Home > Banking Information & Regulation > Public Meeting Transcripts > PMT - Agendas June 25-26, 1998
Public Meeting Transcripts
Public Meeting Regarding Citicorp and Travelers Group
Thursday, June 25, 1998
Transcript of Panel Twelve
341 22 Next panel will be panel 12, Patricia 23 O'Neill Galin, Raymond C. Bowen, Amalia 24 Betanzos, Sue Bastian and Peter Barnett. 25 Ms. Galin, you're first on my list. . 342 1 2 MS. GALIN: Ladies and gentlemen, 3 thank you for the opportunity to speak to you 4 regarding the acquisition of Citibank. My name 5 is Patricia O'Neil Galin, and I am the 6 executive director of the These Our Treasures 7 in the Bronx. We are a not-for-profit agency 8 serving youngsters and families for the past 9 twenty-five years. 10 Twenty-five years ago there were many 11 banks to choose from regarding loans, credit 12 lines, et cetera. Citibank was the only 13 banking institution who considered loans and 14 the credit line for this Bronx organization. 15 Citibank continues twenty-five years 16 later to be a major influence in the Bronx 17 community, and more particularly has helped 18 These Our Treasures with our vision and mission 19 to provide services to young disabled children 20 and their families. 21 As we have grown since 1973 with 22 children and families and a budget of $288,000 23 to a budget of over three and a half million 24 dollars, Citibank has influenced our growth and 25 has truly been a friend to TOTS. . 343 1 2 Thank you. 3 MR. LONEY: Mr. Bowen. 4 MR. BOWEN: Good afternoon, members 5 of the Federal Reserve Board, ladies and 6 gentlemen. My name is Raymond C. Bowen, 7 president of the LaGuardia Community College of 8 the City University Of New York. I am here 9 today to speak on behalf of LaGuardia and its 10 long-standing relationship with Citibank. 11 LaGuardia Community College, the 12 youngest institution in the City University, 13 enrolls about 33,000 students, 11,000 in the 14 degree programs and 22,000 in noncredit 15 programs. 16 Our student body is comprised of 17 individuals who are 37 percent Hispanic, 20 18 percent black, 15 percent white, 13 percent 19 Asian, 2 percent native American and 4 percent 20 other, making us one of the most diverse higher 21 educational institutions in America. 22 Also noteworthy is the fact that 66 23 percent of our students are women. About 75 24 percent of our new students reported family 25 incomes under $20,000. Most are on their own . 344 1 2 and in need of work in order to support 3 themselves. Many of our students work while 4 they are enrolled at LaGuardia, 46 percent 5 part-time and 54 percent full-time. 6 We have the fifth largest foreign 7 student enrollment of any Community College in 8 the country. Our students are drawn from over 9 135 countries speak 85 languages other than 10 English. For several consecutive years 11 LaGuardia Community College has ranked among 12 the top community colleges in the country in 13 graduating minority students. 14 In 1977 LaGuardia ranked fifth among 15 the nations two-year institutions in awarding 16 degrees to minorities. Priority initiatives 17 for the college include cultural pluralism, 18 economic development, and international 19 education. 20 LaGuardia has also been recognized by 21 the US Department of Education as a model 22 Community College both nationally and 23 internationally. As a collaborative 24 partnership between the college and the New 25 York City Board of Education LaGuardia hosts . 345 1 2 three model high schools on its campus; the 3 Middle College High School creates a unique 4 educational opportunity for students who are at 5 risk of dropping out; the International High 6 School serves recent immigrants from numerous 7 countries by offering a comprehensive secondary 8 curriculum while developing students oral and 9 written English language competence, and the 10 Robert F. Wagner Institute for Arts and 11 Technology, a New Visions school that takes the 12 standard core curriculum and melds art and 13 technology into every phase. 14 From its inception LaGuardia 15 Community College has been a cooperative 16 education institution based on the premise that 17 learning should take place in a variety of 18 settings both inside and outside the classroom. 19 The cooperative program is designed 20 to help students determine their individual 21 goals, explore various career options, apply 22 classroom learning to real work situations, and 23 strengthen interpersonal and technical skills. 24 LaGuardia Community College has the 25 largest cooperative education program of all . 346 1 2 two-year institutions. This collaboration will 3 have a dynamic impact on the lives of the 4 students and families that LaGuardia serves and 5 we look forward to many new positive ventures. 6 Needless to say that we at the 7 college are extremely excited to learn that 8 Citicorp and the Travelers Group have made a 9 ten year commitment of $115 billion to lending 10 and investing in low and moderate income 11 communities and small businesses. 12 In addition to providing special 13 pricing to low and moderate income consumers 14 interested in commercial and homeowner 15 insurance coverage, I was particularly 16 interested in the financial and technological 17 literacy program proposed in this merger. 18 As an urban educator I also agree 19 along with both Citicorp and Travelers Group, 20 that consumers need financial and technical 21 skills, as well as access to superior products 22 and services, if they are to achieve financial 23 well being. 24 The opportunity for educators to join 25 an advisory panel on financial literacy who . 347 1 2 will assist the bank in understanding the 3 problems of this diverse population, and to 4 ultimately develop effective solutions to meet 5 their needs is critical and warranted endeavor. 6 Citibank is no stranger to LaGuardia 7 Community College. Whether supporting programs 8 for our older adults on wellness and consumer 9 education, or providing funding for our college 10 for childrens programs, over the years, 11 Citibank grants have helped all segments of our 12 population. 13 In our high schools, Citibank has 14 been a responsive partner in addressing the 15 need for SAT test preparation, in preparing our 16 students to enter the world of finance, and in 17 understanding the responsibilities associated 18 with savings, credit and money management. 19 Citibank has provided our students with hands 20 on exposure to financial curricula that the 21 college was unable to offer. 22 They have also supported many 23 cultural events through our Academic Excellence 24 Program. Citibank has also been involved in 25 our Talent Search Program which is a . 348 1 2 comprehensive support service program designed 3 to facilitate access to post-secondary 4 institutions for low income and first 5 generation college students from Western 6 Queens. 7 I am proud to say that during this 8 academic year nineteen LaGuardia students have 9 been hired as interns at various Citibank 10 locations, including Court Square, Wall Street 11 and Citicorp Center, and five LaGuardia 12 graduates have accepted permanent employment. 13 Three students have been hired as 14 interns in a partnership between Citibank and 15 Cushman & Wakefield for this summer. In 16 addition, a permanent annual donation of $3,000 17 has been given to LaGuardia's Partners in 18 Cooperative Education for scholarships. 19 Citibank administrators and staff 20 have worked hand in hand with LaGuardia 21 Community College over the past 25 years as a 22 mentor, sponsor and a friend. 23 On behalf of LaGuardia Community 24 College, its faculty, staff and students and 25 alumni, I am proud to support the merger of . 349 1 2 Citibank and Travelers Group and look forward 3 to benefits of this merger which will bring to 4 many of our students and various programs who 5 depend upon us and Citibank to help them to 6 fulfill their dreams. 7 Thank you for this opportunity to 8 speak on behalf of LaGuardia Community College 9 for the proposed merger between Citibank and 10 the Travelers Group. 11 MR. LONEY: Thank you, Mr. Bowen. 12 Ms. Betanzos. 13 MS. BETANZOS: Thank you. Good 14 afternoon. My name is Amalia Betanzos, and I 15 offer this testimony in support of the proposed 16 acquisition by Travelers Group with Citicorp. 17 I am the president and CEO of the Wildcat 18 Service Corporation, a not-for-profit human 19 service agency which has provided training and 20 employment opportunities to more than 70,000 21 New Yorkers since 1972. 22 Our agency assists the most 23 disadvantaged and underserved populations in 24 the city, including ex-offenders, ex-addicts, 25 long-term welfare recipients and at-risk youth. . 350 1 2 Travelers group's illustrious history 3 has been punctuated by providing continuing and 4 generous support to a growing number of diverse 5 communities and their residents throughout the 6 country. Travelers' commitment to increasing 7 the capacity and well being of the 8 disadvantaged and its commitment to community 9 is unsurpassed. 10 This commitment permeates throughout 11 the Travelers organization's staff and its 12 subsidiaries. Our own experience at Wildcat is 13 demonstrative. This year, Salomon Smith 14 Barney's MIS staff contributed furniture and 15 computer equipment and volunteered hundreds of 16 hours of time to help Wildcat fill the computer 17 training lab at a shelter for battered women on 18 the lower east side of Manhattan. 19 This one of a kind effort has become 20 a model for enabling shelter-bound residents to 21 receive much needed job skill training without 22 the cost or the risk of traveling throughout 23 the city to attend school, and serves as an 24 example of what private industry can do to help 25 those with multiple barriers to employment. . 351 1 2 In addition, three years ago, two 3 years prior to the enactment of the historic 4 new federal welfare reform legislation, Smith 5 Barney, now Salomon Smith Barney a Travelers' 6 subsidiary pioneered with Wildcat in an 7 innovative training and employment program for 8 single mothers receiving welfare. 9 Approximately one year ago Travelers 10 lent its full support to begin that program 11 with two other subsidiaries, Commercial Credit 12 Company in Baltimore and Primerica Financial 13 Services in Atlanta, Georgia. These welfare 14 women after six months training, three months 15 with Wildcat and three months of internship 16 with Travelers Smith Barney, get jobs that 17 average $24,000. It really is wonderful to 18 contemplate that these women who were on 19 welfare and had no hope of getting off welfare 20 after one year now own Travelers stock in 21 addition. 22 Despite these accomplishments, 23 Travelers was not content to see the program 24 nourish only with within its own corporate 25 sphere, and so the senior management has . 352 1 2 recently reached out to sister companies and 3 competitors in the financial services industry, 4 and has brought five additional Wall Street 5 giants together to develop similar programs 6 with Wildcat. This is as unique and unselfish 7 and undertaking as I've seen in my thirty years 8 in public office and private enterprise. 9 Travelers has demonstrated time and 10 time again as it expands, so do the benefits 11 and opportunities that accrue to every member 12 of the community in which it develops roots, 13 and in particular to the most disadvantaged and 14 marginalized youth and adult residents of these 15 communities. 16 I am confident that this merger with 17 Citi will bring the strength of Travelers and 18 the strength of Citicorp together. Citicorp 19 also has had a wonderful record of dealing with 20 nonprofit organizations and helping to employ 21 welfare recipients in their banks, and we are 22 currently working on a program that started way 23 before merger talk, to make sure that more 24 Wildcatters who will be fully trained by 25 Citibank and by Wildcat, will have the . 353 1 2 opportunity to really remake their lives. 3 I'm certain that consistent with both 4 their long history of expanding assistance to 5 the needy as they expand their only commercial 6 activities, the acquisition of Citicorp by 7 Travelers will provide a new generation of 8 support and an extended commitment to assist 9 those most in need and, therefore, I urge the 10 acquisition be approved. 11 Thank you. 12 MR. LONEY: Thank you. Ms. Bastian. 13 MS. BASTIAN: Yes. Good afternoon 14 Federal Reserve Board members, ladies and 15 gentlemen. 16 I am here as the president of 17 Teaching Matters Inc. to describe our 18 relationship with the Citicorp Foundation. 19 Teaching Matters Inc., CMI is a New York City 20 based nonprofit organization founded four years 21 ago by Elizabeth Ruletin. 22 Our mission is to help teachers in 23 the New York City public schools learn to use 24 the technology that is everywhere in a creative 25 and effective way to strengthen student . 354 1 2 performance. 3 To date we've served over 350 schools 4 and this year we're working in 190 schools. We 5 send approximately 35 to 40 teacher trainers in 6 technology into the five boroughs everyday. 7 Our recent accomplishments were to 8 work with the Board of Ed to write their 9 strategic development plan for technology. 10 We're funded, proud to say, by Annenberg and 11 J.P. Morgan, and Seagram's, and we are 12 partnership in the Department of Education 13 challenge grant. 14 We have at TMI a three year history 15 of collaboration with Citibank which began in 16 1995 with their support of $140,000 for the 17 first CitiTech series gateway to technology 18 planning for high school educators. We felt 19 that the principals of the schools were being 20 left out of the education everyone needs about 21 what to do with this puzzling phenomenon called 22 technology, telecommunications and the 23 computer. 24 The series provided a leadership 25 institute for staff and for leaders in the . 355 1 2 metropolitan area, including Westchester and 3 Long Island. 4 We followed that kind of initial 5 exposure up with very regular visits to those 6 schools. Because of the attendees enthusiasm 7 for the quality of training they received, 8 Citibank funded us for a second year. The 9 second series reached 30 high schools, the 10 first one I believe approximately 35. 11 The bank's commitment again was 12 approximately $140,000. Last year we were 13 pleased to receive a third grant from Citibank 14 foundation for new thinking, new teaching, 15 technology across the curriculum in order to 16 bring the curriculum into subject matter area, 17 and not have technology be an end in itself. 18 We target the mayor's project smart 19 principals this year and the teachers. We're 20 working with 110 teachers in two districts. 21 Through their banking on education programs 22 Citibank's contribution has been significant. 23 The Foundation's ongoing commitment 24 is evident time and time again to the public 25 school. Their contributions have been careful, . 356 1 2 informed and comprehensive. They focused both 3 on the principal and the classroom teacher many 4 of whom are in underserved neighborhoods. It 5 is our belief that the Citicorp Foundation has 6 helped establish the standard of what good 7 corporate philanthropy is all about. 8 Thank you. 9 MR. LONEY: Thank you, Ms. Bastian. 10 Mr. Barnett. 11 MR. BARNETT: That was the cry of the 12 poor. A lot of people don't want to hear it. 13 A lot of people can't hear it, and Glenn, Scott 14 and James and Barbara, I want to tell you that 15 Citibank is one of the few places that hears 16 the cry of the poor and the needy and does 17 something about it. 18 I can remember a very poor community 19 out on Long Island called Wyandanch and on that 20 community there are many poor and homeless 21 families. On Long Island if you're a mother 22 with three children you need to have about 23 $30,000 a year to come in to survive on Long 24 Island to have a decent house, food and a junk 25 car to get around in. . 357 1 2 What Citibank does is care about 3 other people. I really don't know the 4 corporation, but I know what Citibank has in 5 one person. 6 I've been working with a woman named 7 Michelle Debenedetto who is an employee of 8 Citibank and her main job is to look around at 9 the communities of Long Island and say, what is 10 needed? What can the not-for-profit groups do 11 to help the poor and needy of Long Island? And 12 she does it. 13 She is a mother with a great heart 14 and she represents what I feel is what's needed 15 in America today with corporations, to help 16 those who are in need, and Citibank is one of 17 those groups that does that. 18 (Continued on next page) 19 20 21 22 23 24 25 . 358 1 2 MR. BARNETT: Wynandach Homes & 3 Properties is my nonprofit that builds and 4 renovates houses for homeless women. We take 5 them out of the shelter, we take them out of 6 their cars, we take them out of tents that they 7 are living in and we give them a clean, decent 8 place to live. Then we help them get educated. 9 We help them get into GED programs. We help 10 them get their AA degree at Suffolk Community 11 College. We help them get a decent job where 12 they are on the road to making that $30,000. 13 Citibank over ten years ago -- when I 14 was just starting, just starting to get some 15 money to do funding -- gave us the money to 16 hire a summer intern, a woman that later we 17 were able to hire full time; again, with help 18 from Citibank, to work with these mothers to 19 bring them from welfare to being 20 self-sufficient women taking care of their 21 families, with their degrees, getting a chance 22 to make their AA degree. 23 One of the things I find that with 24 these mergers -- and we are not going to stop 25 it; I was reading today another AT&T and . 359 1 2 Cablevision merging -- they are happening. It 3 is the way companies are stabilizing these 4 days. And what I am hoping to see with 5 Citibank's merger is that they are going to 6 create a very strong bank and they are going to 7 create a very strong corporation that is going 8 to have a heart, it is going to have the heart 9 of Michelle DiBenedetto, because she's there 10 and she's going to tell the banks and tell 11 Travelers, you've got to stay committed to 12 helping the poor and the needy. I think that 13 is what is going to happen. 14 The Federal Reserve Bank two years 15 ago started a program called LIHPPI. It was 16 called the Long Island Home Purchasing Process 17 Initiative. They helped bring together all 18 sorts of banks and nonprofits on Long Island, 19 saying how can we help people in minority 20 communities, people who are just making that 21 $30,000 buy a house on Long Island. Citibank 22 through its funding and its creative work with 23 Michelle and other people that she brought in 24 from Citibank created pamphlets, that we are 25 getting into every library, every school on . 360 1 2 Long Island, "Breaking the Barriers to Home 3 Ownership, Guides to Purchasing a Home." These 4 are things that are needed. These were worked 5 out with not-for-profit groups like myself to 6 help them make a difference. 7 One of the things I find is that many 8 corporations need to hear the poor. They need 9 to hear the voice of the needy. And one of the 10 things that Citibank will do is help bring that 11 about. As they grow and develop, I have no 12 doubt that they are going to help people hear 13 that voice, people to care about the needy. 14 There was a speech given by Carl 15 Messenger to the United Nations in 1981 -- I 16 will just end with this -- where he spoke to 17 corporate America and said: In corporate 18 America, as you prosper, you can't just get up 19 there all by yourself, but you have to help 20 those rise with you, and we have to learn that 21 we all have to rise together. If one segment 22 of our society gets up there all by itself, it 23 will tackle. It can't handle the attitude. 24 You have to bring everybody else up with you. 25 Carl Messenger said it this way, and . 361 1 2 I believe that Citicorp believes in this: 3 People are unreasonable, illogical, 4 self-centered; love them anyway. If you do 5 good, people will accuse you of selfish 6 ulterior motives; do good anyway. If you are 7 successful, you will win false friends and true 8 enemies; try to be successful anyway. The good 9 you do today will be forgotten tomorrow; do it 10 anyway. Honesty and frankness make you 11 vulnerable; be honest and frank anyway. People 12 favor underdogs, but I notice they follow the 13 top dogs; fight for some underdogs anyway. 14 What you spend years building may be destroyed 15 overnight; build anyway. People really need 16 help, but they may attack you if you help them; 17 try to help people anyway. Give the world the 18 best you have and you'll get kicked in the 19 teeth; give the world the best you have anyway. 20 Thank you. 21 MR. LONEY: Thank you. I like that. 22 Any questions from the panel? If 23 not, then I will thank you for coming and 24 sharing your experiences with us. 25 We are going to take a 15-minute . 362 1 2 break and be back at 4:25.
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