General Electric is Jesse Jackson's Latest 'Shakedown,' Critic Charges
July 7, 2008 - 7:20 PM
(CNSNews.com) - Following intense lobbying and an angry letter from Jesse Jackson, corporate giant General Electric Co. chose three investment firms with close ties to Jackson to co-manage its recent $6 billion bond offering, according to interviews with GE and documents obtained by CNSNews.com.
The May 31 bond offering was announced by GE Capital, the financing arm of GE, approximately two months after Jackson used a letter to chastise the company for excluding minority owned firms in a March bond deal. In that letter, Jackson urged GE to use "members" of his Wall Street Project in its future financial transactions.
The author of a book critical of Jackson said GE's bond offering is evidence of Jackson's latest "shakedown."
GE Capital selected the minority investment firms of Utendahl Capital Partners, L.P., Loop Capital Markets, and Williams Capital Group, L.P., all affiliates of Jackson's Wall Street Project, to co-manage the $6 billion bond offering.
GE spokeswoman Marissa Moretti told CNSNews.com that the three minority firms were "great firms for us to work with on that offering." Moretti would not provide any update on the series of meetings that Jackson and GE conducted. "There's no updates that we really have to provide on that," she said.
When asked if Jackson's letter or his meetings with GE had any impact on the company's decision to use three of Jackson's affiliates, Moretti replied, "I don't know the answer to that. Let me get back to you."
There was no reply from GE Capital as of press time.
Access Spells Success
Author Ken Timmerman said GE's selection of the Jackson-affiliated firms is the latest example of a Jackson "shakedown" because "these companies represent Jesse's inner circle."
Timmerman's book, "Shakedown: Exposing the Real Jesse Jackson," quotes Jim Reynolds, the head of Loop Capital, as crediting Jackson for the success of his investment bank.
"A significant part of the access that we've enjoyed ... has only been made possible through the tireless efforts of Reverend Jackson," Reynolds said in April 2001.
The financial survival of Utendahl Capital Partners has also been linked to Jackson's lobbying efforts.
Last year, Utendahl was relieved of nearly $20 million it owed to Merrill Lynch & Co and financial analysts pointed to Jackson's involvement as the key reason the struggling company managed to stay in business. According to Utendahl's 2001 financial report, the firm had a net capital of less than $700,000, prompting one analyst to say, "they should have died a long time ago as a company." See Earlier Story
"These guys wouldn't really exist without Jackson's intervention and shakedowns. It would be refreshing to see them get business on their own, bidding against other investment banks," Timmerman stated. "These guys obviously need help [from Jackson.]
In the March letter to GE Chairman and CEO Jeffrey R. Immelt, Jackson wrote that his Wall Street Project had "established relationships with several minority owned investment banks" with "qualifications and expertise to deliver excellent results and value-added products."
"These firms are members of our Wall Street Project Trade Bureau," Jackson added. "I have enclosed for your review, a list of these firms." The Wall Street Project's aim is to promote minority participation in corporate America.
After receiving Jackson's letter, GE called the complaints "legitimate," prompting an April 2 meeting with GE Capital Services Chairman Dennis Dammerman and Jackson. Other meetings followed.
John Oliver, A GE spokesman, told CNSNews.com in April that the Jackson meetings came about because "some minority bankers felt that they weren't able to participate in the [March] debt offering to the degree they wanted, and that is legitimate."
"The meetings have been pretty upbeat with people saying, 'How about this? Well, how about that.' I think they are going through some good ideas," Oliver added.
Repeated calls to Jackson's office were not returned.
Timmerman summed up GE's move.
"It is very unfortunate when a major corporation gives in to the outrageous demands of a race hustler like Jesse Jackson," Timmerman said.
"This sends a message to GE shareholders that the management of the company does not have their best interest at heart," he added.
See Earlier Stories:
Jesse Jackson's 'Racial Nepotism' Helps Debt-Mired Business, Critic Charges
GE Enters Negotiations With Jesse Jackson, Sets Meeting
Letter Reveals Jesse Jackson's 'Shakedown' Bid of GE, Critic Says