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Wall Street Toes the Quota Line: Paine Webber Forces Successful Trader Edward Blum to Resign because he Opposed Racial Quotas! |
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(Feb. 27, 1999) - Edward Blum was a successful Paine Webber stockbroker for 16 years. In Blum's private life he was also co-chair of the Campaign for a Color-Blind America. But Paine Webber's profit motive took precedence over Blum's constitutional rights of free speech. Houston Mayor Bob Lanier pulled strings at Paine Webber: help Houston keep its racial quotas, or lose your bond underwriting business from us!
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Wall Street and Paine Webber
Anxious to Avoid Ire of Quota and Preference Supporters -- Employee Rights Be Damned!
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 Webber’s 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 city’s use of racial quotas and preferences. 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 Webber’s successful stockbroker, one Mr. Edward Blum, was heavily involved in supporting the campaign to end racial quotas in Houston. Lanier called Paine Webber’s chairman, Don Marron, to complain about Mr. Blum’s 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 Houston’s illegal racial set-asides and quotas because Blum’s employer, Paine Webber, was making money from other Houston city contracts. 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 underwriting business". 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 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
Chronicle at: Other companies who submitted to Lanier’s 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 Lanier’s 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 |
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