New Orleans Foundations created by corporations and the superrich are multi-headed monster of tax havens and public relations that combine to whitewash a story for the people down below that makes us swallow rather than spit. The latest examples have Jeff Bezos, the Amazon founder and world’s richest man, claiming to make climate change his thing and BlackRock, the supersized private equity firm with $7.4 trillion under thumb, trying to carve a place for itself in philanthropy. Yes, it’s hard not to spit, isn’t it?
But, wait, there’s a kernel of truth that has escaped from this mass of puffery. The new head of the new BlackRock foundation without thinking became totally transparent in describing the planned pursuits of their new foundation as “an extension of what the firm does.” What BlackRock does too often is rip-and-run or perhaps more accurate wreck-and-ruin. The CEO Lawrence Fink has been collecting newspaper clips of his statements that maybe BlackRock will stop investing in companies that don’t at least genuflect in the direction of climate change and is tilting towards gulping down companies with better social and enviro records. Thus far, it’s mostly talk, while we look for action.
BlackRock has another foundation that claims to “build savings tools for lower-income individuals,” and like a lot of money machines pretends to care about financial literacy. The irony is painful. This is the same company hoarding formerly foreclosed properties for rent and resale and helping change the entire real estate market in cities like Memphis. In fact, the apple doesn’t fall far from the tree, most of their new foundation is being funded by its half of its $600 million stake in PennyMac Financial Services. PennyMac is a straight-line successor to predatory lender, Countrywide Mortgage.
Public Integrity was clear in a 2013 analysis of all of the subprime execs who have made comebacks and reruns once people could pretend to have forgotten the great recession.
PennyMac, a fast-growing company founded by former Countrywide Home Loans CEO and IndyMac director Stanford Kurland, is a sprawling concern that earns fees by originating loans in call centers and online. It consists of two intertwined companies: a tax-free investment trust that holds mortgage investments and an investment advisor that manages the trust and other investment pools, among other activities. PennyMac buys loans from pre-approved outside sales offices, bundles them and sells off the slices. The company manages other peoples’ mortgage investments, collects borrowers’ payments and forwards them to investors. It forecloses on properties and amasses portfolios of loans and mortgage-backed securities as investments.
Tell me this doesn’t sound like a late-night horror movie coming back at us again. BlackRock is probably exiting this investment and hiding it in a tax haven foundation to prevent reputational and financial damage when the whole thing explodes again.
As for Bezos, Amazon is now ranked in the top 200 companies emitting the most to impact climate change. Groups of his workers have been organizing and demanding he and Amazon address climate issues and their impact on the destruction within the company. His ex-wife just pledged to offload most of her share in the great giveaway with Gates, Buffet and the gang. The article in the Times about the Bezos Earth Fund said it was unclear what they wanted to do.
Not really, all of these projects start as clear expressions and extensions of their corporate interests, just as the new exec said. We again will take the hindmost.