community.

Well, Goldman Sachs has no local community—they’re on Wall Street—so the Federal Reserve said, Well, go find a community. So they found the Lower East Side, which basically encompasses Wall Street, by the way, and so they said they’ll give money to this community bank. Now normally you make available $100 million in capital, a few million dollars. Goldman came up with five [thousand]—because there’s no law which says exactly how much. Citibank put up, made available $1 billion for community reinvestment. Goldman Sachs $5000.

The host Dennis Bernstein: “That’s what these guys spend on a bottle of wine.”

Submitted by Alcuin on

I didn't know that Goldman Sachs had a Community Investment Act compliance requirement. Thanks for educating me. I guess they'll take their money to a credit union who will roll over for them, now.

Submitted by Alcuin on

Greg Palast has an article that probably re-states what Jeff W posted, but I don't like to watch videos - I much prefer reading. What I didn't see in what Jeff W posted was the fact that the funds that Goldman Sachs gave to Peoples Federal Credit Union (and then took back) were part of TARP. In effect, our money. Yes, it is all about privatizing gains and socializing losses, isn't it?