Asking the Hard Questions: Truth, Reconciliation, and Corporate America

Joseph Pileri*

In the wake of the murder of George Floyd, many American companies issued public statements to support the Black Lives Matter movement and promised steps to address internal racial inequality and systemic racism. Telling Black Americans that their lives matter, Apple CEO Tim Cook promised to “bring critical resources and technology to underserved school systems” and “push[] progress forward on inclusion and diversity.”1 Nike declared Juneteenth, a day often used to commemorate the end of slavery following the Civil War,2 to be a paid holiday in honor of the emancipation of enslaved people.3 After initially refusing to allow employees to wear clothes supporting the movement, Starbucks announced that it would not only permit Black Lives Matter t-shirts but would also produce its own Black Lives Matter t-shirts for employees. In addition, Starbucks promised a $1 million donation to groups fighting for racial justice.4 JPMorgan Chase CEO was seen kneeling with rank-and-file workers in a show of support for Black Lives.5 These statements made by corporate leaders, and the efforts promised within, are laudable, provided that there is follow-through. However, these statements largely fail to acknowledge or examine how American companies have contributed to and benefitted from structural racism. JP Morgan Chase’s history, for example, dates back to 1799 with the chartering of the Company,

DOI: https://doi.org/10.15779/Z38599Z271. *. Chief Legal Officer at Mission Driven Finance, an impact investment firm headquartered in San Diego, California. Previously taught in legal clinics at Georgetown University Law Center and American University Washington College of Law. J.D. 2010, Harvard Law School; B.A. 2007, University of California, Los Angeles. I would like to thank Susan Bennett and Priya Baskaran for their helpful comments and feedback and for their mentorship and steadfast advocacy on behalf of racial justice in the transactional lawyering space. 1. Speaking up on racism, APPLE, https://www.apple.com/speaking-up-on-racism/ (last visited June 16, 2020). 2. Derrick Bryson Taylor, So You Want to Learn About Juneteenth?, N.Y. TIMES (June 19, 2020), https://www.nytimes.com/article/juneteenth-day-celebration.html. 3. Nike, NFL and Others to Start Giving Workers Juneteenth Off, ASSOCIATED PRESS, (June 12, 2020), https://apnews.com/article/be6a0c2746c2358b526ec29d6fd197c1. 4. Hannah Denham, In reversal, Starbucks will allow employees to wear ‘Black Lives Matter’ T- shirts, WASH. POST (June 12, 2020), https://www.washingtonpost.com/business/2020/06/12/starbucks- black-lives-matter/. 5.Id.; see Thornton McEnergy, Jamie Dimon drops into Mt. Kisco Chase branch, takes a knee with staff, N.Y. POST (June 5, 2020), https://nypost.com/2020/06/05/mending-jpm-chief-drops-into-mt-kisco- chase-branch/.

157 Berkeley Business Law Journal Vol. 18:2, 2021 a water utility that morphed into a financial institution.6 This institution witnessed such racist institutions as the Atlantic slave trade, the growth of slavery in the American South, the Civil War, Reconstitution, Jim Crow, redlining, mass incarceration, and predatory home lending. How were JP Morgan Chase and other corporate and financial institutions affected by these systems? As participants in American society, many companies reap the benefits and share some of the blame for today’s society—a society that brought Americans around the country into the streets, in the middle of the greatest pandemic in a century, to proclaim that Black Lives Matter. Translating statements in support of Black Lives Matters into real action will require that American companies take an honest look at their own role in this nation’s racial history. The United States never had a national process of truth and reconciliation regarding its treatment of Black Americans. A process of truth and reconciliation posits that the truth of human rights violations must be told publicly, including by the perpetrators, so that society may understand why these violations took place, how they may be prevented in the future, and what retribution or reparation is required to cure these harms.7 Truth and reconciliation requires that the oppressor acknowledge the truth before remedial steps can take place.8 A truth and reconciliation process will confront the history of the financial and business sector with structural racism. How many American companies owe their wealth and status to the plunder of Black communities? What pillars of the American economy rest on a foundation of stolen Black labor? And what of the countless smaller firms that, in one way or another, owe their existence at least in part to capital and resources stolen from Black Americans? It seems unlikely that such an effort, led by the federal government, will take place in the U.S. In the absence of leadership in Washington, D.C. on truth and reconciliation, American companies can and should take the initiative by asking themselves hard questions about their role in this country’s racist history and the plunder of wealth from Black, indigenous, and other communities. Companies that are serious about addressing racial injustice should not only make promises now but also audit their past for their involvement in and benefit from structural racism. The ways that American companies have contributed to and benefitted from structural racism are myriad and the subject of a great deal of scholarship. While a full calculation of the monetary benefit to companies of structural racism is beyond the scope of this article and, indeed, is the work of commissions such as those that I propose, several examples of historical and present monetary benefits

6. History of Our Firm, JPMORGAN CHASE, https://institute.jpmorganchase.com/about/our-history (last visited June 16, 2020). 7.See Jennifer J. Llewellyn & Robert Howse, Institutions for Restorative Justice: The South African Truth and Reconciliation Commission South Africa’s Truth and Reconciliation Commission: A Symposium, 49 U. TORONTO L.J. 355, 356–357 (1999). 8.Id.

158 ASKING THE HARD QUESTIONS readily come to mind.9 Enslaved people were worth more in 1860 than any other financial asset in the country; those held in bondage, of course, enjoyed none of their inherent financial value. Enslaved people were used as collateral for early mortgages, and those mortgages were combined and securitized so that they could be traded in financial markets.10 After the Civil War, insurance companies offered race-based life insurance plans that valued and consequently compensated Black lives at a lower price than Whites.11 In the twentieth century, banks conspired to deny mortgage financing to Black homebuyers through redlining and discriminatory lending practices.12 Decades after redlining was determined to be unlawful, banks continued to target Black neighborhoods to undertake predatory lending practices, ultimately foreclosing on those properties when Black borrowers were unable to make mortgage payments.13 The list of racist institutions and the involvement of corporate America with those institutions is long. This plunder is not just limited to the companies offering the mortgage loans or writing the insurance policies. What of the accountants who audited financials? And the lawyers who drafted contracts denying Black Americans opportunities to build wealth? What other companies benefitted from the exploitation of Black labor and Black consumers? Racist policies at every level of government allowed plunder to spread throughout the American economy. The point of truth and reconciliation is not to root out unlawful or criminal activity; most of this activity occurred within the bounds of the law. Laying this story out clearly is not a tool to punish beneficiaries of American racism. It is a condition precedent for reconciling with American racial injustice. Scholars and advocates have suggested truth and reconciliation processes to address our country’s racial history. Sherrilyn Ifill proposed a process to deal with the legacy of lynching in the United States, modeled after South Africa’s Truth and Reconciliation Commission.14 Such a commission would focus on “the responsibility of individuals and local institutions that promoted, condoned, or tolerated lynching.”15 Failure to do so could “continue to foment racial distrust and disconnection,” even decades after lynchings occurred and perpetrators died.16 Bryan Stevenson relied on similar principles of truth and reconciliation

9. See Mary Heen, Ending Jim Crow Life Insurance Rates, 4 NW. J. L. & SOC.L POL’Y 360, 363, 369– 370 (2009). 10. Matthew Desmond, In order to understand the brutality of American capitalism, you have to start on the plantation, N.Y. TIMES MAG. (Aug. 14, 2019), https://www.nytimes.com/interactive/2019/08/14/magazine/slavery-capitalism.html. 11. Heen, supra note 9, at 362. 12. See Ta-Nehisi Coates, The Case for Reparations, THE ATLANTIC (June 2014), https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/. 13.Id. 14. See Sherrilyn A. Ifill, Creating a Truth and Reconciliation Commission for Lynching, 21 LAW & INEQ. 263, 271 (2003). 15.Id. 16.Id. at 272.

159 Berkeley Business Law Journal Vol. 18:2, 2021 when planning the Memorial for Peace and Justice, the country’s first national monument to lynching victims in Montgomery, Alabama.17 In the United States, institutions of higher learning have begun efforts to understand, acknowledge, and reconcile with their past. Georgetown University, for example, was founded by slave-owning Jesuit priests and in 1838 sold 272 slaves to raise capital for the then-struggling university. The university launched an effort in 2015 to study its involvement in slavery and discrimination.18 With the goal of “memorialization and reconciliation” in mind, the university issued a thorough report and offered reparations in the form of financial assistance to descendants of the 272 slaves.19 Following outrage that Harvard Law School’s crest displayed the logo of an Antiguan slave-owning family, whose contribution to the university was used to found the law school, the school launched an initiative that resulted in the school abandoning the shield and building a memorial to enslaved people on its campus.20 These institutions benefitted directly from owning slaves, but they nonetheless exist on a spectrum with collateral institutions that benefitted indirectly from slavery and later from other types of institutional racism. Scholar Robin Lenhardt proposes race audits as a tool that local governments can use to “identify the sources of persistent racial inequality” and “uncover the specific structural mechanisms that create cumulative racial disadvantage.”21 These audits, Lenhardt says, would allow localities to understand “how their systems and procedures, past and present, may have contributed to racial inequity.”22 Lenhardt draws inspiration from “social audits” that companies use to assess a company’s impact on issues such as the environment, community outreach, and effects on marginalized groups.23 Although Lenhardt proposes race audits for local governments, such a tool could readily be adapted to American companies. Race audits conducted on American companies and financial institutions can be a small but important tool in the project of truth and reconciliation. This suggestion is not unprecedented: private sector actors have been involved in truth and reconciliation processes in similar settings. In South Africa, following the end of Apartheid in 1994, the Truth and Reconciliation Commission was formed to expose instances of human rights violations, allow perpetrators to disclose their involvement in those violations, and grant amnesty

17. Caleb Gayle, No Reconciliation Without Truth, THE NEW REPUBLIC, Apr. 23, 2018, https://newrepublic.com/article/148066/no-reconciliation-without-truth. 18. See Slavery, Memory, and Reconciliation, GEORGETOWN UNIVERSITY, http://slavery.georgetown.edu/ (last visited June 16, 2020). 19. See id. 20. Liz Mineo, At Law School, honor for the enslaved, THE HARVARD GAZETTE, Sept. 6, 2017, https://news.harvard.edu/gazette/story/2017/09/harvard-law-school-plaque-honors-those-enslaved-by- royall-family/. 21. Robin Lenhardt, Race Audits, 62 HASTINGS L.J. 1527, 1527 (2010). 22.Id. at 1534. 23.Id. at 1534–1535.

160 ASKING THE HARD QUESTIONS to those who were willing to come forward about their activities during Apartheid.24 Rather than seek to punish perpetrators, the Commission sought to shed light on the horrors of Apartheid, in the hope that doing so might allow the country to begin to acknowledge and deal with “the collateral effects of historic racial terrorism.”25 Wide swaths of White South African society participated in the Truth and Reconciliation Commission, and the Commission issued a report detailing the complicity of White South African society in Apartheid.26 The South African Truth and Reconciliation Commission was the first of its kind to examine the systemic involvement of the business sector in a country’s violent past and the first to recommend reparative measures, such as a wealth tax aimed at businesses.27 Businesses, lawyers, and media organizations all testified about their participation in Apartheid.28 Although the Commission found that South African businesses participated in Apartheid to varying degrees, the Commission found that “most [South African] businesses benefitted from operating in a racially structured context.”29 The report was noteworthy for finding that the private sector, on the whole, benefited from Apartheid and, consequently, shared some culpability for Apartheid.30 German society engaged in a difficult truth and reconciliation process following the Second World War. In contrast to South Africa, however, when Germany engaged in investigations on Naziism, German companies were not similarly implicated31 Ties between German companies and the Nazi regime are still being examined. For example, in 2019, a report commissioned by JAB Holding Company, which owns companies like Krispy Kreme Doughnuts, Jimmy Choo shoes, and Calvin Klein perfume, found that JAB enthusiastically supported the Nazis and used forced labor from German-occupied areas of Eastern Europe in its factories.32 Even this small acknowledgement that comes decades after fall of the Third Reich is laudable. Efforts in the U.S. to initiate corporate truth and reconciliation processes like these will require a multidisciplinary team of experts and community engagement. As an example, the Georgetown Working Group on Slavery, Memory, and Reconciliation employed historians, lawyers, English scholars, and

24. See Ifill, supra note 14, at 270, 305. 25. See id. at 311. 26. See TRUTH AND RECONCILIATION COMM’N, TRUTH AND RECONCILIATION COMM’N OF S. AFR. REPORT (1998). 27. Nicoli Nattrass, The Truth and Reconciliation Commission on Business Apartheid: A Critical Evaluation, 98 AFRICAN AFFAIRS 373, 373 (1999). 28. See Ifill, supra note 14, at 306. 29. TRUTH AND RECONCILIATION COMM’N, supra note 26, at 58. 30. See Nattrass, supra note 27, at 375. 31. See id. at 377. 32. See Katrin Bennhold, Germany’s Second-Richest Family Discovers a Dark Nazi Past, N.Y. TIMES (Mar. 25, 2019), https://www.nytimes.com/2019/03/25/world/europe/nazi-laborers-jab- holding.html.

161 Berkeley Business Law Journal Vol. 18:2, 2021 diversity and equity professionals in its efforts.33 This process is expensive and, if done correctly, takes time. It is a worthwhile investment. The failure to fully and honestly examine how we got to where we are as a country has prevented us from moving forward. Companies who are serious about addressing racial injustice have an opportunity to take leadership in auditing their role in America’s racial history. American companies were and are actors in a system that has often used racist policies to create racial inequality. They alone cannot remedy that inequality, but they can begin to ask themselves the hard questions that so many in this country have refused to ask themselves. Perhaps then we can have a conversation about where we go from here.

33.See Slavery, Memory, and Reconciliation, supra note 18; see also Truth Racial Healing, and Transformation, W.K. KELLOGG FOUNDATION, https://healourcommunities.org (last visited June 19, 2020) (describing that the W.K. Kellogg Foundation’s framework for Truth, Racial Healing & Transformation calls for discussions around a range of issues in order to understand systems that stand in the way of racial progress).

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