Well, by the time you read this, Eliot Spitzer will have made a cool $1 billion! And, most impressively, the folks paying Mr. Spitzer the $1 billion will have done so "out of the goodness of their hearts." Guess we all stopped believing in Santa Claus a bit prematurely, didn't we? Want to guess who played Santa this year with Mr. Spitzer? (You'll never get it!) Why it was no one other than America's largest and most prestigious banks!
Those same old conspicuously compensated, shareholder shafting, "customers-to-the-wall" bankers who you've come to know and love ponied up $1 billion in order to keep Mr. Spitzer thoroughly happy. Some sort of CRA project, you ask? Well, not exactly; unless you think CRA stands for Criminally 'Rong Advice (CRA!). You see, Eliot Spitzer is the Attorney General of New York and he's got the banking industry over a barrel-the banks have been Caught Red- handed Again (CRA!).
This time the Corrupt Regulatory Abuse (CRA!) centers around the investment advisory and investment underwriting practices of the banks' brokerage subsidiaries. Seems that the brokerage advice and investment banking activities of these firms were rigged-rigged against the average investor and rigged in favor of corporate insiders and the banks themselves. Of course, the banks haven't actually Confessed to Rigging Advice (CRA!). No, that would not be in keeping with their Cynically Recurring Arrogance (CRA!). The banks simply agreed to fork over $1 billion "to settle the dispute while not admitting guilt." Some how I just can't see my board allowing me to do that, would yours?
Jack Grubman, the investment advisory guru for the telecom industry at Citigroup, may become the poster boy for this latest Calculated Rape of Americans (CRA!) by the banking investment community. Grubman (certainly appropriately named!) earned over $100 million for providing inaccurate, misleading, and perhaps fraudulent investment advice to the public. Of course, when confronted with "these oversights" Citigroup severely punished Mr. Grubman by asking for his resignation, forgiving a $15 million loan, and providing $20 million in severance pay. Can't Really Argue (CRA!) with that kind of decisive action, can you?
Which brings us to the real topic of this little sojourn-Keith Leggett. Mr. Leggett poodles as a columnist for the periodical, ABA Bankers News. In his columns, Mr. Leggett gives guidance to his readership on the ins and outs of the Credit Union Movement. An impartial advisor, of the same ilk as Jack Grubman, Mr. Leggett provides advice pre- tailored to the wants and desires of his paymasters.
Mr. Leggett constantly pontificates upon the unfairness of "the unlevel playing field" and the exemption of credit unions from the Community Reinvestment Act (CRA!). Well first, as you know, CRA was legislated in 1977 only because the banks kept getting Caught Redlining Again (CRA!)-a problem never associated with member-owned credit unions. Given the latest Completely Revolting Abominations (CRA!), Mr. Spitzer can confirm that much more work needs to be done in the banking industry on "doing the right thing" before credit unions ever come up on the CRA radar screen. For whatever reason, banks just Can't Resist Avarice (CRA!).
But, CRA aside, it's Mr. Leggett's "level playing field" whine which really is the most incredible, most insolent, and most insulting. Clearly, if "the field needs to be leveled," there are always two ways a re-leveling can be achieved-one can either raise the low side or lower the high side. As Mr. Spitzer and the latest banking fiasco demonstrate, banks aren't on the level; credit unions are!! And, as credit unions, if the field needs to be leveled; we certainly don't want to be dragged down to Mr. Leggett's level. It's not our standards that need to be raised. Perhaps Mr. Leggett's preaching would be more effective if he turned and spoke to his own choir. But, then again, perhaps like Mr. Grubman, Mr. Leggett's conscience has already been paid and spoken for!
Three final thoughts. Wonder just how much the banks would have had to pay if they were really guilty? (Read that one again slowly!) Let's not invite Mr. Leggett to any more credit union meetings unless he's coming to publicly apologize for his masters' misdeeds (unless of course he endorses and supports such corruption!). And lastly, for Mr. Leggett, let's cut those "CRA pleas" (CRAP!); ya'll are already up to your eyeballs in enough "stuff"! Just ask your buddy, Grubman.
Jim Blaine is president of State Employees Credit Union. Mr. Blaine can be reached at P.O. Box 27665, Raleigh, NC 27611.
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