Groveling Before "Reparations" Activists
by Peter Flaherty

In a November 15, 2004 letter to JPMorgan Chase Chairman and CEO William B. Harrison, Jr., I urged him to not to apologize for occurrences in the past that took place in very different circumstances and over which he had no control. "It is imperative that corporations resist the growing calls to pay slave reparations. Corporations are not legally or morally obligated to pay money just because their 19th century predecessors may have profited from slavery."

Apparently disregarding my warning, JPMorgan, the parent company of Bank One, recently disclosed that two of its predecessor banks in Louisiana allowed 13,000 slaves to be used as collateral on loans and took ownership of 1,250 slaves when the loans defaulted. As tragic as slavery was, it was legal in the U.S. between 1789 and 1865. The Constitution prohibits ex post facto laws, which are laws that criminalize conduct that was legal when originally performed.

The main objection against reparations, however, is moral. The notion of paying monetary penalties for what one's ancestor did is nonsensical. And if penalties were paid, the people getting it are not the victims but their distant descendants, many of whom are more prosperous than those who would have to pay.

The bank purportedly took the action in order to comply with a 2002 City of Chicago ordinance that any company doing business with the city must reveal ties to slavery. The bank apologized for its links to slavery and created a $5 million college scholarship fund for African-American students in Louisiana .

Instead of caving in to shakedown artists, the bank should have made the moral case against group guilt and in favor of individual sovereignty. This is an act of corporate cowardice. Nothing required this kind of groveling or the payment of $5 million in tribute. In fact, if the scholarships are race-based, JPMorgan is making a great moral error. Race-based scholarships operate off the same principle as slavery itself.

As I warned, giving in to such threats will not even work. Apologizing for alleged links to slavery will never satisfy the critics. That is how extortion works. Indeed, it has happened already. According to the Chicago Sun-Times, Conrad Worrill, chairman of the National Black United Front, said Friday, "The Bill Daley/JPMorgan Chase [offer] is insulting. It's a joke." William Daley is the Midwest chairman of JPMorgan Chase and brother of the mayor of Chicago ..

Lionel Jean Baptiste, an attorney representing plaintiffs in a slave reparations lawsuit filed in federal court, told the Sun-Times, "It's nowhere near enough." Baptiste claimed, "The demands of the plaintiffs were that the defendants establish a trust fund fully funded to address the ills of the black community. We're talking about education, health care, legal and family support services."

That case against JPMorgan Chase and other companies was dismissed without prejudice. The plaintiffs' amended complaint is now pending along with the defendants' motion to dismiss. One can expect that this will be the first of many more. Chicago City Councilwoman Dorothy Tillman has recently threatened to cancel a $500 million refinancing deal with Bank of America because it is allegedly tied to slavery through a long-defunct 19th century bank acquired through mergers.

In New York City , Councilman Charles Barron has just introduced a bill that would require that companies doing business with the city disclose whether they profited from slavery over 140 years ago. While it would only "set the record straight," it would provide the evidence needed by private parties to sue companies or take them to court, as in Chicago .

As I warned in my November 15 letter, "Paying compensation will only encourage more lawsuits."

Peter Flaherty is president of the National Legal and Policy Center (NLPC). NLPC recently published a 35-page monograph titled, The Case Against Slave Reparations, co-authored by Peter Flaherty and John Carlisle. It is available as a pdf at www.nlpc.org. NLPC promotes ethics in public life, and sponsors the Corporate Integrity Project.

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