23 Jul 2020 Some Questions For BOA’s Billion-Dollar Brian Moynihan
Brian Moynihan, the monumentally self-impressed CEO of Bank of America (BoA), announced last week that the bank would be “committing” $1 billion over the next four years to “assist people and communities of color” in view of “racial injustices.” At about the same time the Wall Street Journal reported that BoA and JPMorgan would be splitting between $1.5 and $2.6 billion in direct payments from the federal government for participating in the COVID-19 pandemic-spurred small-business assistance program. This follows a decade of massive direct and indirect assistance to the biggest U.S. banks, including BoA, in the wake of the 2008 credit crunch.
It appears from all of this that Moynihan has assigned himself the position of unelected wealth-redistribution czar, transferring a billion dollars of taxpayer money to his favorite causes. Moynihan has a history of using other people’s money, primarily BoA’s shareholders’, to advance his personal political agenda. He used BoA funds – shareholder money, not a private donation from his well-stocked personal bank account – to support Planned Parenthood. He de-banked several gun manufacturers, private prisons, and immigration centers, in loyalty to his politics rather than his shareholders’ interests. Breaching the duty of loyalty like this, in favor of advancing personal interests, is a cardinal violation of a CEO or director’s fiduciary duty. But that’s just how Billion-Dollar Brian rolls.
Given this latest foray, which appears to be at taxpayer as well as shareholder expense, it seems appropriate to put some questions to him.
Are you redistributing taxpayer money according to your personal policy preferences? If so, could you tell us when the public voted you and the BoA board members into office? After all, the Republic’s other holders of the public purse strings were duly elected. Are you ready to submit your and the Board’s tenures to a national vote?
Alternatively, should BoA instead be regulated as a public utility, as an operation kept afloat with taxpayer capital? Right now, you are free to pocket your profits, spend taxpayer money to work your politics on the nation, and socialize your losses to the public. Usually that results in public-utility regulation. Why should BoA be exempt?
If the funds are not coming from taxpayers, but instead from BoA shareholders, should those shareholders take your announcement to mean that you have taken on still more governmental powers? BoA is incorporated in Delaware. While you have endorsed “stakeholder sovereignty,” which would essentially give CEOs like yourself vast power to ignore shareholder interests to propagate your own, the Delaware Chancery Court has made it clear that shareholder primacy is still the law. If you haven’t also appointed yourself the sub silentio Chancery Court of Delaware, would you mind showing the world, and specifically BoA shareholders, how you determined that this billion-dollar expenditure was solely in the best interest of shareholders?
Could you further explain how you plan to ensure that the promised grants will only go to the stated purposes of improving health, job retraining, small business support, and housing in those challenged communities of color? That none of it will go, in the name of those important goods, to political agitation, property destruction, or violence? Or, if some of it is going to organizations that participate in those activities (and therefore, goes to support those activities; I’m sure that a major-bank CEO understands the concept of the fungibility of money), could you explain how vast property destruction, the destruction of people’s lives over political disagreements, and the undermining of national efforts to contain a deadly virus enhance BoA shareholder value?
Could you release the complete list of organizations that will receive funding as a part of this billion-dollar grant? In particular, is any of it going to the Black Lives Matter (BLM) organization and its fellow travelers? If so, could you release the notes of the meeting in which you determined that, and how, its goals – such as the destruction of capitalism and the break-up of the nuclear family – are ones that you support as being in the best interest of your shareholders? If you cannot produce those notes, if you did not undertake those considerations, then can you explain how this extravagant donation is not a per se violation of your fiduciary duties?
Could you explain the reasoning by which you decided that this money best serves shareholder interests if it is dedicated exclusively to people and communities of color, rather than to all disadvantaged communities? Could you release the studies you undertook to confirm or deny the truth of the assertions by BLM and others that police violence in this country is a result of “systemic” racism, rather than, say, a demonstration of the need to reform policing generally? If you failed to undertake those studies, and instead simply accepted assertions that fit your pre-determined policy preferences, then can you explain how you have not per seviolated your duty of loyalty to BoA’s shareholders?
If you were guilty of these violations of fiduciary duty, should you, along with every member of the BoA Board of Directors who voted in favor of this donation, resign and withdraw from public (or from your beloved new “business-public” – all of the power, none of the responsibility) life in disgrace?
Finally, Mr. Moynihan, could you clarify for us if any of this billion dollars came from your own pockets? Did you have any private stake at all in this huge donation? Or are you aggrandizing your ego and enacting your personal policy preferences wholly at shareholder and taxpayer expense?
Scott Shepard is a fellow at the National Center for Public Policy Research and Deputy Director of its Free Enterprise Project. This was first published by Townhall Finance.