|Wall Street and Paine Webber
Anxious to Avoid Ire of Quota and Preference Supporters -- Employee Rights Be Damned!
Edward Blum was one of Paine Webbers most successful stockbrokers. But,
unfortunately for his career, in his private life he was also the co-chairman of the
Campaign for a Color-Blind America Legal Defense and Educational Foundation.
foundation opposes racial preferences and quotas and has successfully fought against
racially-gerrymandered voting districts.
Blum enjoyed a lucrative career as a successful stockbroker for Paine Webber, in a Houston
high rise office tower with a stunning view of the city. He had worked for Paine Webber
for 16 years.
One of Paine Webbers most lucrative accounts was with the City of Houston,
underwriting bonds for the city.
In the fall of 1997 the Houston city government, including Mayor Bob Lanier, were busily
opposing a voter referendum which sought to end that citys use of racial quotas and
Mayor Lanier, a democrat, delivered not-so-veiled threats to companies doing business with
Houston (such as Texaco and Paine Webber): Help Mayor Lanier oppose Proposition A,
or you just might find that your business with Houston dries up.
Of course, Mayor Lanier could not help but notice that Paine Webbers successful
stockbroker, one Mr. Edward Blum, was heavily involved in supporting the campaign to end
racial quotas in Houston. Lanier called Paine Webbers chairman, Don Marron, to
complain about Mr. Blums involvement in the anti-quota initiative.
Prior to contacting Paine Webber, Houston Mayor Bob Lanier had held a press conference in
which he pointed out that Paine Webber "had made a lot of money from municipal bond
underwriting fees from Houston". Lanier went on to publicly state that Mr.
Edward Blum should not criticize Houstons illegal racial set-asides and quotas
because Blums employer, Paine Webber, was making money from other Houston city
Following Mayor Lanier's complaint to Paine chairman Don Marron, the president of Paine
Webber's private client division (Mr. Mark Sutton) called to warn Mr. Blum that Blum's
activities had placed Paine Webber in a "lose-lose" situation. Mr. Sutton
pointedly informed Mr. Blum that his private, constitutionally-protected political
activities were jeopardizing Paine Webber's efforts to improve its bond-underwriting
business with the City of Houston.
In March 1997 Edward Blum published an article critical of racial quotas in government
highway contracts. He did not mention Paine Webber in the article, nor did he identify
himself as being affiliated with that company. Nonetheless, Blum was again reprimanded by
the company, which advised Blum that Paine would not clear or approve any articles in
which Blum was critical of racial quotas.
Even though Mr. Blum's private opposition to racial quotas and set-asides by the U.S. DOT
did not constitute "investment-related" statements (which, according to his
employment agreement with Paine Webber, would require prior approval), he was nonetheless
told in no uncertain terms that the firm's name had been adversely linked to Blum's
efforts to end illegal quotas and preferences. This "adverse link to Paine
Webber", they said, "had resulted in Paine Webber losing certain municipal
Management's memo to Mr. Blum further stated that his private opinions "could
seriously undermine the public perception of Paine Webber's publicly-announced program on
diversity hiring and (minority) marketing initiatives". Paine Webber was
terrified of angering Jesse Jackson's "Wall Street Project", and they definitely
did not want to appear on the radar screens of the EEOC and especially did not want to be
noticed by Bill Lann Lee's Office of Civil Rights at the U.S. Dept. of Justice.
Finally, being a conscience-free, bottom-line oriented enterprise, Paine Webber also did
not want to alienate any potential quota-supporting institutional investors, including the
City of Houston.
Edward Blum stubbornly declined to comply with these misplaced and constitutionally
questionable company warnings.
Paine Webber made Mr. Blum's choices painfully clear: In effect, Paine Webber
ordered Mr. Blum to stop practicing his right to free speech, and definitely to stop
publishing articles which endorsed race-blind government policies.
In the face of increasing pressure from Paine Webber, Mr. Blum resigned from the firm on
July 4, 1998.
Edward Blum continues to serve as co-chair of the Campaign for a Color-Blind
America. Visit the Campaign's Web site at: http://www.equalrights.com/
Houston Mayor Lanier and his city council 'defeated' the 1997 initiative, known as
Proposition A, by illegally rewording the ballot language. One judge has already ordered
the city to conduct a new ballot; more legal proceedings on the issue are pending.
[See Houston Lied, this site. ]
Edward Blum led the effort to collect more than 20,000 signatures to get Proposition A on
the ballot and he sued when the language was altered. Blum said he is encouraged by the
court's willingness to hear the issues. "The law now is simply unfair for individuals
who have had their petition language changed and could find themselves in a never-ending
cycle of challenging election results after the fact," Blum said. [See Houston
Other companies who submitted to Laniers threats of losing Houston city business
include Texaco, Inc. who, mere months earlier, had been stung by a questionable racial
bias suit. Not surprisingly, Texaco came out strongly against Proposition A, and
fully supported Laniers illegal re-wording of the ballot initiative. [See Texaco's Nightmare ]
Ballot language flap on affirmative action
unresolved by council (by Julie Mason, Houston Chronicle)
Color-Blind...Or Just Blind? (by Michael King,
Texas Observer; July 12, 1996)
End Case 15: Paine Webber v. Edward Blum