Obama, Durbin Want to Meet with B of A on LaSalle Deal
Saturday, September 15, 2007
Printable FormatCrain Business Chicago By Steve Daniels
Sept. 15, 2007
(Crain's) — Sens. Richard J. Durbin and Barack Obama are seeking a meeting with Bank of America Corp. CEO Kenneth Lewis to discuss the impact of B of A's pending acquisition of LaSalle Bank Corp. — a move that signals a shift in what until now has been a largely mute response from Chicago's political leaders to the prospect of thousands of lost jobs here.
In a letter sent Friday, the Democratic senators asked to meet with Mr. Lewis and other senior executives "at your earliest opportunity."
The senators want to talk about the likelihood of retaining local jobs, the impact on local banking competition and the possible reduction of civic participation and community lending, the letter says.
"As you know, LaSalle Bank has long played an integral role in the local economy in Chicago, and has been greatly supportive of local philanthropic and community development initiatives," the letter says.
A B of A spokesman couldn't immediately say whether Mr. Lewis will meet with the senators, but he said, "We will certainly work with the senators to make sure we respond to their concerns and questions."
The question is whether the senators' action is too little, too late. Charlotte, N.C.-based B of A's $21-billion deal to buy LaSalle is set to close at the end of this month or early next month, and the nation's second-largest bank has refused to negotiate concessions on jobs, community lending and corporate giving with community groups.
The Federal Reserve Board approved the deal Friday, the last regulatory hurdle before it closes. A coalition of community groups failed to persuade the Fed to hold a public hearing in Chicago to air concerns about jobs and community participation.
Chicago's tepid political response until now to B of A's buyout is in stark contrast to what was seen in Boston four years ago, when B of A moved to buy FleetBoston Financial Corp., that city's biggest bank. Powerful Boston politicians from U.S. Rep. Barney Frank, then the top Democrat on the House's Financial Services Committee, to longtime Mayor Thomas Menino called on the bank to protect local jobs, make loans in low-income communities and commit to charitable giving goals. The result: concessions on all those fronts, including a promise to keep Boston-area employment levels the same as they were before the merger.
To date, Chicago Mayor Richard Daley has not been vocal on the issue, although the City Council recently passed a resolution calling on the Fed to hold a public hearing. The only local politicians who have signed on to the community groups' concessions effort are Rep. Luis Gutierrez, who sits on the House Financial Services Committee, and state Treasurer Alexi Giannoulias.
Also silent has been Rep. Rahm Emanuel, Illinois' most powerful representative in the U.S. House. A spokeswoman said he wouldn't be available for comment this week with family in town for the Jewish holiday. Rick Bryant, deputy district administrator for Rep. Jesse Jackson Jr., explained his boss's lack of public comment on the deal by saying that B of A had assured the congressman's office that "there will not be widespread layoffs."
A coalition led by the Woodstock Institute — a Chicago-based group that advocates for the availability of financial services to low-income communities — recently commissioned a study projecting that the B of A-LaSalle deal would result in at least 4,000 layoffs at LaSalle in Chicago.
Responds a B of A spokesman: "There will be cost reductions, and jobs will be part of that." He adds, though, that specific layoff levels haven't yet been determined.
In Boston, concessions wouldn't have happened were it not for the broad opposition to B of A's plans by numerous politically powerful people.
"I think it was critical to have really a broad array of voices expressing concern about the merger" of B of A with FleetBoston, says Thomas Callahan, executive director of the Massachusetts Affordable Housing Alliance, a statewide advocacy group that participated in the talks at the time.
So, why does Boston deserve specific commitments on jobs and community lending and charity while Chicago doesn't? The B of A spokesman says only, "Each (merger) transition is different. Each community has its unique priorities and needs."
"We need pressure from Chicago politicians to persuade the Fed to hold hearings," says Malcolm Bush, executive director of the Woodstock Institute, which is leading an eleventh-hour multigroup effort to win concessions from B of A before the LaSalle deal closes. So far, that group has met a few times with B of A executives, who've "listened and taken copious notes" but have promised nothing, Mr. Bush says.