Magazine article American Banker

VIEWPOINT: N.Y. Fed Board Move Tone-Deaf on Public Service

Magazine article American Banker

VIEWPOINT: N.Y. Fed Board Move Tone-Deaf on Public Service

Article excerpt

Byline: Orson Aguilar

It's sad, but not much has changed since corporate greed and malfeasance nearly caused our economy to collapse. The Federal Reserve Bank of New York, assigned the job of protecting banking customers, recently named two CEOs, including Jeffrey Kindler of Pfizer, to fill their public interest positions.

One must wonder why the Fed could not find qualified directors, with proven track records of public advocacy, to serve the public good.

Pfizer, a so-called leader in serving the public good, was recently fined a record $2.3 billion by the Justice Department for fraudulent marketing of drugs.

Among the many allegations, Pfizer paid kickbacks to health-care providers to induce them to prescribe drugs for uses not approved by the Food and Drug Administration.

Further, Pfizer, under Kindler's leadership, lags behind on issues related to corporate responsibility. For example, Pfizer, unlike other corporations, is not transparent in its management diversity, philanthropy to the underserved, lobbying expenses and other key indicators.

Pfizer's recent merger deal, financed with Tarp dollars, raises conflict-of-interest issues with the Fed. Earlier this year, Pfizer announced that it would combine with Wyeth Pharmaceuticals, a deal that would create the largest pharmaceutical company in the world.

Of the proposed $68 billion merger, $22.5 billion is being funded through loans by five major banks. Four of those five - Citigroup, Bank of America, JPMorgan Chase and Goldman Sachs - received a combined $105 million in Tarp funds. During a time when minority small businesses are struggling togain access to credit, our taxpayer dollars are financing a major merger that will result in the loss of 19,000 jobs.

We also question why there hasn't been more of an effort to bring people of color to the board. …

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