Want to Do Something About Climate Change? Follow the Money

Chase Bank, Wells Fargo, Citibank and Bank of America are the worst offenders.

WASHINGTON — If you asked us why a dozen people sat on the floor next to the A.T.M. in a Chase Bank branch on Friday, waiting for the police to arrest us for this small act of civil disobedience, we would come up with the same answer as the famous robber Willie Sutton: “Because that’s where the money is.”

We don’t want to empty the vaults. Instead, we want people to understand that the money inside the vaults of banks like Chase is driving the climate crisis. Cutting off that flow of cash may be the single quickest step we can take to rein in the fossil fuel industry and slow the rapid warming of the earth.

JPMorgan Chase isn’t the only offender, but it is among the worst. In the last three years, according to data compiled in a recently released “fossil fuel finance report card” by a group of environmental organizations, JPMorgan Chase lent over $195 billion to gas and oil companies.

For comparison,

  • Wells Fargo lent over $151 billion,
  • Citibank lent over $129 billion and
  • Bank of America lent over $106 billion.

Since the Paris climate accord, which 195 countries agreed to in 2015, JPMorgan Chase has been the world’s largest investor in fossil fuels by a 29 percent margin.

This investment sends a message that’s as clear as President Trump’s shameful decision to pull America out of that pact: Short-term profits are more important than the long-term health of the planet.

There are few financial institutions untouched by these climate change-causing investments. Amalgamated BankAspiration and Beneficial State Bank are notable exceptions. Local credit unions rarely have major investments in fossil fuels.

JPMorgan Chase, in contrast, has funded the very worst projects — projects that expand the reach of fossil fuel infrastructure and lock in our dependence on fossil fuels for decades to come.

In Minnesota, for example, the Line 3 pipeline replacement project, financed in part by JPMorgan Chase, adds 337 miles of crude-oil-carrying pipeline across Minnesota.

If approved this year, the pipeline will carry 760,000 barrels of crude oil every day from Canada to terminals on the edge of Lake Superior. This project reroutes and expands existing pipelines so that more crude oil can flow to refineries in Minnesota, Ohio, Illinois, Michigan and Ontario.

Tara Houska, a tribal attorney and member of the Couchiching First Nation Anishinaabe, has demonstrated the impacts on the ground. If built, the Line 3 replacement route will endanger the wild rice crops harvested for at least 500 years by the people native to the upper Midwest. Many Ojibwe nations in the region have opposed the project.

But it’s just as damaging if the oil doesn’t spill. Refined and burned as gasoline or jet fuel, it will spew carbon into the air, raising the temperature of the planet.

The victims of climate change are primarily people who have done little to cause the crisis. A World Health Organization senior scientist, Diarmid Campbell-Lendrum, said in December that climate change is emerging as “potentially the greatest risk to human health in the 21st century.” In the same month, Oxfam reported that cyclones, floods and fires are now displacing three times as many people as wars.

Not all the victims of climate change are humans. An estimated 800 million animals have been killed in the Australian blazes, which came after record heat and drought. Neither of us have met a long-nosed potoroo; the news that Australia’s bush fires have likely driven it and other species to extinction makes the world seem poorer.

There’s nothing abstract about climate change any more. Slowing the pace of climate change is humanity’s great task.

One center of power in our world is political — that’s why young people have been demonstrating outside of parliaments, writing a Green New Deal and registering new voters: in the United States, 2020 will be a fateful year for changing the politics of climate.

But even if the most environmental candidates win, it’s hard to imagine that they’ll be able to move our country at the pace science requires. The Intergovernmental Panel on Climate Change has said that if we want to limit global warming to 2.7 degrees Fahrenheit (1.5 degrees Celsius) above preindustrial temperatures, we will have to halve greenhouse gas emissions by 2030, cutting them to net zero by around 2050 — and Washington is only one capitol.

It makes sense to go after the other center of power, too: the vast financial empire centered in our country. Insurance companies like Liberty Mutual and asset managers like BlackRock have also, through their investments in fossil fuels, enabled climate chaos.

These titans may be too big to pressure. Yet if we could get just one offending bank to move toward divesting from fossil fuels, the ripple effects would be both swift and global.

Imagine an announcement from JPMorgan Chase that it was immediately ending funding for new fossil fuel projects. It would echo around the world in hours, and there would be nothing the Trumps or Putins or Bolsonaros of the world could do to stop it.

We sat in and were arrested at Chase Bank on Friday for nothing smaller than the future of our planet. If you care about the climate, it’s worth moving your accounts away from these offenders. Cut up your credit cards.

If you want to stop climate change, follow the money.

How U.S. Banks Took Over the World

A decade ago, they almost brought down the global financial system. Now they rule it.

When two of Europe’s corporate titans sat down to negotiate a merger this year, they called American banks.

Fiat Chrysler Automobiles hired Goldman Sachs Group Inc. as its lead adviser. France’s Renault SA hired a boutique bank stacked with Goldman alumni. In a deal that would reshape Europe’s auto industry, the continental banks that had sustained Fiat and Renault for more than a century were muscled aside by a pair of Wall Street deal makers.

A decade after fueling a crisis that nearly brought down the global financial system, America’s banks are ruling it. They earned 62% of global investment-banking fees last year, up from 53% in 2011, according to Coalition, an industry data provider. Last year, U.S. banks took home $7 of every $10 in merger fees, $6 of every $10 in stock commissions, and $6 of every $10 paid to hold and move corporate cash.

urope’s banks are smaller, less profitable and beating a hasty retreat from Wall Street.

From their central perch in London and with close ties to developing countries, Europe’s banks were primed to benefit as financial services went global. They charged onto Wall Street in the 1990s and pressed their advantage as U.S. banks limped out of the 2008 crisis.

Then, “they handed the whole system on a platter to the Americans,” said Colm Kelleher, the Irish-born former Morgan Stanley executive.

Coming out of the crisis, U.S. banks quickly raised capital and shed risk, unpleasant tasks that Europeans put off. American businesses recovered quickly, and its consumers are eager to borrow and spend. A tax cut in 2018 boosted profits. Interest rates have risen.

Meanwhile in Europe, regional economies are sputtering and borrowing has slowed.

Central bankers have cut interest rates below zero, which leaves banks struggling to eke out a profit on loans. Banking policy in Europe remains fractured, with national and continental regulators pursuing often conflicting agendas.

“It is not our remit to promote national, or even European, champions,” said Andrea Enria, the European Central Bank’s top banking regulator.

Twenty-five years ago, European banks charged into the U.S. They bought storied firms like Donaldson, Lufkin & Jenrette and Wasserstein Perella and dangled big paydays for rainmakers. When Deutsche Bank announced a $10 billion takeover of Bankers Trust in 1998, it promised at least $400 million in bonuses to retain top bankers.

The challenges of merging a conservative European commercial lender and a U.S. derivatives shop gave competitors pause. Goldman’s CEO, Hank Paulson, shared his doubts with a hotel ballroom of his bankers: Deutsche Bank “just signed up for 10 years of pain,” attendees remember him saying.

Henry Paulson is sworn in as Treasury secretary by Supreme Court Chief Justice John Roberts in 2006. Before he headed the Treasury, he ran Goldman Sachs. PHOTO: JIM YOUNG/REUTERS

But in an era of cheap debt and light regulation, the land grab seemed to pay off. Deutsche Bank had a $3 trillion balance sheet in 2007 and that year earned twice as much as Bank of America Corp. in securities-trading. Royal Bank of Scotland was briefly the largest bank in the world, wielding a balance sheet bigger than Britain’s entire economy.

Even the financial crisis looked at first like an opportunity. When Barclays PLC bought Lehman Brothers in a fire sale, it got 10,000 of the firm’s U.S. bankers and few of its bad debts. On Lehman’s Times Square trading floor, the loudspeakers played “God Save The Queen.” Deutsche Bank pounced on Wall Street’s clients.

The high-water mark was in 2011, when global investment-banking fees were roughly split between European and U.S. firms.

The good times didn’t last. A 2012 sovereign-debt crisis across the continent put new pressure on the region’s biggest banks. Economic growth slowed across the continent. Central bankers turned interest rates negative in 2014. German media calls them “Strafzinsen,” translating roughly to “penalty rates.”

UBS slashed 10,000 jobs and cut big parts of its trading operation. Royal Bank of Scotland fired thousands of investment bankers and sold its U.S. retail arm to focus on the U.K. Three-quarters of the Lehman bankers Barclays picked up in 2008 were gone within five years, according to Financial Industry Regulatory Authority records.

Meanwhile, U.S. banks were quietly encroaching on European rivals’ territory. In 2009, JPMorgan completed an acquisition of Cazenove, the U.K. investment bank. Every year since 2014, JPMorgan has generated more investment-banking revenue across Europe than anyone else, according to Dealogic. (The London-listed owner of Peppa Pig, a British cartoon character, hired JPMorgan Cazenove to advise on its sale in August to U.S. toy giant Hasbro Inc. )

As U.S. banks got stronger and their European rivals weakened, client loyalties began to change.

Today’s companies are increasingly global. They make more of their money in the U.S. and have swapped a shareholder register stacked with old-line European families and trusts for the likes of BlackRock Inc. and other U.S. investment giants, where Wall Street banks are better connected. The percentage of U.K. companies’ stock owned by foreigners rose from 16% in 1994 to 53% in 2016, according to government statistics.

Fiat, the Italian car maker that pursued a tie-up with France’s Renault this year, makes two-thirds of its money in the U.S.,  where it owns Chrysler. Its shots are called by John Elkann, the New York-born scion of the family that founded Fiat in 1899.

One of Mr. Elkann’s closest advisers is a Goldman Sachs banker who for the past 15 years has organized a yearly gathering of European billionaire business owners, according to people who have attended. They swap stories, share advice and, more often than not, hire Goldman for deals.

Globalization has cost the Europeans not just on headline-grabbing mergers, but in the everyday business of managing money for clients. Deliveroo, a food-delivery startup based in the U.K., sought to ramp up in Europe and the Middle East. Instead of hiring local banks in each market, it consolidated its money flows with Citigroup , which has local licenses in 98 countries and a global digital platform.

JPMorgan has made a big push to expand transaction banking for European clients. In 2010 it established a new unit of global bankers to pitch day-to-day transaction services to big companies, and later took over dozens of European transaction relationships from RBS.

UBS’s Stamford, Conn., trading floor in 2005. It was able to accommodate 1,400 traders and staff. PHOTO: RICK FRIEDMAN/CORBIS/GETTY IMAGES

Most recently JPMorgan said it is extending its commercial banking business globally, targeting hundreds of midsize businesses across Europe. It has sought to take on a more local flavoring, doing things like sponsoring math-and-science programs for students in France, Germany and Italy.

Last year, Citigroup and JPMorgan were two of the three biggest providers of day-to-day transaction banking globally, along with Britain’s HSBC Holdings PLC, according to Coalition. U.S. banks accounted for 57% of the global transaction-banking revenue pool among the biggest banks in that business, versus 22% for Europeans, Coalition said.

JPMorgan Chase Seeks to Prohibit Card Customers From Suing

The change, which affects about 47 million accounts, including those for Chase’s popular Sapphire cards, reflects a broader effort by Wall Street firms to prevent customers and employees from engaging in class-action lawsuits that can result in large settlements and bad publicity. Unlike court cases, arbitration cases do not leave a trail of public documents and they cannot be brought by groups of aggrieved customers.

JPMorgan — the country’s largest bank — is far from alone in increasing the use of arbitration clauses. Seventy-two percent of banks used such clauses in 2016, up from 59 percent in 2013according to a report from the Pew Charitable Trusts.

The notifications said the arbitration agreement would apply not just to the customers’ current accounts but “all claims or disputes between you and us,” including “any prior account.”

The policy change turns back the clock in another way by bringing back the kind of arbitration clauses the bank and others agreed to temporarily drop in 2009 as part of a class-action lawsuit. The bank agreed to remove such provisions for three and a half years, starting in 2010, to settle a lawsuit that alleged large banks were working together to push customers into arbitration.

New York Life Insurance Sold Slave Insurance

Banks like JP Morgan Chase and Wells Fargo accepted Slaves as Collateral

Rachel Swarns of the New York Times joins us to discuss what she discovered when she followed the money trail of one of the nation’s top financial institutions all the back to the 19th century.
.. RACHEL: In 1847, Godfrey died in the Midlothian Coal Mines. We still don’t know exactly how he died, but in New York Life’s accounting of the deaths that happened, they simply described, “burned to death.


New York Life was good for its policy. And Nicholas Mills put in a claim and within months of Nicholas Mills’ claims— three months, actually— they paid up: $337. The folks at New York Life collected a lot of information, but not information that his family, today, might wanna know, or people looking at the institution of slavery might wanna know. They did not record his last name. They did not record where he was, or if he was, buried. Simply “burned to death” and “$337 payment.”

CHENJERAI: This payment to a Southern slave owner wasn’t coming from Charleston, or Richmond, it was coming from New York.
.. And slaves were often used by people who went to a bank, wanted to get a loan, and had to, as we often do today, show some property for collateral, and would say, “okay, I got these 20 guys here. This is my collateral.”

That was a very pernicious system because, if you think it through, what happens when that guy defaults? Well, we know what happens if you default on your car loan today. The bank will come take it. The same thing happened back then.

JACK: Wait a minute. There were slave repo men?

RACHEL: There were slave repo men.

It’s very simple. You default on your loan, you have given up some collateral, the banks then become the owners of that property. And so the banks became owners of human beings, of these enslaved people. They took them, repossessed them, and tried to sell them, because it’s just like in foreclosures, you know, they don’t wanna hold on to these distressed properties. You know, they’re not in the real estate business. Banks are not really in the slave owning business.

RACHEL: We are talking about, you know, there, there are contemporary banks that have this history, you know.

CHENJERAI: Could you, could you name them?

RACHEL: So some of the banks that were involved in this business, banks who accepted slaves as collateral were J.P. Morgan Chase and Wells Fargo.
.. CHENJERAI: So this how the descendants are responding? How are the insurance companies responding to this?

RACHEL: You know, no one really wants a call from a reporter saying, talking about…. their ties to slavery. It’s, it’s just not … A lot of people are looking-

JACK: Mm.

RACHEL: … for coverage from the New York Times. This is not an issue where anyone is happy about a connection.

This information about slave insurance and these records came out in the 2000s, when states and municipalities required companies to disclose their ties to this period of time. So, you know, there was some trying to say, “well this is old news, there’s no reason to delve into this.” In some ways, it’s no surprise that-
.. There was a lawsuit that was filed particularly against New York Life and other companies that was dismissed in 2004, after a judge ruled that the black plaintiffs had been unable to establish a direct link to the companies that they had sued, and that the statute of limitations had run out.

With the advance of genealogy and the digitization of records, it’s now possible, difficult, but possible, to trace these people, and their descendants to the present day.
.. JACK: And in terms of just Americans coming to grips with this history, how should we- how do we tell that story?


RACHEL: You know, I think, with a lot of these issues, you know, there is the moral question, right? And what do we do with that, as, as Americans? It is simply true that African Americans were not paid for labor, right? For a long time. (laughing).
.. Ta-Nehisi Coates obviously did that really provocative piece about reparations and arguing for reparations. And he actually was at a conference and he was talking about that debate in American society and saying… You know people were saying, “Well, what would it look like?” and he said, “You know, we can’t really talk about what reparations looks like if there is no consensus that there was a debt.”

And I think that’s where America is right now is trying to figure out is there a debt? And part of the work that I do, and the work that a lot of people are doing in this area and looking at these kinds of connections between slavery and today, is just illuminating those kinds of connections.