Late last year, Harrington Investments President John Harrington filed shareholder resolutions at banks that received billions of taxpayer dollars under the Trouble Asset Relief Program. Congress bailed out the banks because they are essential to the stability of our economy, so the resolutions ask for board committees to oversee US Economic Security. Ironically, Citigroup and Bank of America have petitioned the SEC for permission to ignore the resolutions.
Text of the ViewPoint: U.S. taxpayers are spending trillions of dollars on corporate welfare to bail out financial institutions and corporations. The managers who led those companies were incompetent and overpaid–and now they’ve put our country on the brink of economic catastrophe.
They leveraged massive amounts of borrowed money, engaged in speculative trading and gambled away much of our future and our children’s future.
Two of the largest bank corporate welfare checks have gone to Bank of America and Citigroup; almost a hundred billion dollars. But these financial giants don’t think they have any obligation to tell us how they are spending the money we’ve given them.
Last year, I introduced shareholder resolutions at these two banks, and at Goldman Sachs, to correct that. I wanted them to create what I called “committees on U.S. economic security”. Their purpose? To insert into the DNA of company policy, a fiduciary duty to consider the economic security of the United States when they make banking decisions. A duty to consider how those decisions affect such things as mortgage foreclosures in the U.S., the wages of American workers and how much is reinvested in our country’s economy.
But Bank of America and Citigroup are spending hundreds of thousands of dollars of our taxpayer bailout money on convincing the Securities and Exchange Commission (SEC) to deny shareholders the right to vote on this important issue. They’re asking the SEC for permission to exclude the resolutions from the proxy ballot.
The directors of Bank of America and Citigroup claim that corporate business decisions are better left only to management, and that shareholders should be denied a hearing and vote on the issue. They’re saying it’s none of anyone’s business how they run their financial institutions using our money.
How are they using our money? Bank of America has already spent seven billion dollars of our money to buy almost 20% of the Chinese Construction Bank. This foreign bank is controlled by the Chinese government–a government whose interests don’t necessarily coincide with ours. How does this help the American economy? Why is our money being invested in a Chinese government bank?
The banks say, these and other business decisions they make are “ordinary business” and not a “public policy issue.” Oh, really? Then why did they grab $100 billion dollars of taxpayer money and continue to lobby Congress and the President formore?
Sure, both companies have a fiduciary duty to make corporate policy decisions in the best interest of shareholders. But as long as they’re taking our money, their decisions are a public policy issue of the most fundamental sort — the economic security of the United States may literally become a life or death issue for millions of Americans.
We need to demand, in no uncertain terms, that the SEC recognizes a new day dawning in America–a new day calling for greater corporate accountability and responsibility for corporate managers who spend taxpayer money. The future of our country may depend upon it.
For the Sea Change ViewPoint, I’m John Harrington, President of Harrington Investments.