According to a study that Mr. Piña commissioned from the California-based activist group Greenlining, Publix gave only 2.81% of its grants in 2006 to “minority-led organizations.” Minority-led is defined as groups whose staff and board of directors are 50% racial minority and whose mission and programs “are aimed predominantly towards communities of color.” Overall, Florida’s top 10 foundations (as measured by asset size) didn’t fare much better, giving on average 5.48% of their grants to minority-led outfits.

But who cares? Doesn’t it matter more what these groups accomplish rather than who runs them? Mr. Piña is outraged by the suggestion. “No one can convince me that United Way provides better service directly to minorities than a minority-led organization,” he told us recently. “We’re in the trenches. There is no way that [nonminorities] can connect and have more traction and effect than organizations with leaders who live in those communities day in and day out.”

Mr. Piña’s claim would seem, at the very least, in need of some statistical validation. But then Greenlining’s survey doesn’t ask where the leaders of “minority-led” organizations reside. We’d guess that plenty of them live comfortably outside of Florida’s worst neighborhoods. The Florida report, like the studies Greenlining has done in other states, makes clear that the agitation for “diversity in philanthropy” isn’t about donating to causes that help minorities. It’s a jobs program for college-educated minorities who want to work in nonprofits.

As for foundations that focus on nonminority causes, Mr. Piña says they need to rethink their priorities. “We need to create a leadership shift, to change how foundations view inner-city revitalization versus giving to the opera versus giving to protect the Everglades.” Philanthropies like the Turner Global Foundations, whose cash goes largely to environmental protection, had better get with the program. That means you, Ted.

To accomplish this redistribution of charity, Greenlining says Florida foundations “should track diversity information for grantee organizations, either voluntarily or through legislative mandates.” Last year, Greenlining almost succeeded in getting such legislation passed in California. It was stopped only when California’s largest foundations agreed to pay off California’s minority-led organizations. This month the foundations announced the details and cost of that plan — to the tune of about $30 million. Greenlining’s director, Orson Aguillar, told us “that’s a good start” but the money isn’t “a substitute for legislation.”

Mr. Piña worries that his own philanthropy shakedown won’t be as successful. He says the Florida legislature’s “extreme right-wing methodology” will make it difficult to force this issue into law. So Mr. Piña is heading to the U.S. Congress, and especially the Black, Hispanic and Asian Caucuses, to gin up support. It’s about time that leaders of the foundation world — those who care about results more than politics — stand up and call this the race-baiting money grab it is.

California regulators handed electric utilities $82.2 million in bonuses Thursday for improving energy efficiency, even though the state isn’t sure the companies saved as much power as they claim.

Money for the bonuses, approved by the California Public Utilities Commission, will come from Californians’ monthly electrical bills. The commission’s vote came after protesters asked the commissioners for a moratorium on electricity rate increases.

Although the bonuses represent an extra expense for ratepayers, there’s a strong chance that they won’t lead to higher rates, at least not for Pacific Gas and Electric Co. customers. A spokesman for the utility said Thursday that PG&E expects electricity rates to decrease by roughly 1 percent in January, in part because the natural gas that fuels California power plants is cheaper now than it was during the summer.

The efficiency bonuses are at the heart of a program designed to give electrical utilities a financial incentive to save energy. Created last year, the program gives utilities targets for cutting power use among their customers. If the utilities meet those targets, they receive bonuses. If they miss by a wide margin, they can be fined.

But the program has run into problems.

The state’s investor-owned utilities requested a total of $152 million in bonuses this fall and gave the commission data showing that they had met their efficiency goals. But the commission’s staff examined the data and issued a draft report saying that most of the utilities had badly missed their targets. Instead of rewards, they should face fines totaling about $3 million.

The commission’s staff wanted more time to resolve the discrepancy. But the utilities pushed to have the rewards issued before January so they could be booked with this year’s earnings. The commission agreed, saying that if bonuses aren’t granted on a timely basis, they aren’t much of an incentive.

“We have gone round and round and round on this issue and have sought to strike a balance of protecting ratepayers from overpaying while still giving utilities incentives,” said commission President Michael Peevey.

Critics, including some of the commission’s own staff, argued that the decision removed the program’s teeth.

“Energy efficiency has the potential to be both the most expedient and most cost-effective weapon in fighting climate change, but only if the energy savings are real and sustainable, and that requires accountability,” said Dana Appling, director of the commission’s Division of Ratepayer Advocates.

Only Commissioner Dian Grueneich voted against the $82.2 million in bonuses. She had proposed that the utilities get $47 million instead.

Pacific Gas and Electric Co., the state’s largest utility, will receive $41.5 million, while Southern California Edison will get $24.7 million. San Diego Gas and Electric Co. will receive $10.8 million, and Southern California Gas Co. will get $5.2 million.

The precise impact on utility bills is not yet clear.

Each December, utilities determine their electricity rates for the coming year by adding up all the costs that the commission has allowed them to pass on to their customers. PG&E is still calculating the rates that will take effect on Jan. 1, and the efficiency bonus will be part of that calculation.

On Thursday, the commission also approved the amount the company plans to spend on buying electricity next year, which will also go into the rate calculation.

Earlier in the meeting, an array of activists and small-business groups called on the commission to place a temporary moratorium on rate increases until the economy recovers.

“It’s time for regulators to stand up for the people,” said John Gamboa, executive director of the Greenlining Institute, which organized the protest. “You’ve got to speak up for us, because if you don’t, no one does.”

San Francisco, CA - Over 150 ratepayers packed the auditorium at the California Public Utilities Commission on Thursday to protest billions of dollars in pending utility rate increases. Nearly two dozen community leaders and ratepayers testified at a Commission meeting to demand rate freezes until the end of the recession in California.

Speakers highlighted the fact that executives at Southern California Edison were receiving record compensation while passing on the cost of doing business on to ratepayers.

Orson Aguilar, Executive Director of the consumer protection group Greenlining Institute, asked the Commission, “Why should ratepayers suffer during a recession while a third of Edison employees make over a hundred thousand dollars a year? It’s a bailout for utilities.”

Business and community leaders from across California also warned the Commission on the devastating impact rate increases will have during the recession.

According to one community organizer, as many as 500,000 homes in California had their utilities shut off in 2007, and warned that it could get worse this winter.

“Fifteen California counties are experiencing double digit unemployment,” said Samuel Kang, an attorney with Greenlining. “Imperial County, alone, has a 28% unemployment rate. Never mind a recession. Many parts of California are facing a depression.”

Following their testimony, hundreds of ratepayers held a rally outside the Public Utilities Commission demanding a rate increase moratorium. The noise from the rally temporarily delayed the Commission meeting, forcing the California Highway Patrol officers and Commission security to move the crowd further away from the building.

At the rally, protestors said they wanted to deliver a Christmas message to the Commission, holding signs that read, “All we want for Christmas is electricity.”

Might a media company based in Northern California follow the Tribune Co.’s example and be the next to seek some “breathing space” from its debts, i.e., file Chapter 11? No way, said Gary Pruitt, CEO of Sacramento’s McClatchy Co. Talking to a reporter after his presentation Tuesday at the UBS Global Media and Communications conference in New York, he said McClatchy is “not facing anything close to what they have been. I was disappointed about the bankruptcy filing, that’s all I can say.”

But speculation has swirled around the indebted chain, which owns the Sacramento Bee, the Modesto and Fresno Bees and 27 other papers nationwide. Reports this week suggest it’s looking to offload the Miami Herald, acquired as part of Pruitt’s ill-timed $4.5 billion purchase of Knight-Ridder papers in 2006. Pruitt wouldn’t comment on that, either.

Along with other newspaper chains, McClatchy has seen double-digit drops in revenue, circulation and newsroom staff. Stock price in 2005 - $76. Closing bell Tuesday - $2.35. “Our current results are lousy, and the economy seems to be worsening,” Pruitt told the UBS audience. On the upside, he noted that McClatchy paid down $404 million in debt through the first nine months of 2008. That leaves a current balance of $2.07 billion on which “further progress” was being made. Even better, by the second half of next year, “the recession may have bottomed or perhaps the economy may even have returned to growth,” he said.

All in all, said Pruitt, he approached the New Year “with a strong sense of resolve.” Like others in the business, he’s going to need it.

Missing at the top: Even in these days of endless zeros, losing $81 billion is nothing to sneeze at, as Carolyn Said’s front page story on CalPERS “walloping” made clear on Monday. So isn’t it about time it had a CEO? Or a permanent chief investment officer?

In fact, CalPERS, the nation’s largest public pension fund has been without its two top executives for more than six months. The earliest the CEO spot will be filled? “Later this month,” according to CalPERS spokesperson. “The board is doing its finalist interviews.” And the CIO? “The search firm we contracted has lots of CIO candidates. We anticipate completing the search process within the coming weeks, likely not until 2009.”

I guess things have been moseying along just swell without them.

Lending less: Among the hardest-hit victims of the credit crunch are minority-owned local businesses. That’s depressingly clear from a report just issued by Berkeley’s Greenlining Institute.

It found that SBA-backed loans, upon which many such businesses depend when they can’t get credit elsewhere, fell by almost 40 percent in California this year, a 10 percent greater decline than the national figure. In addition to the credit crunch, which triggered restrictive provisions in the program, Bush administration cuts to SBA’s budget haven’t helped, says the public policy and advocacy group’s program manager, Christian Gonzalez Rivera.

The declines were reflected in the falloff in SBA-backed loans to minority businesses provided by some of the country’s major lending banks. They include Bank of America, which Rivera says has been the “traditional leader” in the field. Its minority loans fell by 73 percent, according to data obtained from the SBA.

Doing better, according to Rivera’s survey: JPMorgan Chase & Co. and Citigroup Inc. San Francisco’s Wells Fargo & Co. came in fourth in number of minority loans given, and eighth in the percentage of all its SBA-backed loans. That was a considerable improvement over previous years, said Rivera.

The Greenlining Institute’s report was sent to the major banks on Monday. To read or download a PDF of the report go to links.sfgate.com/ZFQA.

Give and ye shall receive: The accounting firm, PricewaterhouseCoopers looked as though it joined the corporate meanies by canceling its holiday parties. But wait. It says it will donate the money saved - $1.5 million - to charity and will give 10 hours of paid time off for staff to volunteer for the cause of their choice. Among the San Francisco charities it will be donating to, PwC tells us, are the Boys and Girls Club and the San Francisco Food Bank. PwC says it aims to provide enough for more than 70,000 meals a day in San Francisco during the holiday season.

Food for the fired: Helping Yahoo employees about to be laid off before the holidays, San Francisco’s TokBox, an online video service, says it will have a taco truck outside at Yahoo’s Sunnyvale headquarters today. It addition to the free tacos, it will have a list of job openings on hand.

By Melissa Evans, Staff Writer
contracostatimes.com
Posted: 12/03/2008 11:04:27 PM PST
Updated: 12/04/2008 10:32:40 AM PST

Fifteen dollars a month doesn’t sound like a lot of money - except if you’re living on a fixed monthly income of about $1,650, and rent, food and energy costs are soaring, too.

Many seniors, particularly those straddling the line of low-income, may see steep increases this year in their monthly premiums for Medicare’s prescription drug plan known as “Part D.”

“It seems like everything is going up,” said Frank, 70, a San Pedro resident who didn’t want his last name used. “Me and my wife budget everything down to the nickel. There’s only so much you can handle with a limited amount of money.”

Frank and his wife, Doris, who pay about $23 a month now for prescription drug coverage under an AARP plan, will be shopping around due to the roughly $15 increase they’ll experience in 2009.

The open enrollment period for Medicare drug plans lasts through Dec. 31, the only time seniors can change their plans during the year.

In 2009, the number of plans offered in California is decreasing, and under many of the non-HMO plans, premiums are rising with fewer drugs being covered.

Those who don’t check their plans to make sure their prices are the same, or that the plan still covers the drugs they need, may be surprised come January, health advocates say.

“Everybody receiving drug coverage under Medicare should sit down and check their plan,” said Sandy Risdon, program manager for Health Insurance Counseling & Advocacy Program
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(HICAP) in Los Angeles, which helps seniors with Medicare. “Even if your plan hasn’t changed, another one might be better. You could be saving some money, or getting more drugs that you need.”

The National Senior Citizens Law Center is particularly urging seniors who receive a low-income subsidy, which covers the total or partial cost of premiums, to review their plans before the end of the year. About a quarter will not be fully covered in 2009.

The majority of these residents, about 200,000 in California, will be reassigned by the government to a new plan that falls within an acceptable price range. However, the government does not take into account what drugs these seniors need.

Low-income seniors may find themselves unable to access their current medications, or will be getting a bill in January for a monthly premium - or both, said Hector Javier Preciado, health policy director at the Greenlining Institute, a public policy research group.

For those who do not receive a subsidy and are covered under the standard Medicare drug plan (as opposed to a Medicare Advantage plan with a private HMO), about 80 percent of beneficiaries will see changes in 2009, according to Avelere Health, a health advisory group.

Some of the biggest price increases will occur in California. Two of the most popular plans in the state, the Humana Standard plan and the AARP Medicare Rx plan, will jump by 78 percent ($23 a month now to $40.90) and 60 percent ($21 a month now to $33.50 in 2009), respectively.

Given the economic downturn, including diminished retirement savings, drug plan changes couldn’t come at a worse time, seniors say.

“It makes a big difference,” said Frank, the San Pedro resident, who does not receive a low-income subsidy.

Many seniors are unaware of the changes, or don’t want to face the hassle of getting used to new providers, many say.

“It can be very confusing for a lot of people,” said Ken Dyda, president of the Peninsula Seniors.

There are about 1 million Medicare beneficiaries in Los Angeles County, the highest number of any county in the nation. Residents in California have 33 Medicare health plans to choose from, and 51 Medicare drug plans.

The number of low-income plans in the state dropped sharply from a high of 14 in 2006, the first year of the Part D program, to six in 2009.

Joyce Furlough, executive director of CareMore Health, which offers an HMO drug plan for South Bay Medicare beneficiaries, said it was probably inevitable that the number of options diminished.

“There were initially so many options, hundreds of plans, that I think it was causing a lot of difficulty in making a decision,” said Furlough, whose company just opened an office in Torrance. “Do we really need 200 prescription drug plans?”

CareMore, like most HMO options, doesn’t plan major changes in 2009. But she and others agree that seniors need to be vigilant about their health care.

Today, the Greenlining Institute released its annual report card ranking the performance of top financial institutions in SBA lending to minority entrepreneurs in fiscal year 2008. The report will be sent to the top management of the nation’s largest SBA lending institutions in order to foster competition in lending to minority-owned small businesses. The findings are based on the verified data for fiscal year 2008 provided to Greenlining by the SBA through a Freedom of Information Act request.

Our results show that Bank of America, JP Morgan Chase, and Citibank are the leading institutions in the nation in SBA lending to minority-owned small businesses.

The Greenlining Institute evaluated these institutions in terms of the number of SBA loans they originated to African American-, Asian American-, and Latino-owned businesses, as well as the percent of total loans and the loan volume going to minority-owned businesses.

Greenlining is issuing this report at a time when SBA-backed lending is down 30.3% nationally, including a decline of 39.3% in California. Disaggregated by race, SBA lending to:
• Latino(a)-owned businesses decreased 45.3% nationally and almost half (48.4%) in California.
• Asian American-owned businesses decreased 30.8% nationally and 40% in California.
• African American-owned businesses decreased 19.7% nationally and 20.8% in California.

Greenlining produced this study due to the SBA’s refusal to conduct their own analysis of SBA lending to minorities.

Greenlining Recommends Expansion of the SBA
Greenlining will be urging President-Elect Obama and future Secretary of Commerce Bill Richardson to totally revamp SBA’s purposes, practices, and funding. Greenlining has already met with a number of key Congresspersons, including the heads of the three minority congressional caucuses to urge that the SBA budget be increased from less than $1 billion to $12 billion, which is approximately its level in 1978, after adjustments for inflation. Secondly, in order to spur more job creation, Greenlining is urging that at least half of the SBA’s new budget be used for technical assistance and capacity building. In addition, Greenlining will use this report to urge that President Elect Obama’s proposed $500 billion economic stimulus plan include at least $50 billion in assistance to small and very small businesses that create jobs.

Jorge Corralejo, Chairman of the Board for Latino Business Chamber of Greater Los Angeles said, “The SBA has not worked for our nation’s 5 million minority-owned businesses. We are the fastest-growing segment of the economy, and could help President Obama create the 2.5 million new jobs he seeks.”

A new compromise from foundations might be cause for some optimism.

The everyday challenges faced by the people in many neighborhoods seem far removed from the American Dream these days: the lack of good housing and jobs, poor health, immigration raids, the foreclosure crisis, failing schools and all-too-common homicides.

As advocates for economic empowerment and racial equality, my peers and I struggle daily to find homegrown solutions to these problems. We spend our time, often with limited resources, working nights and weekends to address the social and economic hardships faced in our communities. Most of us spend countless hours fundraising, often with limited success, to address the challenges we face. We wonder why we are all so broke while billionaires spend upwards of $40 million to take a trip to outer space.

Advocates for racial justice who struggle for years or decades at a time to bring opportunities to our nation’s underserved communities should have hope. It appears that just beyond the desert there is a rainforest flowing with philanthropic dollars. Consider this statement from the Foundation Center’s website: “The country’s more than 72,000 grantmaking foundations increased their giving to $42.9 billion in 2007, an estimated 10 percent gain over 2006.” The Foundation Center goes on to report that there was a 12 percent growth in foundation assets in comparison to the previous year.

Unfortunately, communities of color did not receive their fair share of this $42.9 billion.

While there is no available data on grant-giving to communities of color for 2007 yet, there have been numerous studies and reports over the years showing that foundations are not serving people of color on an equitable basis. Steve Gunderson, a former Republican congressman and now president and CEO of the Council on Foundations, admitted in a 2006 video on philanthropy that “foundations do not adequately serve minorities on a percentage basis.” What Gunderson meant in his interview was that foundation dollars are not equally distributed amongst all U.S. residents and that some groups, in this case communities of color, were being short-changed by the foundation community. Some would call this the equivalent of receiving a check marked “insufficient funds.”

In fact, the Applied Research Center published a study in 2004 entitled Short Changed: Foundation Giving and Communities of Color. A major finding in the study was that “grants to communities of color fell from a peak of nearly 10 percent of all grants in 1998 to 7 percent in 2001.” The findings coincide with data from the National Committee for Responsive Philanthropy and with the work of former Secretary of Labor Robert Reich, who estimates that a mere 10 percent of philanthropic dollars reach the poor and underserved. The Greenlining Institute, a multi-ethnic public policy institute in California where I am the incoming executive director, followed up with a report in 2006 that found a mere 3.6 percent of grants in 2004 invested in organizations led by people of color.

Despite this history, the foundation community has disputed these studies, attacking them on the grounds of what they call poor methodology and unreliable data. At Greenlining, we requested meetings with foundations on numerous occasions to determine what the best methodology would be for tracking grants to communities of color, but we didn’t receive a response. And on many occasions, we requested diversity data from foundations, only to be turned away or completed ignored. These, of course, being the same foundations that demand diversity data from prospective grantees.

Given the methodology disputes and lack of cooperation from foundations in sharing data, leaders in the California state legislature introduced The Foundation Diversity and Transparency Act (A.B. 624) that would have required foundations with assets of $250 million and more to report basic diversity data on an annual basis. Had it passed, it would be the first of its kind in the nation. Instead, a compromise was brokered in June. Ten of California’s largest foundations agreed to come up with a plan by the end of this year to invest millions in nonprofit organizations that are led by and that serve people of color. They also agreed, at least on paper, to diversity and to nurturing a new generation of leaders from communities of color.
Yes, many of you might be rightly asking, “Where are the details?” I agree. The details are vague, but the promise and commitment from the 10 foundations are strong, and I will be one of many who will work diligently to ensure that this historic partnership is not for communities of color but rather with communities of color. This is an important distinction that will lead either to the success or failure of this important campaign.
But the journey to reach this compromise is telling. Philanthropy groups hired three lobbyists to kill A.B. 624 even though the legislation would have been consistent with other pieces of state legislation that require government bodies and corporations to track and disclose race and ethnic data.

Philanthropy’s frenzied response to A.B. 624 was surprising, to say the least. We witnessed respectable community advocates use terms such as racial mandates, racial quotas and affirmative action-as if Ward Connerly has succeeded in making that a negative concept-to describe A.B. 624. Foundations withheld funds to organizations supporting A.B. 624, and some were creating a campaign of terror by threatening to pull funds from the fortunate few organizations that receive grants, saying they would leave California altogether if A.B. 624 passed.

Fortunately, the debate around A.B. 624 has led to other positive developments. The Council on Foundations, the premier association representing foundations, hosted a historic super summit in May with discussions on race as a strategic focus. In addition, the Northern California Grantmakers has commissioned its first study on race in philanthropy. The results were expected to be released this summer as this issue went to print. These may be described as baby steps, but nevertheless, they are good steps.

Other states are responding as well. Community leaders in Florida, New York and New Jersey are urging their lawmakers to introduce similar legislation, and lawmakers in Pennsylvania are currently conducting background research to determine if a similar bill would be appropriate for their state. We hope these efforts across the country will encourage the U.S. Congress to take the next step and make this a national public policy issue.

While many feel sadness and anger at philanthropy’s efforts to kill A.B. 624, and some are naturally wary of what is to come from the new compromise, we are optimistic that these difficult debates and discussions might give birth to a new philanthropic reality that offers a better future. Foundation leaders who are ready to embrace racial equity will find many new allies like us ready to join them in building a new and more effective philanthropic movement that will once and for all fix our schools, stop the killings and make our country a symbol for how communities can live together without large disparities in health, wealth and opportunities.

Businesses that politicians deem vital to the national interest aren’t being allowed to fail in America today, and the bigger they are, the more help they get from the government. So it’s not much of a surprise that the fine points of yet another bailout package are being worked out behind closed doors, this time for Citigroup.

Again, not surprisingly, the latest recipient of government largess is a big donor to political candidates and parties. It’s the 15th largest corporate giver, according to the Center for Responsive Politics, donating $25.1 million since 1989 in roughly even portions to the two parties. When Citigroup begged for taxpayer help, the Bush administration and congressional leaders took the call. Don’t expect a policy change from President-elect Obama’s incoming Secretary of Bailouts, Tim Geithner, and Larry Summers, soon to be head of the National Corporate Welfare Council.

It’s just the latest in a never-ending series of bailouts that Chicken Little commentators and status quo fetishists say we simply must have — or else. Companies aren’t even being asked to submit to the minor indignity of a bankruptcy proceeding before lawmakers rush in with 18-wheelers full of cash. It’s easier just to fork over taxpayer money. Forget Joseph Schumpeter’s “creative destruction.” Today the rule is survival of the un-fittest.

The complex bailout plan hatched over the weekend for Citigroup calls for the federal government to back about $306 billion in loans and securities and invest about $20 billion directly in the mammoth financial services company. The Citigroup handout brings the potential tab for Uncle Sam’s ever-expanding bailout portfolio to almost $7.8 trillion or roughly half the value of all goods and services produced in the U.S. annually.

But is it necessary? So far all the bailouts collectively have failed to inspire much confidence in investors. The Citigroup rescue may lift stock prices briefly but don’t count on it giving rise to long-term bullishness.
AND IF EVER THERE was a company that didn’t deserve a bailout, it’s Citigroup, a Big Government lovers’ bank that funds just about every trendy left-wing cause in America.

Long before it started drowning in red ink, the poster child for so-called corporate social responsibility was a longtime donor to left-wing pressure groups such as Jesse Jackson’s Rainbow/PUSH Coalition and Henry Paulson’s Nature Conservancy. In tax year 2003, Citigroup’s foundation gave 20 times more money to groups on the left than to groups on the right, according to Capital Research Center’s 2006 study of Fortune 100 foundation giving. (Foundation Watch, August 2006.)

Citigroup’s foundation has given a staggering $1.4 million to the alarmist World Resources Institute, as well as $509,000 to ACORN in recent years. The ACORN funding included a $500,000 grant to ACORN’s American Institute for Social Justice, which offers Saul Alinsky-style training in community organizing. Other donations to liberal groups include the Aspen Institute ($762,500), Rainbow/PUSH ($750,000), Nature Conservancy ($380,000), Rainforest Alliance ($200,000), and the Council on Foreign Relations ($50,000).

The company’s 7th Annual Citizenship Report is a dazzling compendium of all the supposed good works Citigroup claims to be doing — with its shareholders’ money. It includes reports on its commitment to diversity and to “sustainable” economic development, along with friendly greetings from Mindy Lubber, president of Ceres, the enviro-leftist investment network, and Janet Murguia, head of the liberal National Council of La Raza.

La Raza, by the way, is the same group, that, along with ACORN and the Greenlining Institute, helped to cause the subprime mortgage meltdown. After decades of demanding more loans for racial minorities, the group performed a dramatic about-face as mortgage markets collapsed, suddenly warning that lenders, realtors, and investors who bought up subprime loans could be sued under a federal law that forbids housing discrimination. It was the lenders’ responsibility to “match families to the sustainable loans that they should have gotten in the first place,” said Murguia.
But in the Citizenship Report, Murguia is all smiles. She asserts that “[b]y working together, NCLR and Citi can effectively tackle the barriers to asset development that Latino families face and eliminate the racial-ethnic wealth disparity.”

Attempting to eliminate that wealth disparity worked out really well, didn’t it? Now Citigroup faces extinction in large part precisely because it signed on to leftist groups’ crazy push to give subprime mortgages to people who couldn’t afford to pay them.

MEANWHILE, VISIONS of fat underwriting fees and commissions are dancing in Citigroup’s head. The company is keeping its fingers crossed that economy-crippling carbon emission controls are enacted. The company wholeheartedly buys into Al Gore’s global warming fantasies.

Citigroup Research put out a self-serving report, “Carbon Trading: The Sky’s the Limit,” last year, that’s irrepressibly bullish on future carbon-related investment opportunities. The paper cites the prediction by the CEO of Abu Dhabi Future Energy Co. (ADFEC) that in 2012 the carbon market will be worth $40 billion, and predicts that cap-and-trade is coming to the U.S. Not surprisingly, the report extols the virtues of controlling carbon dioxide emissions through carbon trading, rather than through the imposition of a carbon tax: Investment firms can’t earn commissions and fat underwriting fees from a carbon tax.

Last year the company said it intends to direct $50 billion “over the next 10 years to address global climate change through investments, financings and related activities to support the commercialization and growth of alternative energy and clean technology among the clients and markets it serves, as well as within its own businesses and operations.”

The boutique Citi Alternative Investments, which manages $60 billion in real estate, private equity, and hedge fund capital for Citi and select net high worth investors, reports that its Sustainable Development Investments (SDI) section expects to invest more than $2 billion of private equity over 10 years in a variety of green projects, including carbon credit markets.

Will Citigroup come to its senses and abandon its green crusade now that markets have tanked and every day brings more evidence refuting the theory of anthropogenic global warming? The jury’s out on that.

Why don’t we try a radical experiment and allow Citigroup — with all of its foolish investments and silly distractions wholly unrelated to making a profit — to fail?

That’s change we can believe in.

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Earlier this summer, Countrywide Financial’s most famous troubled customer received an altruistic bailout that saved his home. Now months later, despite attention from the highest levels of government, hundreds of thousands of anxious homeowners are still waiting for their reprieve.

Back in August, high-profile developer Donald Trump purchased the 7,000 square-foot home of “Tonight Show” sidekick Ed McMahon. He then leased it back to the 85-year-old TV personality, allowing McMahon to avoid foreclosure. “How could this happen?” Trump asked at the time.

Not-so-famous homeowners across the country are asking the same question. Few are getting specific answers.

Foreclosures continue at a record pace, according to the latest data. Just last month, 84,000 homeowners lost their homes despite calls from Congress to freeze foreclosure activity, a $700 billion bailout that was intended to buy toxic debt and an $8.68 billion legal settlement with Countrywide Financial Corp., the country’s largest mortgage broker.

Undeterred, the grassroots Foreclosure Freeze Movement that started in San Diego, Calif. with a simple protest less than a year ago has enjoyed enough success to press on.

The progressive idea of stopping the glut of foreclosures seemed like the wishful thinking of a radical fringe that gathered in San Diego in December 2007 to protest Countrywide’s predatory lending practices. Faith Bautista, executive director of the Mahubay Alliance, organized the protest in the hope of drawing attention to victims of a coordinated plan to sell risky, high-cost loans.

“We want to send a message that it can be done here, that this pattern can be changed.” Bautista said. “The City Council has to realize that every half hour another family is losing its home and something needs to be done.”

The conservative-bent city council and mayor were less than enthusiastic supporters. But the city’s rogue city attorney, generally despised by the mayor, the conservative newspaper and the business organizations, enthusiastically joined the effort.

Aguirre, a Democrat, became the first city attorney to sue a major lender when he sued Countrywide along with attorneys general from Illinois and California. Many other states soon filed suits of their own.

A string of victories followed for “The Movement,” as Aguirre and others like to call it. States like Massachusetts and California approved legislation restricting lenders from foreclosing on homes without taking steps to mitigate the loss.

California Attorney General Jerry Brown then released “shocking new details” that outlined the extent of Countrywide’s fraudulent and institutionalized predatory lending practices.

Emboldened by the high-profile attention, The Greenlining Institute and The California Reinvestment Coalition dashed off a letter to Brown and to Bank of America Chief Executive Ken Lewis demanding a temporary moratorium on Countrywide foreclosures.

Though both Brown and Lewis spoke with The Greenlining Institute’s General Counsel Robert Gnaizda, neither supported a freeze on foreclosures.

But others did. The Federal Deposit Insurance Corp., which seized California-based mortgage lender IndyMac, gave national prominence to the foreclosure freeze philosophy. FDIC Chairwoman Sheila Bair initiated a temporary moratorium on foreclosures combined with a process of revising loans. In November, Bair told Congress the program had already helped more than 3,000 homeowners avoid foreclosure.

Sensing the momentum and frustrated by Brown’s unwillingness to act, Aguirre sided with Gnaizda and sought a temporary injunction in court against Countrywide foreclosures.

“Saving neighborhoods by keeping families in their homes is a better option than foreclosure,” Aguirre said, “and a national consensus supporting that wisdom is galvanizing. We are better served if we turn off the automatic foreclosure switch.”

Illinois Attorney General Lisa Madigan also sought an injunction, a move Brown refused to do.

“It’s really easy for Aguirre to make statements and what not,” Brown said, “but we have to act in a responsible way.”

But Aguirre wasn’t done. In September, he lobbied the San Diego City Council to declare a “foreclosure crisis.” The city attorney made his pitch during a council meeting, in which activists like Gnaizda and Bautista, a representative of the FDIC and members of the state Assembly spoke in favor of the resolution.

The council sent the issue back to a committee for further review. But, despite the setback, The Movement had expanded far beyond San Diego and the state of California.

Democratic Sens. Charles Schumer, Robert Menendez, Sherrod Brown and Bob Casey requested a temporary foreclosure freeze for Fannie Mae and Freddie Mac. The moratoriums, the letter stated, would allow “time to modify loans and make them affordable for struggling homeowners.”

Brown jumped back into the fray when he Madigan negotiated an $8.68 billion settlement with Bank of America, owners of Countrywide. Brown said the deal was the largest of its kind, far surpassing the $484 million settlement with Household Financial Corp. in 2002.

“This loan-modification program provides real relief for borrowers at risk of losing their homes,” Brown said.

Aguirre even called it “a home run.”

Aguirre followed his suit against Countrywide by suing Wachovia and Washington Mutual as well. Attorneys general from more than a dozen states issued a strong statement to 16 major lenders urging them to rework all predatory loans — the threat of additional lawsuits a clear and present alternative should they resist. At one point, Gnaizda said as many as 75 to 90 percent of all looming foreclosures could be avoided if the momentum continued.

But, as could be expected, investors facing the loss of billions in revised loans met The Movement’s swift rise to prominence with fierce backlash. Lawyers representing hedge funds spoke out against loan modifications and Bank of America issued statements putting them at ease, downplaying the prominence of revising loans.

Then on Nov. 4, The Movement lost its biggest ally. Voters bounced Aguirre out of office. His successor, Republican Judge Jan Goldsmith, vowed to drop the lawsuits against the mortgage lenders.

“I was not anticipating getting the shit kicked out of me in the election,” Aguirre said. “I got it from every angle: North, South, East and West. I united people who never worked together before. Unfortunately, I united them against me.”

The fight continues in daily negotiations, court proceedings and Congressional actions. This week, Gnaizda of the Greenlining Institute, went to Washington, D.C. and met with FDIC’s Bair, Speaker of House Nancy Pelosi and Rep. Barney Frank to lobby for The Movement’s goals.

“We cannot accept the Bank of America settlement as the gold standard,” Gnaizda said he told the political leaders. “Despite what Attorney General Brown says, Bank of America only expects to address 20 percent of their troubled mortgages. They don’t have the power to address those in the hands of the investors and hedge funds.”

The Greenlining Institute wants Bair and Pelosi to push for a national temporary freeze on all foreclosure activity for a period of 120 days. Legislation to that end is expected to be introduced this week, Gnaizda said.

The Attorney General’s office dismissed concerns by Gnaizda and Aguirre, saying they distort the value of the settlement. The settlement includes language, according to California Deputy Attorney General for Consumer Law Benjamin Diehl, which assures a “substantial majority of investors” are in agreement.

“We have the investors on board,” Diehl said, “so we have a program that is going to save homes.”

Clearly Donald Trump won’t save everyone, so it’s the governments turn. How effective they are remains to be seen, but rarely has a progressive movement caught fire so rapidly and rose to such a high level of prominence.

WASHINGTON (Legal Newsline)-Beleaguered homeowners received a powerful boost when President-elect Barack Obama said confronting the housing crisis will be one of his first orders of business upon taking office in January.

During a wide-ranging interview with the television program “60 Minutes,” Obama re-asserted the need to help people save their homes.

“We’ve got to set up a negotiation between banks and borrowers so that people can stay in their homes,” the president-elect said. “That is going to have an impact on the economy as a whole. And, you know, one thing I’m determined is that if we don’t have a clear focused program for homeowners by the time I take office, we will after I take office.”

Congress is expected to introduce legislation with the backing of the Democratic Party that would enact a 120-day moratorium on foreclosures, a policy urged by advocacy groups for months.

Despite legislative efforts in more than a dozen states, the $700 billion Congressional bailout and legal action from state attorneys general, foreclosure activity continued to rise in October, the 25th straight month that it has risen over the previous year, according to data provided by RealtyTrak inc.

On Friday, the Federal Deposit Insurance Corp. issued a loss-sharing proposal that could kick-start a systematic approach to modifying troubled loans. The proposal is based on the model FDIC used after it seized control of IndyMac, which FDIC Chairwoman Sheila Bair told Congress had already helped more than 3,000 homeowners reduce their payments and avoid foreclosure.

The plan would reduce payments by a combination of interest-rate reduction, principle reduction and the term extension. Federal funds could be used to buffer these losses, as opposed to the wholesale purchase of loans, according to a statement issued by the FDIC.

The program could work with 4.4 million troubled loans, resulting in half of the loans being modified, the report states.

The Greenlining Institute, an Oakland, Calif.-based advocacy group that helped start the foreclosure freeze movement, believes continued political pressure is essential in establishing a strong, consistent plan that will turn the tide of foreclosures across the country, according to general counsel Robert Gnaizda.

Gnaizda is in Washington D.C. this week meeting with FDIC’s Bair, Speaker of the House Nancy Pelosi, D-Calif., and House Finance Chairman Barney Frank, D-Mass.

Despite recent announcements from lenders like JP Morgan Chase and Citibank that they would begin working with homeowners to modify loans, Gnaizda believes hedge fund investors that own many of these troubled mortgage securities will block the banks from modifying loans.

“Greenlining is quite concerned,” Gnaizda told Legal Newsline, “that despite its ambitious rhetoric, these banks may be incapable of carrying these plans out. There is considerable question if Citigroup can remain a viable financial institution of significance by the middle of next year.”

But the California attorney general’s office told Legal Newsline on Tuesday that the JP Morgan Chase and Citibank are following the successful lead of the state’s settlement with Countrywide Financial Corp.

“We have the investors on board,” Diehl said, “so we have a program that is going to save homes… The program is being lauded nationally and followed by other lenders as witnessed by recent announcements from JP Morgan Chase and Citibank.”

Under the terms of the $8.68 billion settlement, Countrywide will provide hundreds of loan counselors to work with troubled homeowners on Dec.1. Citibank said it too will have loan counselors ready to try to modify loans and reduce foreclosures, in an announcement the company made last week.

Gnaizda said he’d like to see an even simpler approach adopted.

“All of these financial institutions should cut back on bonuses and stock options of its top executives and use those funds for loan medications,” Gnaizda said.

To illustrate his point Gnaizda said recent reports of the five largest investment banking firms on Wall Street paid billions in such bonuses just last year, and one company paid more than $200 million to just its top three executives.

“It would be a considerable pool of money,” Gnaizda said.