Today – We Honor Dr. King – His Courage, and Contributions to Our Nation

by Hank Boerner

Today we celebrate the birthday of a great American, a man who somewhat reluctantly became a “street warrior” battling for fairness, social justice and equality for the African-American community. And for all Americans, yesterday and today and into our future as a People.

While still a young minister (still in his 30′s), in his early pastoral years The Reverend Dr. Martin Luther King, Jr. became a fierce advocate for “Negro” rights. As he campaigned, Dr. King was jailed in Birmingham, Alabama for joining the civil protests underway in the early 1960s.

There in the jail cell, on scraps of paper he hid from his jailers Dr. King answered his critics, including fellow clergy, citing important Biblical precedent, important milestones and events in American history, and the emergence of new nations from former colonies in Africa and Asia. Old colonial empires were shattering.

But in the USA the “southern empire” of the post-Civil War era was mostly still intact; this nation had its own version of the South African system of Apartheid, including structured denial of voting rights for blacks and various Jim Crow practices. One day, he writes in the letter, the south will recognize its real heroes.

Dr. King writes: “One day the South will know that when these disinherited children of God sat down at lunch counters, they were in reality standing up for what is best in the American dream and for the most sacred values in our Judeo-Christian heritage, thereby bringing our nation back to those great wells of democracy which were dug deep by the founding fathers in their formulation of the Constitution and the Declaration of Independence.” Inspiring words!

The young church leader appeals for help in this letter; this document was released and widely read over time. Soon, he would have a much larger stage for his soaring commentary — a few months later on August 28, 1963 he mounted the steps of the Lincoln Memorial in Washington DC and faced perhaps up to a quarter-million people — white, black, brown — and they awaited his words…”I Have A Dream” is still his best-known work.

But when you read this letter from inside a jail cell once again (or for the first time), see if the words don’t ring true for you across a half-century.

Born to a middle-class family, educated at Morehouse College and then in Boston at grad school (Boston University 1953, Ph.D.). Dr. King was not expected to be in the streets heading marches…he was born to lead from the pulpit, and the “higher pulpit” at that…in a big city church, for example, perhaps there in Atlanta where his father served as pastor at Ebenezer Baptist Church. (Which he later joined as co-pastor.)

Instead, early in 1963 (only a few years into his ministry) he finds himself sitting in an Alabama jail cell pleading for help, and calm, and social justice. He could not count on the Kennedy Administration for much help at the time – President John Kennedy and Attorney General Bobby Kennedy were then reluctant to anger the long-tenured southern senators and congressmen who ruled Capitol Hill. The Kennedy’s needed their support to win re-election in November 1964. And so we could say that the brothers were then also reluctant warriors to the civil rights struggle emerging in the 1960s.

Shortly after writing his epistle, Dr. King would be out of jail and eulogizing the four little African-American girls killed in a cowardly, racist bomb blast at their church in Birmingham…at least one of them a friend of another little girl, Condoleezza Rice, who rose to be our Secretary of State. (The bombing was on September 15, 1963.)

Dr. King continued to speak out and to be the national voice (and conscience) of civil rights activism, and the leader who could best appeal to the nation’s conscience, north and south, east and west; white and black.   He would be awarded the Nobel Prize for his non-violence campaigning in December 1964.

But then, in a short while — in June 1968 – US Senator Robert Kennedy would be announcing the slaying of Dr. King (in Memphis) to a crowd of African-Americans…and a dramatic change would occur in Senator Kennedy’s public attitudes toward civil rights. He would become a man with a mission that clearly included addressing the wrongs of racism.

And not long after that, sad to recall, it would be his brother, Senator Edward Kennedy eulogizing his late brother, Bobby, the presidential candidate (murdered in Los Angeles, June 5, 1968, as he won the California Democratic Party primary).   1968 – that was a terrible year – two leaders slain within months of each other.

But today there is a prayer for all of us as a People in the concluding words from that jail cell letter five decades ago.  Dr. King said, “Let us all hope that the dark clouds of racial prejudice will soon pass away and the deep fog of misunderstanding will be lifted from our fear-drenched communities, and in some not too distant tomorrow the radiant stars of love and brotherhood will shine over our great nation with all their scintillating beauty.” May that day be!

On this day that celebrates this brave, intelligent civil rights and religious leader, my thoughts go back to 1963 and that cold jail cell in Birmingham and I re-read the words of Dr. Martin Luther King, Jr..  (January 15, 1929-April 4, 1968)

I think about his personal and professional struggles when we celebrate his birthday, today, every year.  A  deserved honor, in my opinion.

He helped move this nation forward in many, many ways, during his very short life on Earth. Imagine if he had lived his biblical four score-plus years!  We are in his debt as a nation and People.

Note: This was in part derived from a commentary I authored in December 2007



Too Big to Fail/or Jail – Federal Judge Jed Rakoff Weighs In With His Views on the Financial Crisis Aftermath

by Hank Boerner

American bankers have had their share of nasty media headlines and uncomfortable conversations at congressional and regulatory oversight hearings.  And experienced the condemnation of the many for the nasty escapades that almost brought down the national economy. The excesses of the big money center banks (Citi, Bank of America, Goldman Sachs, Wells Fargo, other familiar names) have been well documented in newspapers, on cable and broadcast television, in some movies, and in a spate of best-sellers since 2008, The prosecutors in America (state attorneys general, US attorneys) have pursued some bankers in the courtroom.

But as The New York Times’ Gretchen Morgenson pointed out in her story of April 14, 2011, “…several years after the financial crisis, caused in part by reckless lending and excessive risk taking by major financial institutions, no senior executives have been charged or imprisoned…”

So what do these actions say about the cultures or the large financial institutions – the ones bailed out by the Federal government and were deemed “to big to fail.”  (And their leaders, too big to jail.)  As I characterized in my commentary during the 2008-2009 crisis, the leaders of the big financial institutions (which are “banks++) loaded everyone in the big yellow bus and proceeded at top speed toward the edge of the cliff.  Faster, faster — bonuses are at stake!  The public treasury kept the busses from hurtling all the way into the abyss. And taking the rest of us with them.

And so now we are tuning in to the aftermath of the great party of the first decade of the 21st Century, as bankers and yes, the rest of society, pretty much gorged on easy credit, loose regulatory oversight, lax controls in the companies, boards and C-suite that ignored risk, and were drawn like moths-to-the-flame to the sources of e-a-s-y money.  The party is over — but the clean up is still underway.  And will be for years to come.

The Federal and state prosecutors have been working against statutes of limitation to put criminal cases together and bring charges against high-level financial industry players.  Right now a trial is underway for another top manager at Steven Cohen’s SAC Advisors (the firm paid a hefty fine as well).

The large bank that was considered to have weathered the storms best — JP Morgan Chase — in the sunny days of the crisis aftermath is now busily writing checks to state and Federal governments — US$40 billion to date. The Huffington Post this week had a nasty story about the accumulated fines paid by JPMC in recent months.  The question hangs in the air – what kind of culture exists at this large institution that resulted in huge financial losses and fines for various kinds of errant behavior?  No doubt in books to come we will find out more.

in a remarkable piece in The New York Review of Books, United States District Judge Jed S. Rakof wrote, “…I do not claim that that the financial crisis that is still causing so many of us so much pain and despondency was the product, n whole or in part, of fraudulent misconduct.  But if it was, as various governmental authorities have asserted, then the failure of the government to bring to justice those responsible for such colossal fraud bepeaks weaknesses in our prosecutorial system that needs to be addressed…”

He points out that companies do not commit crimes, only their agents do that.  And yet companies are being prosecuted, not the top “agents.” The judge’s article — “The Financial Crisis: Why Have No High-Level Executives Been Prosecuted?” — asks,”… if the Great Recession was due, at worst, to lack of caution, then criminal law has no role to play.  But if it was the product of intentionally fraudulent practices by high-level executives, then failure to prosecute those responsible must be judged one of the more egregious failures of the criminal justice system in many years.”

He points out that in the 1970s, the junk bond bubble era, those who committed fraud were successfully prosecuted, “right up to Michael Milken” (at Drexel Burnham Lambert, who was considered “King of the Junk Bond”) After the Enron collapse, senior executive Jeffrey Skilling went off to jail; after the WorldCom collapse, CEO Bernie Ebbers was successfully prosecuted.

In contrast, not a single high-level executive has been successfully prosecuted in connection with the recent financial crisis…and with the a five year statute of limitations, it appears likely that none will be.  It may be too soon to ask why…perhaps no fraud was committed. Even though the Financial Crisis Inquiry Commission found signs of fraud everywhere it looked (and documented same in a lengthy public document that mentioned fraud 157 times).

The respected Federal jurist mentions the doctrine of “willful blindness,” where defendants cannot escape prosecution by shielding themselves from clear evidence of critical facts strongly suggested by the circumstances surrounding the crime.  But perhaps now, with so much at stake for large financial “supermarkets” that such blindness to certain behaviors is being baked into the culture…becoming part of the DNA of large financial institutions.  The Federal government itself does not escape criticism from the judge. He cites government involvement in creating the conditions that could lead to such fraud.

Judge Rakoff is well respected among other judges and among the prominent bar.  His criticism of the Department of Justice (for inaction) are stinging.  The SEC is no doubt watching closely (Chairwoman Mary Jo White is a former Federal prosecutor in NY).

I would Stay Tuned to the judge and his now very public proclamations on the subject of the ebbing financial crisis and possible wrongdoing.  Which may not be pursued at high levels in 2014…but do not rule out sweeping changes at some point in how the justice system looks at future allegations of corporate or executive level fraud calling for  thorough criminal investigation and aggressive prosecutorial action. Major changes many be in store for the U.S. Justice Department and the SEC with regard to public expectations when the next bubble occurs.

Judge Rakof’s article is worth reading – he is a judge on senior status for the Southern District of New York, and former Federal prosecutor who really know the territory of the financial industry – you can find it at:


Accountability in the Headlines – Public Governance is About the Culture the Leadership Creates

by Hank Boerner

The headlines and news broadcasts over the past few days are titillating and I think, a window into certain aspects of our culture of today. As well as insights into public governance and political management styles. All of which are relevant to the people of the great state of New Jersey (my family’s ancestral home), and way, way beyond, relevant to the people of the nation as the central player in the drama is a front runner for the presidential nomination.

First we have the spectacle of a popular governor, recently re-elected by handsome margins, who has done great things for this state, and was an effective leader in responding to the crisis of Superstorm Sandy, holding a very long (2 hours) press conference to state how sad and sorry and disappointed he was. That is, that members of his staff and a key appointee inconvenienced tens of thousands and probably posed a threat to human safety with their behind-the-scenes actions.

The central figure of the crisis is Governor Chris Christie, who is considered a front runner in the 2016 presidential sweepstakes on the Republican ticket.  He is well-known as being outspoken and not afraid to get in your face if you and he disagree.  Or if he thinks you are stupid.  And ask stupid questions (in his view). And in all of this he is not a bully, he protests.

The New York Times in the aftermath of the immediate September traffic crisis created by his trusted colleagues — but before the revelations in the headlines — published a story (half news, half commentary) about the governor’s record of bullying and political payback in recent years.

Then, shortly after the report the reputation crisis was on and being widely reported by other media — and subsequently detailed by release of 2,000 pages of documents this past week.  At the center of the critical event was the governor’s deputy chief of staff and his appointee to the bi-state Port of New York and New Jersey Authority.  Roads leading to busiest bridge crossing in the USA – the George Washington Bridge — were ordered closed. This is also a vital link (Route 80, Route 95) in the Interstate Highway System.

This four-day action late last year was said to be in retribution for the mayor of the town (Fort Lee) at the foot of the bridge for having backed the governor’s Democratic opponent (and for not backing Governor Christie).in the November race.  Which, political pundits point out, was to be viewed as a stepping stone toward success in 2016 as the presidential nominee of the Republican party. (Of course, not all Republicans agree with that assessment.)

Questions hang in the air — what were the aides thinking?  Were they trying to please the governor that they served?  Was this “payback” mode something that is quietly condoned or taken for granted in the administration – whether the governor knows about the details or not?  I’ve been there – i have worked for a powerful governor and probable presidential candidate and saw numerous instances of people doing things in his name. A great invoking, I called it.  “The governor wants…” works miracles at times. I know – I did it myself. Worked wonders, I remember, when people attempted to put obstacles in the way of plans.  But it’s high-risk game, too.  I became more careful as time went on about what would say the Great Man “wanted.”

Of course, if things go wrong there is also the plausible denial of the leader that can be employed.  Remember President Richard Nixon and the Watergate crisis?  President Ronald Reagan and the Iran-Gate crisis (arms traded by the USA, the Great Satan, to Iran, but the all-powerful leader of the free world did not know what was going on?).

In October 2010 with my fellow author, Mark W. Sickles, we published a guide for managers — Strategic Governance – Enabling Financial, Environmental, and Social Sustainability.  This was a book designed for the private sector but there are lessons as well for the public sector.  We wrote:  “The universal purpose of [corporate] governance is to integrate ethical, professional and industry values and standards into firm-level cultures that enable winning strategies, manage risk, meet the needs of the firm’s stakeholders, and fulfill responsibility for a sustainable world.”

We could substitute “firm” with “the public office or agency,” and corporate governance with public governance.  And stakeholders…that includes everyone involved in the public sector and its processes.

What values and standards, then, are appropriate for the public sector?  Much of the same – ethical behavior, professional values, managing (and avoiding) risk, meeting the needs of the people you serve…all are applicable.  So – in my view, as we wrote throughout the book, culture is central to success or failure in organizations, public or private or social sector..

Culture is the heart of effective governance.  Professor Mervyn King, former head of the Global Reporting Initiative and a prominent banker and business leader in his native South Africa, observed that organization are “incapicitated people” requiring leaders to act as their “hearts, minds and souls.” Think of the leader as the brain and the spinal cord of the enttity, which then is connected and extends to all of the nerve endings, which are connected to every cell of the organism.  What values and standards are instilled by the brain extends then to every part of the organization from the brain to the nerve endings..

That is in effect how institutional culture is shaped and instilled.  Mark and I shared this thought: The governance system is the network of interdependent components working together to achieve the stated goals of the whole [organization].

What are the lessons coming out of the dramatic dust-up in New Jersey?  We will learn more about the setting (the culture) in which senior colleagues of the highest elected official in the state conducted their affairs.  The thought is inspiration for the deed, someone observed. What were they thinking (those involved in the “stupid” affair, as the governor himself characterized). Who were they trying to please?  What gave them the idea that disrupting lives, threatening public safety, and causing in the end great embarrassment was a pretty nifty idea at the start?

At the start…I think we begin with culture…and from there we move to setting, tone, hatching ideas and putting them into action. Guided by culture. And then, at times, part of the culture can be to cover up and stone wall the media…and deny all.  And in the end…it is all about…the culture.

And setting the culture begins with the leadership and tone set at the top.  So..what leadership lessons can we draw from the New Jersey crisis?  (For one thing, bullying or not, tone really matters!)  The best leaders know this and are very careful about the tone they set. Others? Well, we see those results regularly in the headlines.

Your thoughts on this?

What’s Going Wrong in the Culture? Or is it Business-as-Usual and We Are Just Paying Closer Attention in the Era of 24/7 News?

by Hank Boerner

This is a busy week for journalists and commentators as personal crisis piles on crisis and new juicy details are revealed. As a long-time issue and crisis manager, for me the stories jump off the page (print and digital) and screen.  I think about the cultural underpinnings of the crisis du jour.   Lots more lessons to be learned here.

As a crisis manager, I observed over time that the culture that was established — the foundational, operating environment with its generally accepted practices — was a key determinant in what happened (what went wrong), what could go right in the response and restoration phase, and in the behavior of those involved, from leadership to rank and file. The dominant culture was the guide, especially for better-managed organizations, for the start of recovery and restoration (and in contrast, for ruination and agony in the worst cases).

In this global operating environment, there are also cultural norms and important differences that are determinants in the outcome of these affairs as well. Consider the case of the expelled diplomat from India, who was arrested and strip searched in New York City, and then invited to go back home.  Where she was welcomed and treated to better treatment than in the USA.

The norms in the USA  we can generally agree are the expectations of reasonable (“fair”) pay, limited work hours, fair treatment for those in our employ.  The government may be watching, or the media may pounce.  Reputations can be shredded quickly.

New York City-based Indian consul Devyani Khobragade brought a maid into the USA and (it is alleged and reported by media) forced her to work 100 hours weekly, limited her breaks, and prevented the unhappy worker from leaving the USA to return home (by withholding her passport). The New York Times account on January ii pointed out that in India, as she returned to her homeland, there was little outrage about the abuse of the maid.  People interviewed in India were more upset about the treatment of the diplomat (who was briefly jailed).  And about the way the USA – more puritanical in many ways from other countries – mattered more. Different norms, different cultures. Different outcomes.  Over time the two cultures involved (USA, India) may resolve differences r this may become a point of great contention.

And in France – the president, Francoise Hollande, is reported by Closer magazine to be having an affair with an actress 18 years his younger. (Political power itself is an aphrodisiac.) These revelations do not shock the citizens of France or its media.  “Public moralizing,” noted the USA’s Times, does not occur in France as in the USA. (Just ask Gary Hart or John Edwards, both of whom had presidential hopes dashed on such revelations. Remember the photo ops on the back of the yacht, Monkey Business? Or think about the public and private maneuvering of President Bill Clinton, who struggled to be the Comeback Kid after allegations and admissions of such behavior).

Personal privacy matters much more to the French than the personal high jinks adventures of its elected leaders. Yes, privacy matters in the USA, too, but not in terms of certain personal behaviors of those in public office or other high places (such as corporate CEOs like Mark Hurd of HP.)  In cases like these, for American media, privacy is out the window (the “public figure” line of defense) and targets are fair game. And a shot in the arm for readership, listenership or viewership at the peak. (Sure, attention wanes quickly in this era of 5 minutes of public fame and then it is on to the next big crisis story.)

Much of the coverage can be unfair or even untrue. Yes, we expect good behavior by our leaders and look to them for inspiration and guidance.  But our leaders are human, and so by definition not perfect. And the cultural setting is important (USA vs France, for example). And while the American leader is being taken down or taken apart, bad things can happen. (We are told by some authors that while President Clinton was dealing with the aftermath of dalliances, he took his eye off the ball and let Osama bin Laden get away from his African hideout before the September 11, 2001 attacks.)

So – in our culture, shaped by Puritan thinking 300 years ago and ever since, and our obsession with personal behaviors of leaders, do we place too much emphasis on the dalliances of our leaders?  Are all their private moments our public business?

While the general agreement is that they should be accountable for their behavior (it goes with the office), I also think about what the famed social philosopher and American editor, H.L. Mencken (1880-1956) had to say about this: “There is only one honest impulse at the bottom of Puritanism, and that is the impulse to punish the man with a superior capacity for happiness.  To bring him down to the miserable level of ‘good men,’ that is, stupid, cowardly, and chronically unhappy men.”  Wow – that sounds like some of the talking heads on cable weighing in our our latest personal crises.

Stay Tuned – the next personal reputation crisis is cooking out there, even for the most successful of our leaders.  Just ask Governor Eliot Spitzer.  Or Congressman Anthony Weiner. Yes, they brought in on themselves. But they know first hand about the dreaded media call – Gotcha!  Bad things follow. And we will all tune in, won’t we!

What do you think?



Tick, Tick, Tock – The Big Debt Clock

Tick, tick, tick – the debt clock hands move on.  Back in Spring 1985 I wrote a commentary…”Listening for the Debt Time Bomb Clock.”  I was concerned: the U.S. Federal budget was unbalanced (had been since FY 1969 under President Lyndon Johnson); government debt was being liberally issued (by a new era “conservative,” President Ronald Reagan); we were building a significant trade imbalance; and, tax reform was being hotly debated (resulting later in the 1986 tax reform measures, which in part was supposed to figure out to how to pay for government operations).

What troubled me was something not many folks were talking about:  The mounting debt levels of the government of the United States.  As I wrote back then…[pushed aside in the public debate about the above] or ignored is the ticking time bomb of our collective debt…debt of all kinds…Federal government debt (then at $7 trillion)…Third World debt…US household debt…state and municipal debt…corporate debt…and commercial bank and savings and loan debt…

American banks in the 1980s were being encouraged to lend out billions’ of dollars to sovereign borrowers [as public policy] in the developing world (recipients including Thailand, Nigeria, Brazil, Taiwan).  The “big nine” borrowers owed more than US$500 billion, which is more than $1 trillion in constant dollars. (Brazil then was the leader with 20% of the total.).  If the borrowers defaulted, banks could fail…or the US taxpayer could become the backstop. (We skirted that crisis but 23 years later the US government would have to bail the US banks out in spectacular fashion not because of foreign debt but because of the American appetite for debt, including sub-prime mortgage obligations.).

Back in the 1980s US government public debt was fast mounting — the “trillion dollar” level was reached about the time the country celebrated our bicentennial.  A decade later it was at $2 trillion (about $4 trillion in constant dollars).

Historical note – 1969 was an important year.  A former client of mine, Charles Zwick (CEO of Southeast Bank in Miami) used to tell folks that he was in charge in the OMB when the “last” budget was balanced in 1969…in the years after, presidents and the Congress frequently held the line on taxes but not on spending.  Give the folks what they want, Chairman Zwick characterized this…which is the practice of Republicans and Democrats alike.  Big government got bigger and bigger.

And so today we have a new FY Federal budget with US$3.77 trillion in spending and projected income of $740 billion less.  How long could you run your business or household on this kind of shortfall?  Well, with easy credit, maybe a long time.  The Federal government shows us how.  My App debt clock shows $17 trillion Federal debt on the books going into 2014…$61,000 owed for each of us.

How do we close the shortfall?  Issuing bonds.  Who invests in these (safe instruments)?  Here is where we are today — the major debt holders are…us.  40% worth.  The Social Security Trust Fund holds 16%; other Federal units, 13%; the Federal Reserve Banks, 12%; other (foreign) governments, 19%. (China, 8%; Japan 7%). The financial industry’s instruments hold but 6%. The Fed with its “quantitative easing” policy has been buying $85 billion monthly of debt.  Remember the days when we bought US bonds?  (Which is so not the way to invest for most of us.) The traditional US bond accounts for but 1% of the holders today of Federal debt.  (My source for this is Fact

So the question hangs in the air – how and when do we pay down the debt if “we” the government hold 40%?  Higher taxes?  Lower spending?  A combination?  What gets cut?  Wall Street interests are accustomed now to the Fed buying binge and slightly panic when rumors of reducing the “easing” gets going.  Are we all in this country permanently addicted to issuance of Federal government debt?

“Read my lips – no new taxes,” promised candidate George H.W. Bush.  He found out when he assumed the presidency that was not realistic. And he paid the price with a one term presidency. The lesson of that haunts the Republicans and some Democrats. Taxes to pay down debt?  We don’t see the prospect raised when Congress debates the debt ceiling or the national budget.

As I wondered aloud in my 1985 commentary…Our children face the specter of entering the workforce to begin their 40 years of toil carrying the load of national indebtedness…totaling what in their lifetimes? And with what effect?

Question we should be raising:  What dampening effect might the Federal debt have on our recovering economy? That would be a healthy discussion with business leaders lending their voice.

And, what lessons in public governance are we instilling in or passing on to our children?  Thinking about debt clocks, perhaps if we put a number of these in the halls of Congress and corridors of the White House, loudly ticking away the dollar amounts of the rising debt, rationale thinking might return to budget-making and deliberations over realistic tax policies. Like question of the tree in the forest question (does it make a noise if no one is there?), does Federal debt really matter to most folks if no one is really watching?  Tick, tick, tick…

What are your thoughts on this?