How Jesse Jackson's focus on the financial markets could make a difference

Black Enterprise, Oct, 1998 by Eric L. Smith

While the Wall Street Project is still in its embryonic stages, Jackson hasn't been shy about taking some companies to task in the early going. He jumped headfirst into the fray last November when PolyGram President and COO Eric Kronfeld commented that virtually all African Americans had criminal records. Jackson accused PolyGram of engaging in a pattern of race and sex exclusion. Then his group turned around and purchased about $1,000 worth of stock in five entertainment corporations that own record companies: Time Warner Inc., Seagram Co. Ltd., EMI Group, Sony Corp. and PolyGram. Kronfeld was released from PolyGram four months later and was replaced on the board by Clarence Avant, the African American chairman of PolyGram's Motown Records.

In the spring of '97, Jackson worked in conjunction with a number of minority General Motors dealers who felt they were being "awarded" dealerships in inferior locations that were designed to fail. Jackson, who subsequently purchased 20 shares of GM stock, met with Jack Smith. The two jointly commissioned an independent review of GM's dealings with its African American dealers. As a result, Weldon Latham, a senior partner at the Washington, D.C., law firm of Shaw Pittman Potts & Trowbridge, conducted an exhaustive review of GM's Minority Dealer Development program.

The result was a 215-point plan that recommends, among other things, that dealers use their own attorneys, accountants and advisors to evaluate a dealership's potential success; the creation of cash and promotion incentives for mid-level and field managers who help minority dealers become profitable and penalties for those who don't; and upgrading the selection and preparation of minority dealers through more rigorous testing and in-dealership training.

"You can't just ignore a shareholder's concerns, in particular when those concerns are legitimate and public," says Jackson. "We met with GM's chairman, and the recommendations made by Weldon Latham's firm are by and large being honored. That's a concrete thing that has happened."

A CATALYST FOR CHANGE OR HYPE?

This aside, there are skeptics of Jackson and the Wall Street Project. Critics of Jesse Jackson charge that in a civil rights career that's spanned almost four decades, his preoccupation has too often been style over substance, flash over results. So when Jackson announced that he was going to force the diversity issue on Wall Street, the heart of the world's financial district, cynics abounded and some predicted that his desire would wane once the television cameras faded from view.

"Let's put it this way, I don't put too much stock in anything Jackson does," says Michael Meyers, executive director of the New York Civil Rights Coalition. "He dabbles here and there but doesn't have staying power. So I don't consider him to be a serious player.

"So Jesse is taking stock in '98. So what?" adds Meyers. "Now he's going to present resolutions to boards of directors? He can do that as Jesse Jackson. He doesn't need to be a shareholder. Ten shares of stock won't make you a player on Wall Street. You have access to limited information that the board is required to give you but it doesn't give you voting power or any clout. It's a gimmick that gives Jesse another headline."