Monday, February 05, 2007

Looking at the Daily News editorial on Barclays, affordable housing, and apartheid

The New York Daily News, in an editorial today (Taking it to the bank) taking Barclays' defensive letter on faith, goes beyond the bank's statement to distort the issues.

Let's put aside the allegations regarding Barclays and slavery for now. (Fans for Fair Play defends its take but states: And while the gentlemen who founded the bank were wealthy from mercantile pursuits, which at the time had to have some connection to the slave trade, it's debatable what the phrase "founded...on profits made in the slave trade" comes to mean historically.)

Consider the Daily News statement:
The bank's payments - the largest ever for arena naming rights - will help finance thousands of units of affordable housing while fattening Ratner's wallet.


That's a distortion. Yes, any revenue that Forest City Ratner would gain would help the overall enterprise, but the developer has not yet claimed that the Barclays deal was supposed to build subsidized housing. Rather, the affordable housing would be financed significantly by government funds--and the city has been unwilling to reveal the amount. (Wouldn't the Barclays money help pay for the arena?)

Gotcha?

The Daily News continues:
But some howl that the money is unfit for Brooklyn. They accuse Barclays, founded in the 17th century, of having profited from the slave trade and reprising that bad behavior by doing business in South Africa during apartheid. This amounts to what one historian calls a "game of gotcha."

Actually, the historian quoted in the New York Times confined his "gotcha" comment to the slavery issue, not the more contemporary (and less murky) apartheid issue.

The Daily News continues:
And it turns out the accusations are grossly unfair, if not flat out wrong. The bank said in a statement Friday, "We are ... firm in our belief that the partnership bank on which we were founded did not profit from the slave trade or slavery."
...As for South Africa, Barclays divested eight years before the end of apartheid and now is a member in good standing of the banking community there.


Moral outrage over apartheid

The newspaper says there may well be nothing to be morally outraged about. Again, let's put aside the slavery issue for now. Here's how various newspapers reported the divestment.

New York Times (11/25/86):
Barclays Bank P.L.C. said today that the decision to sell its South African unit had been made for ''basically commercial'' reasons. But the Barclays executives acknowledged that the move had also been deeply affected by the growing pressure worldwide against Pretoria's apartheid Government and against foreign businesses seen to be dealing with it.
''World opinion counts,'' said Sir Timothy Bevan, the chairman of Barclays. ''It affects commerce. And world opinion has changed quite a lot this year.''


Los Angeles Times (11/25/86):
Although declining profits and other business considerations were involved in Barclays' decision to pull out -- the largest withdrawal yet in dollar terms -- [Barclays' Chris] Ball told newsmen that "political factors," including anti-apartheid protests in Britain and the new American economic sanctions on South Africa, "have precipitated this transaction."

Washington Post (11/25/86):
Following a spate of disinvestment by large American companies, Barclays is the first major British enterprise to pull out of South Africa. Despite the size of their assets there, British companies have not come under the public and political pressure felt by their U.S. counterparts.
But although the antiapartheid groups are relatively small here, they have been persistent, and particularly effective among student groups. Barclays insists that the actual value of losses due to antiapartheid pressure has been slight, but acknowledges that its share of the British student market has fallen from 25 to 17 percent. In recent months, six Oxford University colleges have withdrawn their accounts from Barclays because of its high profile in South Africa.


The (London) Guardian (11/24/86):
The growing concern that the South African link has harmed the bank's image has encouraged Barclays to distance itself publicly from the South African regime's policies. Earlier this year Barclays new chairman, Sir Timothy Bevan, publicly spoke out against apartheid.
The group has lost a number of bank accounts from Labour councils and some charitable business. But the most serious damage that the South African connection has done to the bank has been the relatively small number of young graduates and undergraduates who have opened accounts at Barclays.


So in the British context, Barclays could be considered ahead of its peers. In the larger world context, however, Barclays was behind other multinational companies.

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