Wednesday, March 30, 2011

Dr. John Carlos to Speak at the West Virginia University College of Law

Dr. John Carlos, who along with Olympic teammate Tommie Smith were criticized for protesting on the medal stand at the 1968 Mexico City Games, will discuss the evolving role of African American athletes in American culture and politics in a speech sponsored by the West Virginia University College of Law Sports and Entertainment Law Society.

Carlos will speak at noon on Thursday, March 31, 2011 at the Marlyn E. Lugar Courtroom in the WVU Law Center.

Specifically, Dr. Carlos will discuss the national platform athletes are given, as the American public has become more and more enthralled in the commercialized sports industries. He will discuss how and if African American athletes utilize this platform as he and Smith did in 1968. Carlos won the bronze medal in the 200-meter dash behind Smith and Australian Peter Norman. While receiving their medals, Smith and Carlos raised gloved fists as a silent protest of racism and economic depression among oppressed people in America. In response, International Olympic Committee president Avery Brundage banned the two men from the Olympic Village and forced them from the United States Olympic team. Carlos and Smith were embattled for years following their bold and meaningful protest.

The event is free to the public and will be webcast live at

Monday, March 28, 2011

Mozilo Escapes Criminal Charges For Role in Mortgage Meltdown

Following the SEC’s securities fraud wrist slap of former Countrywide CEO Angelo Mozilo to the tune of $67.5 million civil fine (only $22.5 million was paid by Mozilo, who received $521.5 million in compensation from 2000 to 2008) for his prominent role in the mortgage meltdown, federal prosecutors decided last month to drop criminal charges against Mozilo without so much as an indictment.

Assistant U.S. Attorneys cited the higher burden of proof in criminal cases, the number of players involved, and the overall complexity of the case as reasons for dropping the charges. One said, “it can be worse losing a case than not bringing one at all.” Instead of hitting the corporate titans, like Angelo Mozilo and Richard Fuld, the Justice Department is focusing more on the “low-hanging fruit,” such as mortgage brokers, appraisers, loan officers, and borrowers who “directly defrauded a bank for individual gain.”

The prosecutors dropped the case notwithstanding documented communications from Mozilo describing his own company’s loan products as “toxic” and “poisonous.” Other mega-lending executives admitted to not recognizing the financial cataclysm on the horizon because they were “having too much fun” and “getting loaded on Miller Lite.”

As highlighted in the Oscar award winning Documentary "Inside Job," it appears absolutely clear now that the Department of Justice and the Obama administration are content to absolve all corporate malfeasors of any criminal culpability, or really any responsibility at all, for recklessly driving their banks and firms into near bankruptcy. If Angelo Mozilo is not to be indicted for criminal fraud, then all of the Wall Street leadership that recklessly crashed the economy must be breathing easier, celebrating their ill-gotten record gains.

*** Cross posted on the SALT Blog ***

Thursday, March 17, 2011

Hip Hop's Far Reaching Corporate Impact

On Super Bowl Sunday last month, Chrysler dropped a cool $9 million dollars for a 2-minute commercial, the longest in Super Bowl history. The commercial showed gritty, emotional everyday pictures of Detroit and Detroiters and asked, “What does a town that’s been to hell and back know about the finer things in life?” The commercial ended with Chrysler’s new tag line: “Imported from Detroit.”

The commercial set the internet ablaze. Traffic on, the premier online automotive information site, spiked. Chrysler-related searches increased by 267% and 1,619% for Chrysler’s new 200, featured in the ad. Chrysler’s bold, profound commercial was ranked by many as one of the top commercials of the Super Bowl. When Sergio Marchionne, CEO of Chrysler, gave his execs a sneak-peak of the ad, many were reportedly close to tears.

Why was this commercial so memorable, moving and so successful (not to mention expensive and risky)? Aside from featuring a battered Detroit now purpotedly rising from the ashes and coming on strong, Chrysler decided to also feature an infamous Detroit native. Perhaps like the automobile industry itself, this Detroit native plateaued several years ago and seemed to fade in import and impact. But now, on a comeback himself, hip hop superstar Eminem can speak for a city and citizenry that are seeking to rise to a new found prominent place.

The irony in this interesting circle of corporate risktaking is that, as reported by Forbes magazine, Marchionne himself hesitated before deciding to make Eminem the face of his franchise in this expensive outlay of shareholder value. Marchionne admitted, “This was not an easy choice. . . . Apart from the money involved . . . and this is pretty expensive stuff, but you know, the choice of the topic, the choice of the characters in the thing were not easy choices. I had to think about this really long and hard. . . . You know, I love Eminem but . . . I also know that some of the choices of language that he has made are things that are not what I would consider to be commonly shared.” Marchionne necessarily treaded a delicate line in featuring the hip hop bad boy who is famous for hard-core lyrics and profanity, as well as bouts of homophobia and misogyny.

Eminem’s manager, Paul Rosenber, explained that the ad “started off as a request to license music but after . . . learning more about [Chysler CEO] Sergio Marchionne's vision, we realized there was a lot in common with Chrysler's story as it relates to Detroit and Eminem and his ability to overcome. We think the video we made with Chrysler is a statement about the passion of the company and the City of Detroit and we are proud to be a part of it."

Marchionne eventually overcame his reluctance to use Eminem as his spokesperson, recognizing how much the rapper has in common with the automaker. “[Eminem] represents part of America that I think is important as hell. I think it’s at the heart of what we are.” OK, not everyone likes the rapper’s music, Marchionne conceded, “but a lot of what he is, is us, you know? I mean there’s a sort of seriousness about that kid . . . which is true of [Chrysler]. The fact that we’re coming out of nowhere, right? A lot of people last year asked us, you know, are you still going to be here in 12 months?”

Marchionne is convinced. The question is, are the shareholders of Chrysler?

Friday, March 4, 2011

African Americans, Economics and the American Corporation

My scholarship has examined aspects of the economic health of black America in general, and the important and complex relationship between African Americans and the American corporation in particular.

Any consideration of the economic wellbeing of twenty-first century African Americans must begin with the African slave trade that brutalized millions of Africans for centuries. There is an inextricable connection between the poverty in which disproportionately large numbers of present-day African Americans live and the fact of slavery during which millions of African ancestors worked to establish the U.S. as an economic giant. The work of Africans generated considerable wealth for white enslavers – wealth that has passed from generation to generation. Enslaved Africans, of course, had no wealth to pass on to their children because they received no compensation for their labor. My grandmother turned 107 on December 2nd, 2010. She was raised by her grandparents, Albert and Sally Booker, both of whom were born into slavery. The family for whom my great-great grandparents worked passed onto each subsequent generation a legacy of economic wellbeing. It is not surprising that my mother will inherit nothing from my grandmother, the granddaughter of slaves. The institution of slavery is only one of several factors that explains the significant wealth gap between today’s African Americans and their white counterparts.

Economic deprivation of African Americans continued after enslaved Africans were emancipated in 1865. Most African Americans in southern states became sharecroppers. “In the sharecropping system, it was the planter who took the crops to market or the cotton to the gin. The sharecropper had to take the planter’s word that the planter was crediting the sharecropper with what he was due. By the time the planter subtracted…the seed, the fertilizer, the clothes and food—from what the sharecropper had earned from his share of the harvest, there was usually nothing coming to the sharecropper at settlement….In some parts of the South, a black tenant farmer could be whipped or killed for trying to sell crops on his own without the planter’s permission….There was nothing to keep a planter from cheating his sharecropper. ‘One reason for preferring Negro to white labor on plantations…is the inability of the Negro to make or enforce demands for a just statement or any statement at all. He may hope for protection, justice, honesty from his landlord, but he cannot demand them. There is no force to back up a demand, neither the law, the vote nor public opinion.’”[1]

Because of the blatant injustices and unfairness inherent in the south’s sharecropping system, several generations of African Americans migrated to the north where they found work in factories and urban workplaces. But, even in the north, African Americans faced discrimination and racism that made it impossible for them to earn what they deserved from the labor they contributed. These inequities have endured for decades. In the mid and late 1990s, African American employees brought two of the largest race discrimination class actions in American history against Texaco and Coca-Cola. African American workers at Texaco alleged pervasive discrimination in hiring, promotion, and pay. Texaco settled the class action in 1996. African American employees made similar allegations about unfair hiring, promotion and pay practices against Coca-Cola just a few years after the Texaco settlement. Coca-Cola settled the suit for $192.5 million in 2000.
Hundreds of African American employees filed the race discrimination class actions against Texaco and Coca-Cola. African American plaintiffs have filed individual suits and much smaller class actions in the years after the Coca-Cola settlement, but none of the recent suits come close in size to the Texaco & Coca-Cola actions. The fact that there have been no race discrimination class actions as large as the Texaco and Coca-Cola suits in recent years seems like good news. But the reason why recent race discrimination litigation has shrunk is best explained by the sophistication of corporate employers who learned how to protect themselves from this kind of litigation. Employers are not discriminating less. They are more adept at ensuring that there is no evidence of discrimination. In fact, one of the explicit lessons from the Texaco class action, according to one lawyer writing on the subject, was that corporate employers should not memorialize certain decisions.
A more recent phenomenon that has decimated the economic health of African Americans is the predatory lending that occurred in the first decade of the twenty-first century. State and federal investigations in the U.S. have revealed that mortgage brokers and loan originators targeted people of color for predatory subprime mortgages. African Americans were “four times as likely as whites to pay subprime rates on their mortgages.”[2] Even middle and upper income African Americas were twice as likely as similarly situated white Americans to receive high cost loans, and this occurred even when they qualified for prime loans. African Americans have lost billions during the height of the predatory lending crisis.
Disparities in wealth between white Americans and African Americans have grown in the last few decades even though more African Americans have college educations. For every dollar the median white family owns, the median Black family owns ten cents. Slavery and the exorbitant discrimination that ensued after the institution was abolished explain this wealth gap. Fairness would dictate the payment of reparations for the descendants of enslaved Africans whose uncompensated labor made the U.S. an economic powerhouse. Fairness would require the bailout of African American victims of predatory lending so that they can keep the homes they lose in foreclosure.
Reparations and bailouts for African Americas are extreme and unlikely resolutions for the economic deterioration of the Black community. In their place are tepid reforms such as those found in Section 342 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The Act creates an Office of Minority and Women Inclusion at various agencies including the Securities and Exchange Commission, The Federal Depository Insurance Company and each of the Federal Reserve Banks. These newly created Inclusion Offices are charged with monitoring diversity efforts at federal agencies, the entities they regulate and the businesses with whom the agencies contract. It is not likely that Section 342 will change much of anything. Covered agencies and companies will submit reports about the diversity efforts in which they engage. But diversity efforts do not confront the continuing problems of discrimination and racism. This section of the Act, however, makes it seem as though women and people of color are getting special access and consideration, and the section does not deal with the unique problems that African Americans in financial services have faced. This is most unfair.
[2] Alan M. White, “Borrowing While Black: Applying Fair Lending Laws to Risk-Based Mortgage Pricing”, 60 S.C.L.REV. 677 (2009).