Wachovia Corporation's ridiculous apology for its alleged ties to slavery has backfired.
Chicago City Council aldermen are vowing to strip from Wachovia a $9.4 million loan to build affordable housing units as punishment for the bank's supposed failure to disclose that its predecessor banks were involved in slave-related business deals.
This serves as a warning to other companies that believe they can buy peace with the slave reparations movement. Wachovia thought it would be good for business to cave in to the demands of reparations activists. Now, not only is the company out of a multi-million dollar contract, it has made itself a fat new target for lawsuits and shakedowns.
The Council's plan to remove Wachovia from the contract was in response to a report the bank released on June 1 in which it disclosed that a total of two banks, out of the 400 acquired or absorbed by Wachovia since 1781, had some ties to slavery. The Georgia Railroad and Banking Company owned 162 slaves and the Bank of Charleston accepted 529 slaves as collateral on loans. In a statement accompanying the report, Wachovia CEO Kenneth Thompson said, "We apologize to all Americans, and especially to African-Americans and people of African descent."
But this did not mollify Chicago politicians. Aldermen charge that Wachovia lied when it filed an affidavit in January initially stating it had no slavery ties. Said Alderman Ed Smith, "People must pay the price for lying and knowing that they're lying.
The problem though is that Wachovia was not lying. Its mistake was to accept responsibility for business transactions conducted more than a century and half ago.
Wachovia prepared the report to comply with a municipal ordinance that requires companies seeking city business to disclose any past ties to slavery. The purpose of the Chicago law, like similar disclosure laws in Philadelphia and Los Angeles, is presumably to set the historical record straight. The corporations are not supposed to be punished.
The reality -- which Wachovia belatedly discovered -- is much more ominous. Disclosure laws enable reparations activists to force money out of corporations through lawsuits or other financial "contributions." One of the justifications for the Chicago disclosure ordinance is to get "information as a preliminary form of discovery in an upcoming lawsuit."
Such lawsuits ignore the fact that slave reparations are without legal merit. Modern corporations can't be held accountable for business transactions of the 18th and 19th centuries. Few companies have records from that period because they are not required to do so. And many of the corporations targeted by activists, like Wachovia, have at best a tenuous connection to the firms involved in the slave trade.
Wachovia should have done the right thing and defended itself against the immoral claim that contemporary companies are responsible for business deals from another era. Instead, it chose to apologize for something it is not guilty of and, in so doing, has cost itself a lot of money.
Wachovia is paying the price for corporate cowardice.
If the bank wants to do business in Chicago again, it will probably have to come up with huge donations to reparations activists.
The purported outrage with Wachovia came not only from African-American aldermen but also from Eddy Burke, the white Chairman of the Finance Committee. Burke is a long-time power broker linked to numerous corruption scandals. A book published last year titled When Corruption Was King, by Robert Cooley, described Burke's alleged indifference to the beating death of a homeless African-American man by white policemen with mob ties. Commenting on Wachovia, Burke stated, "If they think a simple apology...is going to be enough, they've got another thing coming."
Burke is not the only white machine politician playing a prominent role in the slavery debate. In January, when JPMorgan Chase made a similar apology, it was announced by William Daley, who serves as the JPMorgan Chase "Midwest Chairman," a post apparently created for him. Daley is the brother of Chicago Mayor Richard Daley.
The cynical involvement of the Burkes and Daleys, on both sides of this matter, demonstrates that the slavery reparations issue is nothing but a shakedown, pure and simple.
Wachovia's Thompson has done a gross disservice to company shareholders. He should have known that apologizing for past slave dealings would only cause trouble for the bank. When JPMorgan issued its apology, it also promised to establish a $5 million scholarship fund for African-Americans. Reparations activists responded by denouncing the donation as insultingly low.
Thompson is learning the hard way that reparations politics is not about promoting racial justice; it is about money.
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