Forum Post: Shouldn't We Be Outraged? Honorary Degree for Sandy Weill, Bankster Extraordinaire

Shouldn’t We Be Outraged? - an explanation of the upcoming protest against Sandy Weill and Rubin Armiñana at Sonoma State University’s graduation ceremony

“These capitalists generally act harmoniously and in concert to fleece the people.” – Abraham Lincoln

Do you think Lincoln was anticipating the music being made by Sanford Weill and Rubin Armiñana at the Green Music Center at Sonoma State University (Sonoma County, California)? Could he have imagined the shenanigans the modern financial sector would concoct to fleece the people or the charade of giving some back in the form of “philanthropy?”

Mr. Weill, at Citigroup and Travelers Insurance, and Rubin Armiñana, as president of SSU, have helped create the perfect storm, seriously affecting students’ ability to receive a quality education in a timely manner and without onerous debt. Public education is suffering and all we hear about is pension plans. This is a diversion. The #1 cause of this suffering is casino finance – the kind of “heads they win, tails you lose” gambling that created the Great Recession. No matter, Armiñana feels that one of the key architects of that recession deserves an honor.

Why? Because Sandy and his wife, Joan, gave $12 million to the university’s new (not yet completed) Green Music Center. Therefore, on Saturday, May 12th, Sonoma State University (SSU) is planning to bestow an honorary Doctorate of Humane Letters on Sanford (Sandy) Weill, former CEO and Chairman of Citigroup, one of the corporations we rescued. The local paper and university President Armiñana call Mr. Weill a renowned philanthropist. I call him a thief, because he stole that $12 million from you and me.

Those are pretty harsh words, but when was the last time you were able to buy Congress, the Treasury Secretary, and the President so that the laws you were breaking would be undone? In the last 15 years of Mr. Weill’s tenure, Citigroup executives gave $23 million dollars in contributions/bribes to their favorite, ready-to-be-bought candidates. That doesn’t include money for lobbyists. And, surprise!, the laws that governed the financial industry were loosened, resulting in a financial crisis long predicted by those who know where deregulation leads.

The Glass-Steagall Act, enacted after the Great Depression to protect us from a reckless financial industry, forbade the merging of insurance underwriters and banks. In 1998, Mr. Weill illegally merged Citicorp with Travelers Group. But he wasn’t worried, as we might be about breaking the law. He said “the legislation will change…we have had enough discussions to believe this will not be a problem.” His office sported a huge plaque with his photo and the words “Shatterer of Glass-Steagall.” President Clinton presented Sandy with one of the pens used to sign the deregulation. Weill hired Treasury Secretary Rubin and rewarded him with $115 million.

Over the years, Citigroup (Mr. Weill’s “baby”) has paid many fines ($3 billion for their involvement in the Enron scandal), so why would they continue to commit these crimes? Because it’s profitable (and profits are sacrosanct in this country, no matter how they’re made) and no one goes to jail (because you have to rob a corner store - not a country - to be sent to jail).

And Citigroup steals. Citigroup was fined for moving money from customer accounts into its own fund through improper computerized “sweeps.” As California Attorney General, Jerry Brown wrote that Citigroup “knowingly stole from its customers, mostly poor people and the recently deceased, when it designed and implemented the sweeps.”

If someone swiped an old lady’s purse and gave the money to charity, would you call it “philanthropy?” So why is it “philanthropy” when Sandy Weill does it? His lawyers will say he did nothing “illegal,” but that word has no meaning where money buys legality and the lack of money can put you behind bars.

We’ve reached one of those points in history where the difference in wealth and power between us and them is so huge as to be obscene. How did it happen? They (and we’re in this predicament because we forgot there is a “they”) bought the government. With very few exceptions, they do not work harder than you, aren’t smarter than you, don’t contribute more of value than you. They move money around. We do the work.

In 2005, Mr. Weill and Citigroup released an investment advisory entitled “Revisiting Plutonomy: The Rich Getting Richer.” Here’s an excerpt:

        Asset booms, a rising profit share and favorable treatment from

market-friendly governments have allowed the rich to prosper…[and] take an increasing share of income and wealth over the last 20 years …the top 10%, particularly the top 1% of the U.S. – the plutonomists in our parlance – have benefited disproportionately from...globalization and the productivity boom, at the relative expense of labor.

And then there were the subprime mortgages which helped create the recession, which continues to simmer below the surface of corporate profits. Such risky mortgages were once the province of small loanshark companies preying on the poor, uneducated, and black, primarily in the South. Sandy Weill brought that risk into the mainstream by buying up these companies – Commercial Credit, Primerica, and Associates First Capital. By 2000, Citigroup had become the loanshark, with almost three-quarters of its mortgages subprime.

What does this have to do with education and why should students and their families care about Mr. Weill? There’s no space here to list all the ways this undermined the economy, but it took money away from state and local governments, impairing their ability to finance education at all levels, including at SSU. It also gutted a vehicle for financing of individual educations – home equity loans.

The average student debt is $25,000 and that debt now adds up to more than credit card debt. Many students find their debt grows as they try to pay it down, not a surprise in an economy which can’t provide full-time work for more than half of new college graduates. This money should flow to pay for services and goods. Instead it goes to bailed-out banks, which find ways to avoid paying taxes, further hindering the financing of education.

Add to this a spending spree for new buildings on college campuses at a time when fewer people can afford to attend those colleges. College presidents around the country are erecting greater edifices to their greater glory (New York University comes to mind). President Armiñana is no exception. Sonoma State is $300 million in debt. The Green Music Center and the planned Student Center will require $7 million in debt service for the next 30 years? Once these Centers are up and running, SSU’s debt payment will have nearly tripled since 2007.

As a symphony fan, Sandy Weill wants a first-class music center when he comes to his $31 million Sonoma County house. There are county residents who want it, too. The arts are important for any society and, in a healthy economy, there’d be money for it. But for the wealthy, this is a way to take one more dip into the taxpayers’ pockets. The1%, which already doesn’t pay its fair share of taxes, buys the construction bonds and the interest for those bonds comes from your wallet.

So the tuition at Sonoma State has gone up more 300% since 2001, while its faculty is one of the lowest paid. Fees have gone up, not to finance education, but to pay for Armiñana’s increasing debt. Those fees will go into the pockets of bond buyers and traders. There are fewer classes, student to teacher ratios increase, enrollments decrease, and college educations become more out of reach.

Once, the United States was #1 in the percentage of its citizens who earned college degrees. Now, it ranks 16th out of thirty-six developed nations. Why is this okay with the 1%? The tale, of the increasing privatization of public education and the profits to be taken from you to pay for them, will have to wait for another time. In the meantime, Armiñana is bestowing an honorary degree on Weill. Shouldn’t we be outraged?

Susan C. Lamont

I am one of a group of citizens, students, and faculty protesting the awarding of an honorary degree to Sanford Weill by Sonoma State University. I am a peace and social justice activist (who turned my back when Henry Kissinger was awarded an honorary degree by Brown University in 1969), a founding member of Take Back The Wealth, and Coordinator of the Peace & Justice Center of Sonoma County. I guarantee students that, if they take part in this demonstration, they will look back on this day with a sense of pride that can never be achieved by ignoring it or being offended by it. More information can be found at shameonssu.org