Saturday, February 6, 2010

Haitian Situation

(Above) A Haitian Flag with the Banker-esque Rich Uncle Pennybags.

With massive disaster in Haiti and banks flush with cash, the last few weeks should have been a golden opportunity for recipients of U.S. government bailouts to save face with the media.

Yet it seems that the press surrounding Haitian donations by banks is cynical at best. Few coverage outlets fail to mention investment banking bonus pools relative to Haitian donations. This mindset has also spawned questions as to the amount donated by the U.S. government to Haiti as a byproduct of bank bailouts.

One of the first people on the story, the The New York Times' Andrew Sorkin reported just the facts in the article, "
Wall Street Gives Millions to Haiti Relief Efforts" on Jan. 14, writing, "Banks including Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America have each pledged $1 million to various charities and humanitarian organizations."

His article continues in the same matter-of-fact style, touching on many topics that turn incendiary in later coverage.

"One of these banks, Citigroup, has suffered perhaps even more than others: its Haitian headquarters collapsed, and several of its employees have died," Sorkin writes, avoiding an accusatory tone.
"Citi is giving $2 million to relief efforts."

Weeks later, a Feb. 3 USA Today editorial article was the first to approach the topic of large banker bonuses in, "Should Conan, Goldman Sachs send megabucks to Haiti?" The editorial board struck the first tone against bank donation amounts, writing, "
People scoffed at the donation of $1 million by the firm, calculated to be 11 minutes of GS' 9 billion profits in 2009. Now, the National Council of Churches is whacking GS under the popular headline: GDP of Haiti: $8.5 billion. Goldman Sachs bonus pool: $20 billion."

Finally, coverage of the story turned outright accusatory as banks began reporting record earnings and large bonuses. Government officials were not immune from the finger pointing. This can be seen in a Feb. 9 Wall Street Manna blog post, "
Wall Street's Haiti scoreboard". The article's author, who chose to be anonymous, wrote, "Model and new mom, Gisele Bundchen, who received no money from the TARP, or help from the Government, gave $1.5 million. She gave more than either Goldman Sachs or JP Morgan, who collectively paid out $28 Billion in bonuses. Gisele made $35 million last year."

The author then continued to chastise government officials, writing, "Timothy Geithner donated zero...Ben Bernanke donated nothing also."

One interesting aspect of the coverage has been the charges against Citicorp. A major Haitian employer, it was the only banks with a location in Haiti. After losing its building and employees, Citicorp announced plans to rebuild. Rather than side with Citicorp for its loses and willingness to continue employing Haitians, mass media has pegged the bank as greedy for not donating more money because of its location. This seems counter-intuitive, yet negative spin seems to be the standard in financial institution coverage.

Also, note the coverage in terms of volume: Of the top ten banks, each of which received some form of bailout, two have managed to donate nothing. For disdained names like Bank of America and Goldman Sachs, donations seem to have been mandated by the media. HSBC and UBS, on the other hand, have flown far enough under the media's accusatory radar, as seen below.

Here is a look at bank donations, with
red indicating banks that have been publicly called upon for donations:

Data from The Wall Street Journal

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