The U.S. Commission on Civil Rights should seek the resignation of the Municipal Securities Rulemaking Board's executive director because under his leadership the beard has failed to appoint a black member, a black investment banker charged.
"In my opinion, the current executive director lacks the vision and leadership skills necessary to create the diversity needed for inclusion." Napoleon Brandford 3d wrote in a Sept. 9 letter to Mary Frances Berry, chairman of the civil rights commission.
Brandford is vice chairman of Grigsby Brandford & Co.
In his letter, Brandford urged the civil rights commission to call for a restructuring of the MSRB and the resignation of executive director Christopher Taylor.
Taylor said of Brandford's letter: "His reaction is similar to reactions we've had in the past when we've taken strong and determined action."
Regarding the fact that the MSRB has never had a black board member, Taylor said: "Ive said, all I want to say on that subject. There are many. groups who want to have someone on
the boardto represent theirview, and the key to this to make sure the rule making process is as open as possible." Taylor- said.
Brandford's letter comes as the commission begins hearings today in New York on the increasing racial tensions in the United States. The hearings will include a session on Wednesday focusing on the finance industry and minorities' access to equal opportunities.
The letter precedes an expected announcement by Securities and Exchange Commission chairman Arthur Levitt of a broad initiative to spur major Wall Street firms to increase the number of minorities in leadership and senior positions.
Brandford also wrote in the letter to the commission that "these comments regarding the executive director are not a personal attack on [Taylor's] sincerity or character, but an assessment of his tenure." The MSRB "is a closed union shop similar to the trade unions of 25 and 30 years ago," Brandford said.
In an interview, Brandford said that a number of black professionals representing municipal issuers have been nominated to the board but have never been appointed. He cited as examples Francisco Borges, former treasurer of Connecticut, and Les Porter, treasurer of the Los Angeles County Metropolitan Transportation Agency.
Brandford said that his name was also proffered as an MSRB board member, but he said he told those who nominated him that he would never be appointed.
MSRB officials confirmed that the board has not had a black member since its inception in 1975.
Copies of Brandford's letter have been sent to the SEC, the National Association of Securities Professionals, members of the House and Senate banking committees, and the Congressional Black Caucus, Brandford said.
Brandford said he may seek congressional action to have the MSRB revamped, possibly to expand its membership and make its dealings more open to members and the public.
In an interview, Brandford said he wrote the letter "because I'm really upset about the way the MSRB is conducting business and how exclusionary it is."
Brandford refused to discuss the MSRB's recently enacted Rule G37, which restricts political contributions by municipal securities professionals. The National Association of Securities Professionals, which represents women and minorities in the securities industry, and others have alleged that the rule disproportionately harms women and minority securities professionals.
"The issue itself is an issue the commission is well aware of," Charles Rivera, a civil rights commission spokesman, said during a telephone interview in New York on Friday.
Rivera defined the issue as "the concern that some people have about a need for more equitable representation in the industry and within the policymaking groups within the industry."
"We're here to find out what the facts are," Rivera said.
Brandford's letter "will become part of the records of the hearing," Rivera said.
In 1992, Brandford raised the issue of no black members on the MSRB board. In a Sept. 8, 1992, article, The Bond Buyer quoted Taylor as saying "I wish I had room for everybody" but that many qualified market participants have not served on the board. Taylor also said it would be wrong to conclude that one group was being singled out intentionally.
The MSRB consists of 15 members: five representatives of bank dealers, five representatives of securities rums, and five public members not associated with a bank dealer or a securities firm. At least one of the public members must represent issuets and another must represent investors. Each member serves a threeyear term.
Annually, the MSRB appoints a nominating committee of six board members, plus three persons from the municipal industry and the public who are not board members. The nominating committee solicits recommendations for nominees and nominates one person for each position to be filled. The board then accepts or rejects the nominees. If a nominee is rejected, the nominating committee must hold another meeting to choose another nominee.
So far, no nominees have been rejected by the board, Taylor said.
"I thought it was an excellent letter," said Alphonso E. Tindall Jr., chairman of the National Association of Securities Professionals. "What he said is true. Clearly there is an underrepresentation of minorities and women in the securities industry ...and on these boards as well."