Chicago Forces J.P. Morgan To Disclose Slavery Ties but Dorothy Tillman Wants Much More
Copyright 2005 Corporate Legal Times Corporation
By: Cathleen Flahardy
J.P.
MORGAN Chase & Co. made headlines in January when it issued an
apology on its Web site. After conducting extensive research, the
financial institution discovered two of its now-defunct predecessor
banks_Citizens Bank and Canal Bank, both based in Louisiana_had allowed
its customers to use slaves as collateral on loans between the 1830s
and the Civil War.
The statement, signed
by CEO William B. Harrison and COO Jamie Dimon, said J.P. Morgan was
sorry for contributing to a "brutal and unjust institution" and
outlined how it planned to repair the damage. But it wasn't out of the
kindness of its heart that the New York-based company owned up to its
past involvement with slavery. The impetus was the city of Chicago.
In
2003, Chicago passed the Slave Era Disclosure Ordinance, which requires
any company wanting to do business with the city to research whether or
not it has ever benefited from slavery. If the company truthfully
discloses its past ties to slavery, the city will not penalize it. But
if the company doesn't conduct the research or lies about what it
found, the city will void any contracts it has with that company and
will not do business with that company in the future.
"Although
one other company had admitted to having ties to slavery, J.P. Morgan's
is by far the most substantive disclosure the city has seen yet," says
Jennifer Hoyle, director of public affairs for Chicago's department of
law. "And because J.P. Morgan satisfied its requirements under the
ordinance, it will not suffer any penalty."
Alderman
Dorothy Tillman of Chicago's 3rd Ward created the ordinance and
introduced it to the Chicago City Council in 2002. "The slave trade and
the way descendants of enslaved Africans in America have been treated
is terrible," she says. "We have a right to reparation from corporate America."
Tillman
isn't the only one who feels this way. Since Chicago passed its
ordinance, Los Angeles and Wayne County, Mich., which includes Detroit,
have passed similar ordinances. And Tillman says New York is currently
looking into implementing a slavery disclosure law as well.
Companies
required to provide disclosures may have their work cut out for
them_especially if J.P. Morgan's experience says anything about the
process.
Skeletons In The Closet
J.P.
Morgan hired Maryland-based History Associates Inc. to look into the
company's history. After 3,500 hours of research in 2004, it discovered
Canal and Citizen served as banks to plantations in the mid-1800s and,
according to J.P. Morgan's apology, the banks "accepted approximately
13,000 enslaved individuals as collateral, and [they] came to own 1,250
enslaved individuals as a result" of defaults.
The
two banks merged in 1924, but that company went under during the
Depression. The National Bank of Commerce in New Orleans, a federally
chartered bank, assumed some of the failed bank's assets in 1933. The
National Bank of Commerce was a predecessor of BankOne, which J.P.
Morgan purchased last year.
"We apologize to the African-American
community, particularly those who are descendants of slaves, and to the
rest of the American public for the role that Citizens Bank and Canal
Bank played," the apology reads. "The slavery era was a tragic time in
U.S. history and in our company's history. Today, J.P. Morgan Chase is
a very different company than the Citizens and Canal Banks of the
1800s."
As a part of its effort to make
amends, the bank announced it would implement a scholarship fund called
Smart Start Louisiana. The company will provide $ 5 million over five
years for full-tuition undergraduate scholarships to African-American
students from Louisiana to attend college in the state. It will also
offer those students summer internships and possibilities for
employment upon graduation.
For the most part, the Chicago community is lauding J.P. Morgan for its disclosure.
"J.P.
Morgan did what it was required to do under the statute," says Jane
McFetridge, a partner at Fisher & Phillips in Chicago. "It was a
very time-consuming and expensive undertaking on its part. And it's an
example of a company being a good corporate citizen."
But not everyone agrees.
On A Mission
According to Tillman, J.P. Morgan was simply fulfilling an obligation to the city. And she wants more.
"Corporate America owes the African-American
people a debt," she says. "And we need to figure out how, collectively,
we are going to rebuild our communities. America will not move forward
without dealing with us."
Tillman says she
has 12 companies that do work with Chicago on her radar that she
believes have ties to slavery. She declined to disclose who they are,
but says she is pressuring them to come clean.
"Most companies in America have some ties to slavery," she says. "So I expect many more will come forward with disclosures."
J.P.
Morgan wasn't the first company in Chicago to disclose its slavery
ties. In November 2003, Lehmen Brothers Holdings, a New York-based
investment banking company, informed the city that three of its
founding brothers in the 1850s purchased a slave named Sally, and they
may have owned more.
But Tillman isn't content with that disclosure.
"I
believe the Lehman Brothers were much more involved with slavery than
they have admitted," she says. "And I think they got their way around
the law." Tillman has implored the company to continue its research.
And she doesn't plan to let up until Lehman Brothers makes an accurate
disclosure, she says.
Tillman believes the
efforts on the part of some companies, especially J.P. Morgan, are a
good start, but they still needs to do more.
"J.P.
Morgan's disclosure is certainly not a victory in what we need," she
says. "We will continue to meet with them and encourage them to put a
national fund together to support all the African-Americans in the United States, not just in Louisiana."
That said, Tillman does commend the company for paving the way for others that must follow in its footsteps.
"What
J.P. Morgan has done is it has told other companies, 'Let's deal with
this,'" she says. "It has set the bar and said, 'We can't run.' They
have started repairing the damage. But they still have more to do."3