by Mickey Huff
The bank Barclays, the most wealth-centralized corporation in the world, sold its global asset management division to BlackRock in 2009. The result is that Blackrock is now the single largest asset management firm, though Barclays remains one of the most wealth-centralized firms with company assets of $2.42 trillion.22
UNDERSTANDING THE FINANCIAL CORE OF THE
TRANSNATIONAL CAPITALIST CLASS
The 161 directors of the thirteen mostly centralized/largest asset management firms represent the central core of international capital. As such, these 161 people share a common goal of maximum return on investments for their clients and will seek to achieve returns sometimes by any means necessary—legal or not.
Authorities have deemed the largest banks “too big to fail,” and have responded to the banks’ criminal activities with weak reforms and no prosecutions.23 The American government has refused to prosecute any officials from the multitude of banks who have laundered billions of dollars for illegal drug cartels. Powerful banking corporations, such as JPMorgan Chase, have continually refused to comply with American anti-money laundering (AML) laws.24
This refusal to prosecute is often hailed as an honorable move that serves to protect all individuals from devastation. Thus, Assistant Attorney General Lanny A. Breuer explained the refusal to prosecute the bank HSBC:
Had the US authorities decided to press criminal charges, HSBC would almost certainly lost its banking license in the US, the future of the institution would have been under threat and the entire banking system would have been destabilized.25
Not only are these powerful corporations considered “too big to fail,” they appear to have become too big to tell apart. Traditionally, banks have been understood as separate entities, competing against one another in order to entice consumers to deposit funds and invest. Such competition theoretically forces banks to compete to offer the best rates. However, in reality, these banks found that competing against one another was less profitable than working together. Real izing that their interests lie side by side, the financial core of the TCC have been highly motivated to join forces—legally or not—to manipulate laws, policies, and governments to their advantage.
The ramifications of the lack of competition in the banking industry are devastating. Consider, for example, price-fixing scandals such as Libor or ISDAfix. JPMorgan Chase, UBS, and Barclays (among thirteen others) were implicated in the Libor scandal, falsifying the data that was used to create benchmark rates.26 Based on faked data, those rates affected the prices of everything from auto, home, and student loans to credit cards to mortgage and commercial loans, and even the price of currencies themselves. The Financial Services Authority in the United Kingdom fined Barclays $450 million, and several other banks are still under investigation.27
The ISDAfix scandal looks a lot like the Libor case. The same superpower banks are currently under investigation to determine whether or not they manipulated ISDAfix, a benchmark number used to calculate the prices of global interest rate swaps.28 Because cities and sovereign governments use interest rate swaps to help manage their debts, manipulation of those rates has far-reaching impacts, particularly for the poor and working classes, as economic safety nets are subject to “austerity” measures—i.e., budget cuts—that favor protection of financial capital.
Not only were rates illegally fixed and data falsified, but the offending banks also used individual consumers’ investments to engage in criminal activity. The Vanguard Group was accused of investing its clients’ money into illegal offshore gambling sites, prompting a class-action lawsuit under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Vanguard did not deny such wrongdoing, but a judge determined that when the plaintiffs (Vanguard’s clients) were harmed, they lost their money due to the government’s crackdown on such illegal gambling, rather than due to Vanguard’s investing in such sites.29 However, it is clear that if Vanguard had not invested client money in illegal ventures, there would have been no negative re-percussions from such a government crackdown. As journalist Matt Taibbi declared, “Everything is rigged.”30 Indeed it seems that the superpower corporate elite will never be made to pay for their crimes against consumers—we have yet to see such a prosecution.
Vanguard Group and BlackRock are major investors in Sturm, Ruger & Co., a leading firearms manufacturer.31 Though there is nothing illegal about such investments, we can wonder about the consequences of such a pairing. With the expansion of private police and military companies, the power elite are investing in the violent means with which to maintain and further their power.
With money comes power, influence, and propaganda. BlackRock and numerous other banks and Wall Street institutions are financially backing groups like Parent Revolution and StudentsFirst, whose agendas are to privatize and subsequently corporatize the public school system.32 The transnational capitalist class is laying the foundation for the privatization of the world. If public, democratic institutions—including schools, post offices, universities, the military, and even churches—become privately owned entities, then corporate interests will truly dominate. Then, we become neo-feudal societies where the reign of kings is replaced by private corporate ownership and the people serve as peasants.
We do not claim that any single person identified in this study, as one of the 161 individuals at the financial core of the TCC, has done anything illegal. We only point out that the institutional, structural arrangements within the money management systems of global capital relentlessly seek ways to achieve maximum return on investment, and that the conditions for manipulations—legal or not—always hold. As these institutions become “too big to fail,” their scope and interconnections pressure government regulators to shy away from criminal investigations, much less prosecutions. The result is a semi-protected class of people with increasingly vast amounts of money, seeking unlimited growth and returns, with little concern for consequences of their economic pursuits on other people, societies, cultures, and environments.
Estimates are that the total world’s wealth is close to $200 trillion, with the US and Europe holding approximately 63 percent of that total; meanwhile, the poorest half of the global population together possesses less than 2 percent of global wealth.33 The World Bank reports that in 2008, 1.29 billion people were living in extreme poverty, on less than $1.25 a day, and 1.2 billion more were living on less than $2.00 a day.34 Thirty-five thousand people, mostly young children, die every day from starvation.35 So while millions suffer, the TCC financial elites seek returns that speculate on the rising cost of food, and they do this in cooperation with each other in a global system of TCC power and control.
Who are the financial core of the transnational corporate class? As indicated above, the financial core of the TCC are directors of banks and asset management firms. The 161 directors who manage the top thirteen firms have very similar backgrounds and training. (See Appendix for names and affiliations. The full, detailed list is online at: http://projectcensored.org/financial-core-of-the-transnational-corporate-class/).
FINANCIAL CORE OF THE TRANSNATIONAL
CORPORATE CLASS
One hundred thirty-six of the 161 core members (84 percent) are male. Eighty-eight percent are whites of European descent (just nineteen are people of color). Fifty-two percent hold graduate degrees—including thirty-seven MBAs, fourteen JDs, twenty-one PhDs, and twelve MA/MS degrees.
Almost all have attended private colleges, with close to half attending the same ten universities: Harvard University (25), Oxford University (11), Stanford University (8), Cambridge University (8), University of Chicago (8), University of Cologne (6), Columbia University (5), Cornell University (4), the Wharton School of the University of Pennsylvania (3), and University of California–Berkeley (3), which is a public institution. Forty-nine are or were CEOs, eight are or were CFOs; six had prior experience at Morgan Stanley, six at Goldman Sachs, four at Lehman Brothers, four at Swiss Re, seven at Barclays, four at Salomon Brothers, and four at Me
rrill Lynch.
People from twenty-two nations make up the central financial core of the TCC. Seventy-three (45 percent) are from the US; twenty-seven (16 percent) Britain; fourteen France; twelve Germany; eleven Switzerland; four Singapore; three each from Austria, Belgium, and India; two each from Australia and South Africa; and one each from Brazil, Vietnam, Hong Kong/China, Qatar, the Netherlands, Zambia, Taiwan, Kuwait, Mexico, and Colombia. They live in or near a number of the world’s great cities: New York, Chicago, London, Paris, and Munich.36
Members of the financial core take active parts in global policy groups and government. Five of the thirteen corporations have directors as advisors or former employees of the IMF. Six of the thirteen firms have directors who have worked at or served as advisors to the World Bank. Five of the thirteen firms hold corporate membership in the Council on Foreign Relations in the US. Seven of the firms sent nineteen directors to attend the World Economic Forum in February 2013. Seven of the directors have served or currently serve on a Federal Reserve board, both regionally and nationally in the US. Six of the financial core serve on the Business Roundtable in the US. Several directors have had direct experience with the financial ministries of European Union countries, the G8, and the G20. Almost all of the 161 individuals serve in some advisory capacity for various regulatory organizations, finance ministries, universities, and national or international policy-planning bodies.
These 161 directors are part of Rothkopf’s superclass. Given their control over $23.91 trillion, Western governments and international policy bodies serve the interests of this financial core of the TCC. Wars are initiated to protect their interests, and to promote the free flow of global capital for investment anywhere that returns are possible. Identifying the people with such power and influence is an important part of any democratic movement seeking to protect our commons so that all humans might share and prosper.37
APPENDIX
FINANCIAL CORE OF THE TRANSNATIONAL CAPITALIST CLASS (2013)
BOARD OF DIRECTORS
Barclays PLC (assets $2.4 trillion)
Antony Peter Jenkins, Sir David Alan Walker, Frits van Paasschen, Michael Ashley, Hugh E. “Skip” McGee III JD, Tim Breedon, Fulvio Conti, Ashok Vaswani Brysam, Diane de Saint Victor, Shaygan Kheradpir, David George Booth, Simon John Fraser, Reuben Jeffery III, JD, Dambisa Moyo, Sir Michael Rake, Sir John Sunderland, Maria Ramos
BlackRock Inc. (corp. assets $22.3 billion; assets in management: $3.7 trillion)
Laurence Fink, Robert S. Kapito, James Rohr, Hsueh-Ming Wang, Murry S. Gerber, Thomas H. O’Brien, Jr, Sir Deryck Charles Maughan, David Komansky, James Grosfeld, William S. Demchak, Susan Lynn Wagner, Dennis D. Dammerman, Mathis Cabiallavetta, Abdlatif Al-Hamad, John Silvester Varley, Ivan Seidenberg, Thomas Montag, Marco
Antonio Slim Domit, Fabrizio Freda, Jessica P. Einhorn,
Capital Group Companies Inc. Assets Management: $1.07 Trillion
David Isador Fisher, Martin E. Diaz Plata, Ashley Dunster, Koenraad Foulon, Shaw B. Wagener, Leonard L. Kim, Guilherme Lins, Lam Nguyen-Phuong,
FMR Corporation: Fidelity Worldwide Investment (Family Controlled) Assets Management: $1.7 Trillion
Edward Crosby Johnson III, Abigail Pierrepont Johnson, Ned C. Lautenbach,
AXA (Assets Management: $1.4 Trillion)
Claude Bébéar, Henri de Castries, Norbert Dentressangle, Jean-Pierre Clamadieu, Denis Duverne, Jean-Martin Folz, Anthony Hamilton, Isabelle Kocher, Suet Fern Lee, Stefan Lippe, François Martineau, Deanna Oppenheimer, Ramon de Oliveira, Michel Pébereau, Dominique Reiniche, Marcus Schenck
State Street Corporation (Assets management: $1.9 trillion)
Joseph (Jay) L. Hooley, Kennett F. Burnes, Peter Coym, Patrick de Saint-Aignan, Dame Amelia C. Fawcett, David P. Gruber, Linda A. Hill, Robert S. Kaplan, Richard P. Sergel. Ronald L. Skates, Gregory L. Summe, Robert E. Weissman,
J. P. Morgan Chase & Co. (Assets management: $1.34 Trillion)
James A. Bell, Crandall C. Bowles, Stephen B. Burke, David M. Cote, James S. Crown, James Dimon, Timothy P. Flynn, Ellen V. Futter, Laban P. Jackson, Jr., Lee R. Raymond William C. Weldon,
Legal & General Group PLC (LGIMA) (Assets management: $598 Billion)
John Morrison Stewart, Nigel Wilson, Mark Zinkula, Mark Gregory, John Pollock, Henry Staunton, Mike Fairey, Rudy Markham, Stuart Popham, Nick Prettejohn, Julia S. Wilson, Lindsay Tomlinson
Vanguard Group Inc. (Assets management: $2.1 Trillion)
F. William McNabb III, Emerson U. Fullwood, Rajiv L. Gupta, Amy Gutmann, JoAnn Heffernan-Heisen, F. Joseph Loughrey, Mark Loughridge, Scott C. Malpass, André F. Perold, Alfred M. Rankin, Jr., Peter F. Volanakis,
UBS AG (Assets management: $2.3 Trillion)
Axel A. Weber, Michel Demaré, David Sidwell, Rainer-Marc Frey, Ann F. Godbehere, Axel P. Lehmann, Wolfgang Mayrhuber, Helmut, William G. Parrett, Isabelle Romy Beatrice Weder de Mauro, Joseph Yam Chi-kwong, Luzius Cameron, Sergio P. Ermotti,
Bank of America/Merrill Lynch (Assets management: $2.3 trillion)
Charles O. Holliday, Jr., Susan S. Bies, Frank P. Bramble, Sr, Arnold W. Donald, Charles K. Gifford, Monica C. Lozano, Thomas J. May, Brian T. Moynihan, Lionel L. Nowell, Sharon Allen, Jack Bovender, Linda Parker Hudson, David Yost,
Credit Suisse Group AG (Assets management: $1.8 Trillion)
Urs Rohner, Peter Brabeck-Letmathe, Jassim Bin Hamad, J.J. Al Thani, Iris Bohnet, Noreen Doyle, Jean-Daniel Gerber, Walter B. Kielholz, Andreas N. Koopmann, Jean Lanier,
Kai S. Nargolwala, Anton van Rossum, Richard E. Thornburgh, John Tiner,
Allianz SE (Owners of PIMCO) (Assets Management; $ 2.3 Trillion) and PIMCO-Pacific Investment Management Co. (Assets Management; $1.8 Trillion)
Michael Diekmann, Oliver Bäte, Manuel Bauer, Gary C. Bhojwani, Clement B. Booth, Dr. Helga Jung, Christof Mascher, Jay Ralph, Dieter Wemmer, Werner Zedelius, Maximilian Zimmerer
PETER PHILLIPS is professor of sociology at Sonoma State University and president of Media Freedom Foundation/Project Censored.
BRADY OSBORNE is a senior level research associate at Sonoma State University.
Sonoma State University’s KIMBERLY SOEIRO, KATELYN CLATTY, and GARRETT LYONS provided research assistance with this study. Portions of the literature review in this chapter were previously published in earlier Censored yearbooks.
Notes
1. See G. William Domhoff, Who Rules America?, 5th ed. (New York: McGraw Hill, 2006), and Peter Phillips, “A Relative Advantage: Sociology of the San Francisco Bohemian Club,” 1994, http://library.sonoma.edu/regional/faculty/phillips/bohemianindex.php.
2. Early studies by Charles Beard, published as An Economic Interpretation of the Constitution of the United States (1913), established that economic elites formulated the US Constitution to serve their own special interests. Henry Klein, in a 1921 book entitled Dynastic America and Those Who Own It, argued that wealth in America had power never before known in the world and was centered in the top 2 percent of the population, which owned some 60 percent of the country. In 1937, Ferdinand Lundberg published America’s Sixty Families, which documented intermarrying, self-perpetuating families, for whom wealth was the “indispensable handmaiden of government.” In 1945, C. Wright Mills determined that nine out of ten business elites from 1750 to 1879 came from well-to-do families (“American Business Elites,” Journal of Economic History, December 1945).
3. See Robert A. Brady, Business as a System of Power (New York: Columbia University Press, 1943); and Val Burris, “Elite Policy Planning Networks in the United States,” Research in Politics and Society, 4th ed. Gwen Moore and J. Allen Whitt (Greenwich, Connecticut: JAI Press, 1992), 111–134, http://pages.uoregon.edu/vburris/policy.pdf.
4. C. Wright Mills, The Power Elite (New York: Oxford University Press, 1956).
5. See Michael Soref, “Social Class and Division of Labor within the Corporate Elite,” Sociological Quarterly 17 (1976); and two works by Michael Useem: “The Social Organization of the American Business
Elite and Participation of Corporation Directors in the Governance of American Institutions,” American Sociological Review 44 (1979), and The Inner Circle (New York: Oxford University Press, 1984).
6. Thomas Koenig and Robert Gogel, “Interlocking Corporate Directorships as a Social Network,” American Journal of Economics and Sociology 40, no. 1 (1981); and Peter Phillips, “The 1934–35 Red Threat and the Passage of the National Labor Relations Act,” Critical Sociology 20, no. 2 (1994).
7. For a discussion of principals inside the HCPE who pursue US military domination of the world as their key agenda, see Peter Phillips, Bridget Thornton, and Celeste Vogler, “The Global Dominance Group: 9/11 Pre-Warnings & Election Irregularities in Context,” http://www.projectcensored.org/top-stories/articles/the-global-dominance-group.
8. Leslie Sklair, The Transnational Capitalist Class (Oxford, UK: Blackwell, 2001).
9. Leslie Sklair, “The Transnational Capitalist Class and the Discourse of Globalization,” Cambridge Review of International Affairs 14, no. 1, (2000), 67–85, http://www.lse.ac.uk/collections/globalDimensions/globalisation/theTransnationalCapitalistClassAndTheDiscourseOfGlobalization.