MARCH 1999 ·
VOLUME 20 · NUMBER 3
T H E F R O N T
Visit the Greenlining Institute"s web page < www.greenlining.org> and read about one of California"s premier public policy groups representing poor and minority consumers.
Its self-described purpose is "to promote low-income and minority economic development and increase minority community participation in policymaking."
In California, the Greenlining Institute is considered a major public interest group that fights insurance company and bank redlining.
But nowhere on the group"s web page -- and nowhere in the hundreds of newspaper articles written about the group over the years -- is there any indication that a big chunk of the group"s funding comes from those same giant corporations the Greenlining Institute was set up to counter.
Over 80 percent of the Institute"s $1.1 million budget in 1997 came from major corporations, according to the group"s most recent financial disclosure statement filed with the Attorney General of California.
In 1997, Union Bank gave $235,000. Southern California Edison gave $114,494, Merrill Lynch $88,489. And on down the list.
The group"s executive director, John Gamboa, says that for 1998, the group"s corporate funding was down to about 65 percent of the total budget because the group has taken in more money recently for intervening in regulatory agency proceedings.
Gamboa openly questions whether the money is affecting his group"s policy decisions.
"The companies fund us hoping that the money that they give us is going to temper our advocacy against them," Gamboa says. "I don"t know if it does or not. When you have a relationship with people, sometimes it does happen. I like to think that it doesn"t. If you did a good analysis, almost every single entity that has funded us, we have opposed them in some legal arena."
"We take it from both sides," Gamboa admits. "The companies say that we are creating extortion, that we are shaking them down. Other people say we are being bought off."
And Gamboa says the Institute has lost four big funders recently because of the group"s activities.
"In the last two years, State Farm has refused to support us because we opposed their acquisition of a thrift," he says. "Sumitomo Bank used to give us money every year, but they stopped because we turned them into the Labor Department for its minority hiring practices and its lending policies. San Diego Gas & Electric won"t give us money right now because we opposed their merger with Southern California Gas. Bank of America cut us off because we opposed their merger with NationsBank."
But consumer advocates in California say that on many big bread and butter issues that affect the masses of California consumers, the Institute has pulled its punches and sided with its industry funders.
In 1998, the Institute sided with the utility industry in its successful campaign to defeat Proposition 9, an initiative that would have rolled back a taxpayer-funded bailout of the utility companies for bad nuclear investments, among others.
Gamboa doesn"t hesitate to play the race card when addressing the Prop 9 issue. "We took the side with over 3,000 community and low-income groups and opposed mostly white, liberal so-called consumer groups on it," he says.
He says that Prop 9 would have undermined carefully worked out affirmative action gains secured by the Institute and other minority groups during a two-year negotiation over the deregulation law. Prop 9 was defeated last year after the industry flooded the television airwaves with anti-9 ads.
But in a letter to Gamboa in October 1998 during the heat of the Prop 9 debate, Harvey Rosenfield, the key proponent of the initiative, questioned Gamboa"s motives.
"There is no choice to be made between rate savings under Prop 9 and affirmative action, unless you are referring to some private quid pro quo that you have arranged with the utilities in which Pacific Gas & Electric has threatened it will terminate its affirmative action plans unless Prop 9 is defeated," Rosenfield wrote. And Rosenfield asks whether the Institute"s opposition to Prop 9 is based on "ratepayer money [the utility companies] have given you... such that you are unwilling to bite the hand that feeds you -- even as that hand crushes the state"s ratepayers?"
Rosenfield wrote that the Institute"s stance on Prop 9 "is the latest in a series of deplorable betrayals by you... always accompanied by race-baiting letters in which you insist that white consumer advocates don"t know how to protect the poor."
Gamboa now says that he "knew that everyone was going to say, 'yeah, you are just on the side of the utilities on this because they have given you money in the past.""
"That is a legitimate thing to think, but you have to look at how long we fought [the utility industry] to get protection for our community on this," he says.
Asked whether the utility industry would have stopped giving money to the Institute if it had endorsed Prop 9, Gamboa says, "Even if we lost it, it wouldn"t have made a difference to us," he said. "We have varied amounts from different sources. We"ve turned down more money than that."
How much and when?
"When we first started the organization six years ago or so, Pacific Bell was planning on spinning off AirTouch, which was its cell phone division, its most lucrative division," Gamboa said. "Pacific Bell offered us a chance to do their minority marketing. They told us, 'You have all the contacts in the minority community, we would like to hire you to do our marketing in exchange for the Institute"s agreeing not to oppose the spin off of AirTouch." We said, 'If AirTouch is spun off, this is going to leave Pac Bell in such a weak financial condition that it will be ripe for a takeover." We lost. And they spun it off."
So, how much was the marketing contract worth?
"Anywhere between six and sixteen million dollars -- their full ethnic marketing," Gamboa says. "We would have been a contractor. It would have been like them hiring an advertising firm. We didn"t even pursue it."
"We probably could be bought and they probably could have bought us," Gamboa says.
If there had been enough dollars?
"Almost everybody in the world is for sale," he says. "I"m not saying we are pure. No one has ever reached our price. And I wouldn"t even start to negotiate on it. That was a time when we were really hurting for funds, when we first started in 1993."
You are being facetious when you say you probably could be bought?
"I am trying to be honest with you," Gamboa says. "Almost everybody has his price. No one has reached mine yet. I don"t want anybody to entertain it because I don"t want to be tempted. When Pac Bell offered us that, I was tempted because the amounts were so great."
-- Russell Mokhiber