http://www.washingtonpost.com/wp-dyn/articles/A18709-2005Mar8.html
'Rendition' Realities

By David Ignatius
Wednesday, March 9, 2005; Page A21

Torture is immoral and illegal, and the refusal to allow cruel interrogation techniques is one measure of a civilized society. But this ironclad moral argument doesn't necessarily apply to the practice known as "extraordinary rendition."

Rendition is the CIA's antiseptic term for its practice of sending captured terrorist suspects to other countries for interrogation. Because some of those countries torture prisoners -- and because some of the suspected terrorists "rendered" by the CIA say they were in fact tortured -- the debate has tended to lump rendition and torture together. The implication is that the CIA is sending people to Egypt, Jordan or other Middle Eastern countries because they can be tortured there and coerced into providing information they wouldn't give up otherwise.

The problem with this argument is that it assumes that the CIA believes that torture works. But in 30 years of writing about intelligence, I've never encountered a spook who didn't realize that torture is usually counterproductive. Professional intelligence officers know that prisoners will confess to anything under intense pain. Information obtained through torture thus tends to be unreliable, in addition to being immoral.

The unreliability of torture as an interrogation technique was conveyed powerfully by Jane Mayer in an article in the New Yorker last month. She cited the case of a Syrian-born terrorist suspect named Maher Arar, who was seized at New York's John F. Kennedy Airport in September 2002 as he was traveling back to his home in Canada. He was then sent to Syria under the CIA's program of "extraordinary rendition" and, by his account, whipped repeatedly on the hands with two-inch-thick electrical cables.

"Although he initially tried to assert his innocence, he eventually confessed to anything his tormentors wanted him to say," wrote Mayer. She quoted Arar as explaining his false confession this way: "You just give up. You become like an animal." The Syrians eventually concluded that Arar was innocent. He was released without charges.

Such stories rightly shock the conscience, and they make you wonder how anyone could ever advocate rendition. But in conversations over the past several years with senior CIA officials and the heads of several Arab intelligence services, I've heard explanations for why the practice is used. These arguments for rendition at least ought to be understood as Congress and the public struggle with the moral issues involved.

What's gained by transferring a prisoner to his home country for interrogation is emotional leverage, according to Arab and American intelligence chiefs. A hardened al Qaeda member often can't be physically coerced into giving up information, no matter how nasty the interrogator. But he may do so if confronted by, say, his mother, father, brother or sister. That family contact is possible if he's near home; it's impossible if he's in an orange jump suit and warehoused at Guantanamo Bay.

I asked the head of an Arab intelligence service once about the widespread belief in his country that prisoners were tortured. People sometimes referred to his headquarters as the "fingernail factory," I said, because they assumed that vicious methods were used, such as ripping out prisoners' nails. This official insisted that torture didn't work. He cited cases in which prisoners had been broken through softer and more clever measures -- applying family pressure or, in one remarkable case, ignoring a defiant, self-important prisoner until he all but demanded to be questioned.

The head of another major Arab intelligence service explained how his men cracked an al Qaeda suspect who had refused to talk to the Americans; their main "weapon," he said, was that they prayed five times a day in the man's presence.

These "nice" interrogation stories don't change the fact that hideous methods have been used in rendition cases. And in some instances, the CIA should have known that torture was likely -- and stopped it. That's wrong; no agency of the U.S. government should ever turn a blind eye to torture. But I think you can oppose torture and still find circumstances where rendition might be appropriate.

Before you make an easy judgment about rendition, you have to answer the disturbing question put to me by a former CIA official: Suppose the FBI had captured Mohamed Atta before Sept. 11, 2001. Under U.S. legal rules at the time, the man who plotted the airplane suicide attacks probably could not have been held or interrogated in the United States. Would it have made sense to "render" Atta to a place where he could have been interrogated in a way that might have prevented Sept. 11? That's not a simple question for me to answer, even as I share the conviction that torture is always and everywhere wrong.

davidignatius@washpost.com

Jackson Calls for Changes to Visa I.P.O.March 5, 2008, 1:25 pm
At more than $17 billion, Visa’s initial public offering is expected to be the largest ever in the United States. Along with that comes a wealth of fees for the banks underwriting the credit-card giant’s offering — and a prominent voice is calling for a change in how those fees are doled out.
The Rev. Jesse L. Jackson has urged Visa to give minority-owned investment banks a greater role in the underwriting process, along with a bigger share of the fees that would bring. But he hasn’t stopped there. Mr. Jackson has also reached out to JPMorgan Chase and the heads of Congress’ finance and banking committees, and he plans to raise the specter of Congressional hearings to look into the matter if action isn’t taken. (Read the letters here, here and here as PDFs.)
“We deserve to be a bigger part of this deal,” Mr. Jackson told DealBook in a telephone interview Tuesday, after he had touched down in Texas. “We’re being locked out of access to capital.”
Made through his Wall Street Project, Mr. Jackson’s efforts are part of his effort to increase minority participation in high finance. He told DealBook there is a need to increase minorities’ “access to capital,” which he argued could not happen if minority-owned firms did not receive opportunities like plum positions in the Visa stock offering.
Visa plans to sell 406 million shares for $37 to $42 each. Analysts have said they expect the company’s offering to perform even better than that of MasterCard, the longtime Visa rival whose stock has skyrocketed 408 percent since it began trading two years ago.
That could mean huge fees for Visa’s 41 underwriters, whose top ranks are dominated by the member banks who currently own the credit-card company. Underwriters have charged as much as 7 percent in fees for I.P.O.’s, according to Bloomberg News, although that percentage usually goes down for larger I.P.O.’s.
Mr. Jackson cites $370 million as the expected proceeds from the Visa offering, or about a 2 percent fee.
JPMorgan and Goldman Sachs are listed first among the top tier of bookrunners. Four minority-owned firms — Gardner Rich & Company, Guzman & Company, the Williams Capital Group and Utendahl Capital Partners — are listed as underwriters, though they are clustered at the bottom. They are smaller than most of the firms above them, ranging from Citigroup to Mitsubishi UFJ Securities to Fox-Pitt Kelton.
Three other minority-owned firms are part of the group working as selling agents on the offering.
A person familiar with the matter told DealBook that Visa held discussions early on about including minority owned firms in its underwriting syndicate.
Last Friday, Mr. Jackson sent letters to James Dimon, JPMorgan’s chairman and chief executive; Senator Christopher Dodd, the Democratic chairman of the Senate Banking Committee; and Barney Frank, the Democratic chairman of the House Financial Services Committee. All of the correspondence hits on the same point: that just as Visa has included its member-bank owners as underwriters in its stock offering, so too must it include representatives of the users of its credit card.
Mr. Jackson told DealBook that blacks and Latinos comprise about 35 percent of Visa card users. Visa said it could not verify that figure because it does not keep such statistics.
Mr. Jackson calculated that firms owned and run by those groups will receive just $1 million, or 0.3 percent, of the total underwriting fees.
“There must be some sense of ‘equanomics’ in the I.P.O. deal — where the representation of minority investment banking firms compares favorably to our consumer use of credit cards,” Mr. Jackson wrote in his letters.
How much does Mr. Jackson think is fair? Asked that question by DealBook, he replied, “About 10 percent.”
If changes aren’t made to the underwriting structure, Mr. Jackson said he will call for Congressional hearings to look into potential discrimination against minority-owned firms on Wall Street.
A spokesman for Visa declined to comment, citing the company’s regulator-mandated quiet period before its public offering. A spokesman for JPMorgan declined to comment.
– Michael J. de la Merced
61 comments so far...
1.
March 5th,20082:27 pm
is this is even worth reporting? there’s a reason why goldman et al. are that the top: they have the best people. it doesnt matter if youre black or white or green, if you’re good you’ll end up at a top firm, and that’s where the business should and does go.
— Posted by hms
2.
March 5th,20082:29 pm
Not all firms are created equal in terms of experience and reputation. It’s ridiculous that the issue of race is being questioned, especially when the deal is being underwritten by publicly traded banks who have broad ownership. Capitalness is not suppose to be fair. If the bank in question can provide superior service, then it should receive a portion of the deal.
— Posted by kat
3.
March 5th,20082:42 pm
I agree with kat.
Goldman Sachs, Bank of America, JP Morgan, Citigroup, are all owned by minorities. “The smallest minority on Earth is the individual.” - Ayn Rand.
— Posted by John Galt
4.
March 5th,20082:55 pm
Boy, JJ is reaching now!! like 1 & 2 mentioned, this is a bunch of croc! The minorities are not closed out of working for any of the banks leading/co leading the offering?? Banks spend an inordinate amount of time & energy recruiting minorities out of good schools, something I know first hand from helping some of my minority class mates realize that it (active minority recruitment) was an opportunity not a swipe at their intelligence.. Any who, when did Capitalist America become communist.. give everyone their share no matter what you do..
Plus the banks make money because they are able to price & place an offering - lets see how many of the minority firms can sell this big an offering?? How deep is their roster of clients.. dont you build a roster as you grow as an organization?? I cant even think straight and write a comment - am so enraged.. looks like JJ is doing someone’s bidding
And Minority owned? what the hell.. all the banks involved in the larger part of the deal are public shareholder owned.. minorities and majorities alike..I wouldnt want my returns from the investment in a bank as a shareholder, given away to someone else just coz they are minority!!Talk about silliness of what JJ is asking..Plus its like he is asking for money from Visa IPO for his minority friends and saying ohh i help screw visa all the time when i investigate them in congress!!Strange times!
— Posted by Poison
5.
March 5th,20084:30 pm
This is supposed to be merit-based and color-blind. The Wall Street houses are made up of an agglomeration of Italians, Irish, Jews, Hispanics and many others all of whom are minority groups of their own, and the “owners” of the firms are investment and pension funds representing a broad cut of rich and not-so-rich from both America and the rest of the world.
So it seems to me is that all Jesse wants to do is take from Peter to pay Paul (who Jesse feels doesn’t need to earn it) by hiding behind Paul’s cause which also in many respects is also Peter’s.
This is why we created the government and Congress not Wall Street and business. Jesse is knocking on the wrong door. For the words “reached out” applied to his approach to JPMChase et al, I would substitute the words “tried to blackmail”.
— Posted by Hank
6.
March 5th,20084:34 pm
I agree 100% hms. Somethings are not call for. At the end of the day it’s based on numbers any way
— Posted by Lashun L.
7.
March 5th,20084:47 pm
I hate it when people try to play the race card to get a handout without work involving money. These mandates are won by competence, merit, relationships, or a combination of all three, among other things. What color your skin is has nothing to do with this offering. Giving a larger % of fees to a minority-owned business goes against everything that is considered “FAIR” and penalizes those firms (and their own employees and shareholders which include countless blacks, indians, hispanics, asians, women, etc) for their hard work and reputation. Jesse’s proposal is truly pathetic, and in a way, sets back those he “represents.”
— Posted by jj
8.
March 5th,20084:47 pm
Jesse - based on your “equanomics” argument, maybe you should help minority-owned firms get involved with this Friday’s Ambac deal, instead of just cherry-picking the “hot deal”?
— Posted by Ed O'Connor
9.
March 5th,20085:02 pm
Maybe Jesse Jackson should help minority-owned firms get involved with ALL new issues instead of just trying to cherry-pick the “hot” deal? I’m sure the Ambac underwriters wouldn’t mind some help later this week!
— Posted by E$
10.
March 5th,20085:21 pm
As a Hispanic that works at a top tier investment bank I can’t help but see both sides of the argument. Yes Goldman, JP, UBS are great and are at the apex of financial services but reality is that not all investment banks area created equal. Minority owned banks don’t have to be main managers in these deal but quite frankly truth is that I know they can at the very least handle being jr. managers (third tier), and honestly is that really to much to ask for? Guess so.
This is just another situation where money gets unequally dispersed in the financial world and just contributes to the growing economic gap that is rapidly affecting this country.
Jessie is being nice by estimating a $350 million payout in fees to the firm participating in the deal. It should be at least $700 million, the fact that less than half of a percentage point is getting redistributed back to minorities when VISA has shackles on minorities with their high APR rates and conniving tactics to keep money from us is a true representation of modern day corporate tyranny.
— Posted by Juan
11.
March 5th,20085:36 pm
Why is this even an issue? These tiny minority banks don’t have the capital to commit to even underwrite “third” teir levels. Does this guy think that somehow these no name banks will magically have a few billion to spend on trying to underwrite one IPO and the ability to hold it on their books if they can’t sell?
The man is a complete idiot
— Posted by James
12.
March 5th,20086:07 pm
What it is stupid about this is that Jesse Jackson and others don’t realize that Visa and Mastercard aren’t the ones charging high APRs because they are an electronic transcation system that charges a fee to the vendor(McDonalds, etc) every time a credit card is used to purchase an item. The firms that are charging the high APRs are the same consumer finance arms of the same investment banks (JP Morgan) on the list.
Jesse Jackson should just let the best firms win in any IPO, which may or may not be minority-owned
— Posted by Stupidity
13.
March 5th,20086:44 pm
This is absolutely idiotic. So now the economics of IPOs have to be divided based on the racial profile of the customer base? That doesn’t even make any sense. The companies with the balance sheets to accommodate this large offering are publicly owned, so how do we count their proportion?
I don’t even know where to go from there - there are just too many reasons to disagree with him.
— Posted by JF
14.
March 5th,20089:10 pm
Rev.Jackson is a serial extortionist.
— Posted by tc
15.
March 6th,20089:09 am
What little respect I had before for Jesse is now down the drain. I could understand if these minority owned firms were anywhere near the same class as the lead-underwriters and they were being shut out. Sounds like there hasn’t been enough to keep him busy so he is now creating issues.
— Posted by JP
16.
March 6th,20089:24 am
Jesse Jacksonism is the reason so blacks got ripped off with subprime mortgages. Lenders realized they could turn false accusations of redlining into massive profits by peddling inappropriate mortgages to the unwary.
— Posted by MARK KLEIN, M.D.
17.
March 6th,20089:46 am
Jesse is an economic idiot as well as being a serial extortionist as TC writes above. He’s always looking for someone else to “give” without the recipient earning it. Oh, by the way, anyone care to acknowledge how JJ managed to procure a highly lucrative beer franchise in Chicago for his son Yusef? Easy guess!
— Posted by Thomas Rash Jr
18.
March 6th,20089:55 am
He is just trying to be a good activist. This underwriting deal is nothing more than just a profit crabbing opportunity. Admittedly, I don’t even think investment banks are deserved to carve out such big profit from an IPO. Wealth should be distributed more equally, but I am not sure Jesse’s method would actually enhance poor minority since it would probably only provide an advantage to wealthier blacks and hispanics.
— Posted by WS
19.
March 6th,200810:09 am
There will be no reaction to JJ. He has become irrelevant.
— Posted by J-Man
20.
March 6th,200810:13 am
When small companies go public, underwriters dictate the terms. In this case, however, Visa makes the final decision on everything because everybody wants in. It’s almost like a give away ; and it’s immoral not to disribute fairly.
— Posted by mario
21.
March 6th,200810:49 am
I used to respect Jesse 10 years ago; lately he’s just annoying. The Visa IPO is touted to be the biggest in history, so how is a small “black” owned shop suppose to “help” underwrite this? It just doesn’t work. And these “white” shops are all publicly traded anyway.
— Posted by rob
22.
March 6th,200811:35 am
People fail to realize that Visa is owned by its member banks, of which the 3 largest are JPM, BofA, and Citi. These are the owners (owned by a large, diverse set of shareholders, not a select, already wealthy few like these minority-owned ones) that dictate the terms, and they are choosing other underwriters strictly based on merit and whether the bank can handle an underwriting of this size. Deals like this should be distributed FAIRLY, and as it stands now, it is being done so. To include a bank that doesn’t have the scope nor manpower to be a part of this offering, but because they are minority-owned they are allowed, is so bigoted, so unfair, so screams of communism, it’s sick. Even minorities think Jesse Jackson is a joke, and he barely even registers with the masses.
— Posted by maz
23.
March 6th,200811:56 am
Jesse Jackson’s rationale here, and the bailout proposals for irresponsible mortgage borrowers are both examples of the nonsense that passes for reasoning these days. Charitable giving to the truly needy yes! Handouts to citizens as some kind of socialized balancing act - no!
— Posted by Ria Rhodes
24.
March 6th,200812:23 pm
Seems like Green Mail — the nasty tactic that some corporate raiders used a few decades ago to get companies to buy them out to stop being a pest. Don’t we have securities laws against Green Mail?
— Posted by Quin
25.
March 6th,20081:14 pm
Jesse is back to his old game–blackmailing deep pocket corporations. This is the way he bankrolls his organization and in the process fills his pocket. I would love to see someone or corportation stand up to this pseudo do-gooder and shut him down.
— Posted by W Bigelow
26.
March 6th,20081:36 pm
This is an old trick for Mr. Jackson, he pulled the exact same extortion stunt with the underwriters of the UPS IPO in 1999. The slight difference there was that Jackson claimed minority-owned investment banks were entitled to a share of the underwriting fees because a large portion of UPS’s employees are black (rather than customers in this case). Basically what happened there was that UPS and the bookrunners caved after Jackson threatened a boycott and allocated some of the shares to black-owned banks; problem was that they didn’t have an adequate distribution network to place the shares, so MS, GS and Merrill just sold the shares themselves and gave away the spread to the black-owned firms. If history is any indicator, what Mr. Jackson is asking here is for publicly-owned investment banks literally to give away free money to “minority-owned” investment banks (read: privately-held firms owned by wealthy black investment bankers) in return for no sales effort, research coverage or capital risk. Whoever labeled this as “pathetic” in a previous comment was spot on. And what is he talking about being “locked out of access to capital”? That doesn’t even make sense — Visa is the one here seeking access to capital and they are having no problem with that. The black-owned investment banks are being locked out of a free ride, and in my opinion that seems pretty fair.
— Posted by D
27.
March 6th,20083:25 pm
Thankfully a few people here have already posted the real truth about Jesse Jackson; that he is nothing but an extortionist. Why anyone would actually spend the time analyzing his thoughts on underwriting is beyond me.
— Posted by S
28.
March 6th,20083:29 pm
Any scheme that robs Peter to pay Paul - can always depend on the support of Paul. (Apologies to GBS).
— Posted by Matt R
29.
March 6th,20084:01 pm
watch for a Jesse son get a new bank charter with gov. accounts. —This Buds for you.
— Posted by Dushan Lipensky
30.
March 6th,20084:51 pm
Jesse & Al Gore - two con men . Maybe Jesse should also go after Al’s IPO profits
— Posted by John Patulak
31.
March 6th,20085:10 pm
Sometimes I wonder if JJ is not secretly paid to undermine the progress that minorities (which basically means blacks as far as he is concerned) have made in this country. Every time he comes up with an idea like this, it gives more ammunition to those who say that minorities are lazy aren’t capable of doing anything, but complaining and asking for handouts.
— Posted by Steve N
32.
March 6th,20085:21 pm
Maybe I can get Jesse Jackson to get me some free money too!
— Posted by Eddie
33.
March 6th,20085:45 pm
Minority underwriters should have a seat at the table. If we were color blind they already would have that seat.
— Posted by Black Man
34.
March 6th,20087:43 pm
looks like jesse jackson is looking for his usual pay off…..
— Posted by plang
35.
March 6th,20088:43 pm
This is such a silly premise. I 100% agree with the first poster.
Making a life out of doling out normative statements will offer much less financial return on your social economic ‘investment’ in life than rolling up your sleeves and really doing something with yourself.
— Posted by Oh, good grief
36.
March 6th,20089:30 pm
This sounds like another shakedown by the Reverend Jackson.
— Posted by Rocky
37.
March 6th,20089:38 pm
As a MINORITY owner of Citi (a small number of shares owned compared to shares outstanding) and a Visa card holder, I think I should get a larger chunk of the underwriting fees even though I cannot place a single share.
A couple thousand should get me to go away and not call foul.
— Posted by chris
38.
March 6th,200810:12 pm
I’m so frustrated with this clown to point where I almost use my real name- that’s how strong I feel about this issue/article.I’m an African American and I’m SICK OF Mr. Jackson perpetual sophisticated pinstriped suite wearing welfare dependent tactics. geeze Jesse..do you ever work for anything? Why this made front-page NY Times magazine…is it to denigrate those of us black who are out there everyday working and struggling to make a living and NOT buying into this constant begging for corporate and state assistance?Jesse, why not you change your tune and look to pool all the billions of dollars generated by all the millionaire blacks and invests it in Africa? for once in your life man, lift a feather and break a sweat…stop the begging..its demeaning to the race and you are starting to sound and look like an agent for the “keep down of African American”
— Posted by Rupert
39.
March 6th,200810:13 pm
Really Really Sad………………..98% of you guys just trashed this issue and then go on and blame Jesse Jackson for his opinion.
These are the reasons why the things that happen in America do happen.
I can’t help but laff at a message on this board about JPMorgan and Goldman being the best firms and that is the reason why they got to lead the IPO. Nonsense
As an investment banker, I know that a lot of these lead roles are won based on relationships and then ability to deliver. These firms have developed the abilty to deliver over time because they got the opportunity to participate in such transactions.
I totaly subscribe to the point of merit being the main measure for appointing underwriters. However, several minority owned firms don’t even get the opportunity to be evaluated on merit, let alone compete for this transactions.
I believe the reason for this is because such large corporations are run by people that look different from minorities and CEO’s most of the time will only give such sensitive and complex business to people that look like them
No matter what anybody says on this board, until we all see beyond color (myself included) we will continue to post on this board regarding issues like this.
— Posted by AJ
40.
March 6th,200811:44 pm
Jesse Jackson doesn’t deserve to be quoted in an article in the NY Times. Let me get this straight, the owners or partners in these minority firms pay Jesse Jackson some money to lobby or shall we saw threaten, in order to get higher % of the underwriting fees. Goldman, Chase, Citi, whomever all employ minorities at their firms and those partners will share in the windfall of the fee’s.
Jesse is advocating for some smaller group, not as experienced at raising capital, because that will line his pockets.
HE IS A JOKE
— Posted by Absurd
41.
March 7th,200812:24 am
When is Jesse going to get more whites playing in the NBA?
— Posted by john d
42.
March 7th,20083:51 am
Absolutely, minorities ought to get a much larger slice. And please, spare us the adulation for goldman, citi. ubs. et. al. Hopefully the next president will arrange cells for executives of each of these firms.
— Posted by mikeinva
43.
March 7th,20084:58 am
I think the phrase you’d use over that side of the Atlantic is “what a load of baloney!”. As a black person I am astounded by mr Jackson’s actions (I don’t believe he deserves the title). “Black owned” banks are owned by a very small minority - rich black people. Public banks are owned by lots of shareholders everywhere - anyone with some cash can buy a stake.
On the logic side, does this mean that all future goods / manufacturing IPOs will have to be done in Beijing ? Oil companies will have to list in Dubai (or Alaska, or the bottom of the North Sea). Baloney is not a strong enough word for it.
Helping a few rich “minority bankers” get even richer, while furthering the prejudiced view of minorities as hand-out-seekers, helps nobody - except JJ and his little clique of friends. I suppose without racial division and disharmony he doesn’t exist, so stirring up stuff is job security for him.
— Posted by Lew from York, UK
44.
March 7th,20086:46 am
This is a typical Jesse Jackson ploy. He started barking big about all the beer sold in slums to blacks and the damage it did years ago. Budweiser gave one of his kids a beer distributorship and he moved on to other injustices.
My guess is he’s got some friends and family lined up. If Visa gives them 10-20 million under some pretext, Jackson will stop barking.
The only thing that bothers me about this is he sees himself as ‘a man of god’ instead of a typical business-political shake-down hustler. Chicago is full of them.
— Posted by Global_Viewz
45.
March 7th,20088:00 am
Jesse Jackson should be ignored as he is nothing more than a fraud, a huckster and a shakedown artist who uses race to extort money for himself. Who is paying him to say this? I would not be suprised if there is some cash in it for him.
This male (Jesse Jackson), I cannot call him a man, lectures kids to not have children out of wedlock, yet fairly recenty fathered a child out of wedlock and committed adultry. Obama is a rejection of all Jackson represents. Jackson’s legacy will be that of Ronald Agipo Smithstone — he will have none.
— Posted by Lyle Vos
46.
March 7th,20088:24 am
Each vis cardholders should given achance to hold small# of shares at a discount price whereby holders who supported the visa so long has more interest in the new investments.
— Posted by bhupendra darji
47.
March 7th,20088:56 am
I’m sure that none of these underwriters have a financial connection to Mr. Jackson.
He’s a flim-flam man of the first order.
— Posted by Oprah
48.
March 7th,20089:19 am
and if we’re going to do this why don’t we mandate the bulge-bracket firms have a minimum percentage of minority employees working on the deal?
it’s akin to mandating minority-controlled firms must get a certain percentage of the fees for every GE deal because minorities buy a lot of appliances and watch a lot of NBC. dumbest thing i’ve ever heard.
— Posted by as
49.
March 7th,20089:21 am
Jesse has no business in business…..get a real JOB!!!!!!
— Posted by Gordon Gecko
50.
March 7th,20089:22 am
On the face of it, the Visa IPO looks like good business. The question is for whom? When one looks at the changing global dynamics in the finance industry, it would seem that Visa would be smart enough to solicit “minority” bankers to represent them in places like Abu Dabai, South Africa, and Kenya. Time will tell…
On another note, there is a practice in the banking industry called “tying” where banks are required to give corporations below market rate (sub-prime) loans and in exchange the issuer allows the bank to participate in the underwriting syndicate and earn fees. This is also called a loan facility. This loan facility is usually $50MM to $200MM, way outside the reach of most minority banking firms.
The major problem is that the practice is marginalizing at best and, over time, it leads to a “closed syndicate” reality for most minority bankers. Some legal experts have even said that this “tying” practice may be illegal. Some have equated this to the poll tests that required a person to know how many bubbles we re in a bar of soap before they could vote during the Jim Crow era.
Yes, Jesse Jackson seems to be going off half cocked again. However, please tell me how to break the ties that bind us in the banking industry?
— Posted by Tigerpaw
51.
March 7th,20089:31 am
Jesse Jackson is clear on the issues and understands how these things work. I also appreciate the fact that he is not afraid to raise these concerns. Blacks have been kept out of the wealth acquisition process in this country for far too long. Those of you that dont understand why Jackson is raising this are so clueless, that you probably think racism ended in the 60s. Get a grip on reality.
— Posted by I Am Clear
52.
March 7th,20089:34 am
Will this guy’s tune ever change?
“We can’t do it, so you have to give it to us.”“You have it, but we deserve it.”
Does anyone have a tally on the cost of reparations? If we just payout some $ can everyone shutup about this sort of thing after that?
In five years the money will be back to it’s previous owners anyways.
— Posted by WizBuzz
53.
March 7th,20089:40 am
Dr. King said he wanted evaluations based on “content of character” and NOT “color of skin”. How is it that this has somehow been entirely bastardized into “color of skin” being the single requirement for inclusion in anything?
— Posted by Carl La Fong
54.
March 7th,200810:22 am
As a former IB who is Latino and been around the block a few times, my thinking is that most of the bloggers are missing the point about Mr. Jackson’s goal. No, I’m not a Jesse lover nor do I subscribe to his approach of what some of you have dubbed as “extortionist” and “black-mailing” tactics; the one label missing is “domestic financial terrorist.” The issues here are about parity, opportunity, distribution of wealth as well as competency, fairness and experience. I believe what he is pursuing is to open the door more for emerging IBrs so that they can build a track record and become a gs, citigroup, etc. to take down deals of any magnitude. And yes, for these firms to become wealthier by taking lots of more risk.
I was provided such a opportunity early in my career when there were at most 8 Latino corporate and municipal IBrs in California. Today, there are at least 1,500 nationwide whom either work for an IB firm or have their shops. Recalling the 70′ and 80′ and part of the 90’s, this is not about Mr. Jackson’s obsolescence or level of intelligence. In my view is about how the non-stream IBrs can access opportunities to enhance their experience to underwrite part of large deals. My understanding of the business and which is not well explained in the article is not that he is asking for fees for minority IB to do nothing but to allow African American IBrs to be part of a syndicate or a group of firms getting together to underwrite a greater portion of the Visa deal and share the fees proportionately. At least that is what I understood at first glance. What he gets in return for taking such a position or suggesting that he will “politicize” the issue of equal or improved access to deals is inconsequential in the world of high finance. Besides, I do not see or hear anyone including African Americans and Latinos rising to the occasion other than selected minority fund managers and IBrs that appeared before Congress to testify against legislation calling for increasing taxes on the gains of equity firms because the potential negative impact on minority investment firms and their clients. I do not see the Marathon Club —a group of minority (mainly African American) investment professionals nor the New American Alliance—a group of Latino professionals in high finance—publicly advocating for parity in accessing deal making opportunities. This is truly sad but that is the reality for now.
— Posted by sir xuy
55.
March 7th,200811:47 am
Of the first 52 posters, 48 agree that Jackson is an idiot (add me to that group), 2 disagree, and 2 seem to be undecided. It looks like this is one of the few issues where Wall Street shows more common sense than Main Street.
— Posted by John Q. Public
56.
March 7th,200812:03 pm
Enough is enough… I’ve been in this business over 10 years now, on both retail and institutional sides of the fence. And the folks that are of the majority race in this country still just can’t seem to grasp the fact that minorities are STILL (in 2008) excluded, disproportionately, from participation in matters of “high” finance.
Just so you know… having minorities as clerks, janitors, or paper shufflers doesn’t make a company diverse. It only makes them politically correct. What about board positions, upper management, handling major transactions?
Is it Not acceptable for minority firms (that are FULLY qualified) to seek inclusion in underwriting a major offering? It appears that even Visa overlooked that one.
The remarks about getting a free-ride are just plain stupid. minority owned firms have capital, publish research, and have significant sources for distribution of shares as well. I’m quite certain they only want to get paid for what they sell and not just collect the “spread”. Its obvious that most of you weren’t aware of that though. Ignorance is bliss huh?
Is it Not acceptable for minority owned firms to want a greater than .3% role in a consumer products company’s IPO, when its own demographic is a major contributor to that company’s bottom-line? As much as 20% when accounting for credit card/debit transactions. I won’t even mention the processing fees, earned by Visa, that minority-owned businesses generate.
Is it Not acceptable for minority owned firms to want a greater role in the IPO of a company that claims to have diversity? Don’t just talk about it, actually do it! Top to bottom.
The attacks on Jesse Jackson are ridiculous. If anyone is to blame for him existing, and pushing for greater participation for minorities, its the “majorities” that make the decision to try to keep minorities in the minority position. Lobbyists, lobby every single day! Only I don’t think he’s paying off rogue politicians. But they do.
One other issue to note is that I’m quite certain that the major banks on this transaction had some input on how much “competition” (oops, did I say that) they would allow into “THEIR” deal. I mean when you consider all the write-downs that they’ve been doing, it only makes sense for them to want to keep as much cash as possible to feed themselves, right? Nevermind that they’re gonna make $5B+!
Its really time-out for the, “its-okay-for-them-to-shine-our-shoes”, “clean-our-bathrooms” mentality. But I understand that money is POWER, and with it minorities can unapologetically make changes without anyone else’s consent. That’s obviously ruffling a lot of feathers!
One last thing…For those of you that don’t think that racism exists in out business, keep reading…While working for a top 5 investment banking firm, I overheard the branch manager tell the training manager, “you need to hire more people that look just like you”, while simultaneously slapping his bare wrist. I couldn’t believe my ears! So I decided to ask the training manager myself, just for confirmation. I wasn’t wrong. This was a direct order to stop hiring minorities. In addition, the training manager was denied the ability to partcipate in a job fair sponsored by the NAACP. By the way, 1 year later, most of those hired had been pressured into resigning for various reasons.
Still don’t think minorities are excluded in this business? I guess a better question would be… Do you really care?
— Posted by Stocks1
57.
March 7th,20081:31 pm
I wonder what Barack Obama’s position is on this matter? Jesse Jackson has been an advocate of Obama, speaking on his behalf on many news talk shows. He has claimed only Obama can bring a “true sense” of change to America, a change of politics and reforming Washington and our country’s banking institutions to get us out of our current recession.
Will Barack take a similar position where IPOs similar to Visa are required to dole out chunks of their capital from a bank or business owned entirely by a minority-majority of its shareholders? How will this increase are economy and make it stronger if we simply give some companies a free ride due to minority status?
If Obama does feel similarly to Jackson, which given his extreme liberal voting record in his short tenure in the Senate, I cannot imagine how this could possibly help our country restore its economic vitality and stability. Such practices and policy would just further cause us to go into deeper recession, but voters who support Obama will be grateful for his commitment to hope and passion as they’re left counting the coins in their pocket!
— Posted by Jim
58.
March 7th,20081:52 pm
Handouts? So, if he were walking around with a gun and pretending to be Marcus Garvey that would be better? What should one do when blocked at every professional turn? Should minority bankers wait for Goldman or Citi to say that we have earned the right to participate? If so, why not now? What are the objections today? Handouts indeed. I am glad that Revered Jackson has the courage and the sensibility to request what should be a regular part of business. How does a smaller bank (minority or otherwise) participate in the Visa IPO? Is it okay to be locked out forever?
There are different levels of participation in underwriting syndicate and you have to have expereience at each level before graduating to the next level. Essentially, from lowet to highest, there is the selling group level, the co-manager level, the senior manager level, and the lead manager level. The lower the level, the lower the fees or pay for the firm.
In particular, the selling group level really gaurantees no fees unless the firm sells bonds and then they only get the selling concession. This is where minority firms get stuck.
Alas, even if one were to provide the loan facility that most issuers require, there is still no gaurantee that the issuer would include a minority bank. What about their niece who works for Goldman and needs to buy a new house in the Hamptons?
Handout indeed.
— Posted by Tigerpaw
59.
March 7th,20083:24 pm
Syndicate participation, today’s world is based on your relationship with the lead managers. The leads ask their friends to participate, broken down institutional, retail, regional and other lines. It so happens that with the growing numbers of minority consumers , this is an appropriate niche to market to. The question is if its an attractive investment, would a large white orgainization consider the minority market as large enough or attractive enough to pursue. For precisely the reasons so many of you argue against minority participation is why it makes sense to include them. The issuer wants buyers that are familiar with the company(they are likely to be inclined to pay more and they are not as hard to sell to). At the end of the day stock issues that find their way into the hands of long term knowlegeable owners are much better customers than a growing universe of large instituitional buyers(like hedge funds) that look to make a point or two and move to the next on, there by not helping the price support of the issue. In the further it would be nice to see comments from knowleageable people that understand the situation and that make judgements based on the message not the messenger .
35 years in the business
— Posted by Al
60.
March 7th,20083:48 pm
I have worked in investment banking for numerous years and some of you people are in such denial about how racism and sexism plays a role in what happens in this world. Wall street is the largest bastion of nepotism that I have ever experienced. all of these people who are brokering these deals work with people who look like them. We are not asking for handouts, we are asking for a level playing field. If an of you did any research you would note that when minority firms were given an opportunity to participate no only did they meet the expectations, they sometimes exceeded those expectations.
The purpose of minority participation is to expand the riches beyond just a few. If minorities are included it helps the economy as a whole. Minorities live and work in different neighborhoods than the people who participate from Goldman and JP Morgan. People take their money where they live and socialize, so therefore if you have a diverse group of participants it stands to reason that the profits are spread out more.
Also, given this is just the second generation of minorities on Wall Street it has been written that Minorities earning the same as non minorities net value is lower due to the lack of generational wealth. Therefore, they have to help their families.
— Posted by brokergirl
61.
March 7th,20084:27 pm
I’m not sure what this minority-owned issue is. I’m a minority, and I’m an owner of Goldman Sachs, JP Morgan, Citigroup, and Bank of America? I know many other minorities who have stakes in those companies as well.
Oh so wait, let’s penalize the millions of minority owners of these companies through our 401k, pensions, and savings just to give money to a few minority banks who are owned by a handful. On top of that, why don’t we minorities take a sidedish of disrespect from all other banks that will now think that the only way we’re in business is because of whining and pandering from Jesse Jackson, and not from our own merit.
— Posted by banker