Public Meeting Regarding Citicorp and Travelers Group
Friday, June 26, 1998
Transcript of Panel Twenty
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20 MR. LONEY: Are there any other
21 questions? If not, I will thank the panel for
22 coming.
23 Let me just ask the audience, Lloyd
24 Williams, Cary Sanchez, or John Defano? Are
25 any of them in the audience? If not, we're
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2 scheduled for a break, and we're early for that
3 break, but since the folks who were scheduled
4 to testify aren't here, I think we have no real
5 choice but to take the break. We'll come back
6 at the next panel scheduled for 9:40.
7 (Recess) up low piece?
8 My name is Lillian Rodriguez Lopez
9 and I serve as the acting president of the
10 Hispanic Federation, a membership organization
11 representing the Latino human services sector
12 in New York, and New Jersey.
13 I am pleased to have been given this
14 opportunity to address you about the proposed
15 merger. I can speak with authority about the
16 philanthropic activities of Citibank, and its
17 impact in the Hispanic community as well as
18 Citibank's commitment to economic development
19 in New York City neighborhoods.
20 Citibank was one of our first
21 supporters and has remained a supporter since
22 our inception in 1990. Our partnership has
23 resolved around the collection and analysis of
24 data on Latinos that serves to promote a
25 greater understanding of our social, economic,
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2 and political roles in the city. They have
3 helped us to share with the larger community,
4 our dreams, our aspirations, and our reality.
5 Citibank has supported the publication of
6 Hispano-Stats, one of our yearly publications
7 for the past three years.
8 With Citibank assistance, we
9 distributed over ten thousand copies of our
10 first Hispano-Stats, which presented a
11 demographic and economic profile of Latino New
12 Yorkers. We still receive requests for the
13 inaugural Hispano-Stats from elected officials,
14 funders, students and many of our member
15 agencies.
16 Our second edition of Hispano-Stats
17 helped interpret the political strength and
18 potential of the Hispanic community in 29 New
19 York City neighborhoods, and the third one
20 which we'll be issuing shortly will profile
21 Hispanic institutions providing services to
22 communities throughout the State of New York.
23 This I say just to illustrate
24 Citibank's commitment to a better understanding
25 of the Hispanic community in New York.
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2 Citibank has also been committed to
3 strengthening the economic fiber of the Latino
4 community. Three years ago, Hispanics in
5 northern Manhattan joined together to create an
6 economic development institution dedicated to
7 growing neighborhoods and assisting Hispanic
8 and Dominican with small business.
9 Citibank has been a partner in this
10 enterprise and today, the Audubon Partnership
11 for Economic Development grows stronger. Just
12 one month ago the empowerment zone awarded to
13 the Audubon Partnership, a three quarter
14 million dollar grant to help Dominican
15 merchants in this area.
16 This is a fine accomplishment for
17 such a young nonprofit organization. I could
18 share much more with you about Citibank, but my
19 time is limited. I just want to say that they
20 have been a very strong supporter of the
21 Hispanic community.
22 MR. LONEY: Thank you.
23 (Continued on next page)
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2 MR. LONEY: Thank you. I would just
3 say to the panel, if you have written testimony
4 and you want to make sure it all gets in, leave
5 a copy with the registration desk in the front;
6 the entire statement will be put in the record.
7 Ms. Middleton.
8 MS. MIDDLETON: Good morning and
9 thank you for affording me this opportunity to
10 speak before this panel. My name is Shirley
11 Middleton, and I am the founder of WLM Bridge
12 the Gap Family Day Care, which was established
13 to provide professional, educational, and
14 affordable childcare services in a safe and
15 motivating environment.
16 As for our children and their
17 families, our broad range and comprehensive
18 program addresses these changing needs that
19 help our clients to maintain human dignity to
20 be functional and productive members of
21 society. We provide job training development
22 and offer entrepreneurial training to the
23 family day care providers and new small
24 business operators and home businesses.
25 Bridge the Gap Family Day Care
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2 network has established a relationship and a
3 commitment with Citibank to support our
4 community entrepreneurial and economic training
5 program. They have supported these programs
6 and others through grants, and they have been
7 mainstays of our board of directors.
8 Citibank has been servicing our
9 community through a joint effort for the past
10 two years, for the past two-and-a-half years.
11 We have trained approximately 60 family day
12 care providers in developing their business as
13 a professional business, who now have had
14 access to opening up a business account with
15 the proper credentials.
16 The staff of Citibank assists with
17 the training of the providers, helping the
18 providers to develop business plans; also, in
19 terms of how to report their quarterly taxes;
20 setting up payrolls; and, also, assisting them
21 in opening up the business account that will
22 suit their business; also, they have training
23 in PC Banking; and, also, they have helped with
24 the credit plans of these providers; and they
25 have had seminars on mortgages and commercial
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2 buying.
3 Bridge the Gap supports the merger of
4 Citicorp and Travelers Insurance to become one.
5 We, the members of the Bridge the
6 Gap, hope for the merger because change must
7 come within all our lives. We do not agree
8 with their past servicing, servicing of the
9 minority communities across this land. We will
10 not quote statistics because it is all in the
11 record.
12 To go forward, we believe history is
13 a lesson we all must learn from. History keep
14 us from making the same errors over and over.
15 History has posed to us many opportunities;
16 some have been partially implemented and some
17 have not been acknowledged. We all have a
18 history, but we were not a part -- it was not a
19 part of our lives. Many changes came about by
20 war, enslavement and cheating. No matter what
21 the methods used, history remains on the
22 record.
23 Today and the future is what we are
24 addressing going into the new millennium.
25 Although we support the merger of these two
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2 financial institutions, we put before you this
3 day the following proposal:
4 Let us begin by developing a
5 community business consultant group that will
6 be directly involved with the local community
7 small businesses and home businesses; also, to
8 have staff or members from this financial group
9 to be able to be a part of the small business
10 not-for-profit board, in terms of helping them
11 in managing their business for the first five
12 years of operation, because doing business in
13 the first five years, for one who does
14 not-for-profit business development -- to have
15 the team review with the businesses, and
16 seminars, how to maintain good records, tax
17 reporting, business accounts, reviewing their
18 books every three months -- this will provide
19 the kind of support for the business to go on
20 and not become a failing business and here we
21 are again in trouble.
22 Instead of always giving us loans to
23 start up a business, provide many startup
24 business grants instead of loans, as I said
25 before. Because this creates problems; we
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2 start out with a loan and we end up in a hole.
3 We also would like partnerships to be
4 developed with the various programs of our
5 community, educational programs, between
6 Citibank, also, economic development programs
7 within our community.
8 The other thing, instead of giving
9 students loans all the time, let us develop
10 some kind of grant or scholarship for students,
11 at least for the first two years, so when they
12 graduate from college they will owe 25,000 and
13 30,000 before they get a job.
14 As we outlined in this partial
15 proposal, we challenge you to be committed to
16 all of the minority communities across the
17 land. Once again we get into classifying
18 minorities, Afro-American women, and who knows
19 better but myself and as a single parent.
20 Thank you for allowing me this
21 opportunity.
22 MR. LONEY: Thank you, Ms. Middleton.
23 Ms. Johnson-Claxton.
24 MS. JOHNSON-CLAXTON: Good morning.
25 My name is Grace Johnson-Claxton. I am the
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2 president of Johnson Home Care Services. We
3 are a nursing agency that places nurses in the
4 home.
5 Citibank has been very instrumental
6 in assisting us in our payroll and also in
7 helping us to acquire larger headquarters.
8 They also have assisted us in making available
9 different opportunities for our employees, like
10 direct deposit, and give an offering to our
11 employees, mortgages at a lower rate, and car
12 loans.
13 I enjoy a very positive relationship
14 with my bank, bank manager -- her name is Kathy
15 Wheeler -- and also with my personal banker
16 whom made the request for me to be here today,
17 Gus Patraco. I am very grateful to the support
18 and help that the bank had given to me.
19 My credit line they have increased,
20 and, as I said, that assisted me very much with
21 my payroll because many a nights before the
22 credit line -- and the business keep, you know,
23 burning up on the cash flow -- we had to divest
24 to meet our payroll. That has really afforded
25 me to have good sleep at night. It has given
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2 me that assurance, because the payroll, it's
3 very much a headache for a small business.
4 One of the things that I appreciate
5 that Citibank have done, many banks have been
6 known to not want to deal with minority women
7 owned. The true testimony, this has not been
8 the case. Many banks have been known to
9 redline. We are located in East Flatbush,
10 which is a predominantly immigrant population,
11 and it is the new headquarters that, with the
12 help of Citibank through SB loan, we got it at
13 the lower rate with that assistance. That
14 really is a true testimony that they have met
15 that criteria, which is a need in the
16 neighborhood that we have, by lending to
17 minority, by lending to a woman and by lending
18 also in the East Flatbush minority-owned
19 neighborhood. The loan that we had, it was at
20 a lower interest rate, which really helped us
21 also.
22 Once again, I am giving my support to
23 this merger because I believe that it would be,
24 much more programs would be beneficial to our
25 community, and I support this merger, and I
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2 also support the help that they are giving me
3 and also thanking my bank manager and my
4 personal banker.
5 Thank you.
6 MR. LONEY: Thank you very much.
7 It is good to sleep at night, isn't
8 it?
9 MS. JOHNSON-CLAXTON: That was a big
10 problem for me.
11 MR. LONEY: Mr. Gotto.
12 MR. GOTTO: Thank you, Governor Loney
13 and panel. I am pleased to be here today to be
14 able to address this public meeting concerning
15 the proposed Travelers/Citicorp merger. My
16 name is Alberto Gotto. I am the Provost for
17 Federal Affairs at Cornell University and the
18 dean of the Joan and Sanford I. Weill Medical
19 College in New York City.
20 Here as the dean of the medical
21 college in New York City, practicing physician
22 and medical educator, I have no special
23 credentials in business economic matters, but I
24 do want to speak about an area in which I do
25 have special and particular knowledge, and that
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2 concerns the excellent corporate citizenship of
3 the Travelers Group and its chairman and CEO
4 Sanford I. Weill.
5 Mr. Weill received his bachelors of
6 arts degree from Cornell University in 1955
7 and, of course, as we all know, he's had a
8 remarkably successful career in business since
9 then. But just as remarkable as his business
10 success has been the extraordinary degree to
11 which Mr. Weill has volunteered his time,
12 effort, his vision and his financial resources
13 to support educational, civic and cultural
14 organizations that make meaningful
15 contributions to our society as a whole.
16 Mr. Weill's been on the Board of
17 Overseers in the medical college since 1982,
18 and we have been especially fortunate to
19 witness the depth of his dedication and
20 commitment to enable Cornell State the
21 cutting-edge of medical education, research and
22 patient care.
23 In 1995 he became the chairman of the
24 Board of Overseers. I'd like to just give a
25 few examples to illustrate Mr. Weill's
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2 commitment.
3 He and Mrs. Weill endowed the Joan
4 and Sanford Weill Medical Education Center
5 which made it possible for us to introduce a
6 problem-based learning curriculum. This has
7 been extraordinarily popular with our students
8 and the faculty. Cornell has currently over
9 7,000 applicants. We accept 100 medical
10 students each year. And, we wouldn't be able
11 to do this program without this new educational
12 center which provides one computer for every
13 two students and really has state-of-the-art
14 educational facilities.
15 We are in the process of implementing
16 a strategic plan. We are expanding our
17 research space by 25 percent and are increasing
18 the size of our research faculty by recruiting
19 30 new faculty in three areas -- structural
20 biology, neuroscience, gene therapy and genetic
21 medicine. These are all going to be very
22 important areas of research going into the 21st
23 century. It will enable us, we believe, to
24 make New York more competitive in regaining our
25 share of federal grants.
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2 Mrs. Weill, on April, the 30th,
3 announced a commitment, personal commitment of
4 $100 million to fund this strategic research
5 effort of the medical college.
6 We for 30 years, Cornell Medical
7 College, has had a Summer Minority Research
8 Fellowship. This has been highly successful.
9 The program enrolls college juniors and seniors
10 and gives an intensive summer experience. Each
11 student receives a stipend and housing, as well
12 as travel expenses.
13 From 1969 to 1983, we supported this
14 with federal grants. And in 1985, under
15 Mr. Weill's leadership, the Travelers Group has
16 stepped forward and provided an endowment to
17 ensure the continuation of this program.
18 Since 1969, more than 700 minority
19 students have participated in this program, and
20 an extraordinary number, over 90 percent of
21 them, have gained admission to U.S. medical
22 schools; over 100 of them have come to Cornell
23 Medical School. Cornell has one of the best
24 records in the country in underrepresented
25 minority students, one of the highest
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2 proportion of underrepresented minorities of
3 any medical school in the country. We accept
4 students on a needs basis, and 43 percent of
5 the tuition is discounted with either grants or
6 loans.
7 We renamed the medical college in
8 honor of Mr. and Mrs. Weill's extraordinary
9 support of the medical college over the years
10 and it is now the Joan and Sanford I. Weill
11 Medical College of Cornell University.
12 Mr. Weill, since 1991, has served as
13 the chairman of Carnegie Hall's board of
14 trustees. He cochaired the steering committee
15 to raise $60 million for Carnegie Hall, and in
16 1997 was honored by New York State with the
17 Governor's Arts Award.
18 Just one final example, with regard
19 to one of the comments of the earlier speakers
20 about grants for minority businesses. On July,
21 the 15th, Mr. Weill and the Reverend Jessie
22 Jackson will cochair a meeting under the
23 sponsorship of the Rainbow Coalition to be held
24 at Cornell Medical College. Represented there
25 will be corporations with $3 trillion of assets
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2 and pension funds and the stated goal of this
3 program is to provide money for minority
4 businesses.
5 I think Mr. Weill is amply dedicated
6 or demonstrated his dedication both personally
7 and through his leadership with Travelers and I
8 am confident with this merger there will be a
9 continuing and ongoing support of the community
10 and civic activities throughout New York.
11 Thank you.
12 MR. LONEY: Thank you, Mr. Gotto.
13 Are there any questions?
14 MR. ALVAREZ: I had a question for
15 Ms. Middleton.
16 You suggested at the end of your
17 remarks a list of things that you thought could
18 be improvements. I was wondering, you also at
19 the beginning of your remarks mentioned a few
20 of those same things that you thought City was
21 doing now, some of the services, the lending
22 programs, technical assistance and training. I
23 was wondering if you could differentiate a
24 little bit for us or clarify a little bit for
25 us the areas you thought City was stronger and
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2 the areas you were pointing out where they
3 could improve more.
4 MS. MIDDLETON: The area in which
5 they were strong, in terms of providing the
6 technical assistance to help to educate us, in
7 terms of what kinds of banking accounts that we
8 should open as a small not-for-profit business
9 or as a for-profit business; also, the
10 introduction to us about the PC Banking, which
11 I was one of those that they are teaching;
12 also, the area in terms of how to keep our
13 records, how to pay our taxes. They were very
14 strong in the whole business area of
15 developing, to help us to go forward and to be
16 a part of the board so that we can continue on
17 so we will not have, within two years, failed
18 as we have done.
19 The other areas I have mentioned, in
20 terms of grants to small businesses, if you
21 give us a loan and we have no capital, etc.,
22 what happens? You are giving us a loan for
23 $70,000. If our businesses fail or we begin to
24 go under or we cannot keep the business going
25 because we lack that continuity to keep going
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2 forward, that would only mean that our business
3 is going to fold, and what has happened in the
4 Harlem community, many businesses have folded
5 because of this, and then we end up paying the
6 money back or we end up going to court because
7 they are forcing us to pay the money back which
8 we don't have. So it has to come out our
9 personal needs.
10 So instead of giving us loans to
11 start us out with, which is starting us out at
12 a handicap, start us out at a mini-grant which
13 we will then be able to develop and go forward
14 from there. That is our major problem, to be
15 able to continue to go forward. That is where
16 at this point we need that kind of assistance
17 and we are not getting it at this particular
18 point.
19 MR. ALVAREZ: Thank you.
20 MR. LONEY: Any other questions? If
21 not, I thank you, our panel, very much.