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William Black

William K. Black was a federal regulator during the Savings and Loan crisis and appears in Michael Moore's 'Capitalism: A Love Story'

February 7th, 2010 5:04 PM

An Open Letter to Dr. Walter E. Massey, Chairman, Bank of America, President, emeritus, Morehouse College

An Open Letter to Dr. Walter E. Massey
Chairman, Bank of America
President, emeritus, Morehouse College


William K. Black
Associate Professor of Economics and Law
University of Missouri – Kansas City

February 6, 2010

Re: Hans-Olaf Henkel, Bank of America’s Senior Advisor in Germany

Dear Dr. Massey,

I am writing in my individual capacity. It came to my attention yesterday that Bank of America’s “senior advisor” in Germany is Hans-Olaf Henkel. I believe that Bank of America should consider the context in which I became aware of this fact very disturbing. Mr. Henkel has just written the following:

Mr. Galbraith should familiarize himself Jimmy Carter's "Housing and Community Development Act" where in Section VIII Banks were prohibited the practice of "red lining" which until then enabled them to distinguish "better living quarters" and "slums."

The full context of Dr. Galbraith’s interview, and Mr. Henkel’s written reply to Dr. Galbraith can be found at the following links to my response to Mr. Henkel:

Bank of America’s “senior advisor” in Germany – the leader of a team of advisors that help set the bank’s policies – is bemoaning the end of redlining and claiming that American bank loans to black “slums” caused the global financial crisis. I know that you understand exactly what redlining means – the deliberate exclusion of minority borrowers from credit on the basis of ethnicity. I also know that you understand that Mr. Henkel’s effort to blame the global crisis on black Americans has no basis in fact and is the product of the vilest bigotry.

Americans, of course, are not unique in being susceptible to the bigotry. Consider the policy advice that Mr. Henkel gives in the German context.

Dr Thilo Sarrazin, a member of the executive board and head of the bank's risk control operations, told Europe's culture magazine Lettre International that Turks with low IQs and poor child-rearing practices were "conquering Germany" by breeding two or three times as fast.

"A large number of Arabs and Turks in this city, whose number has grown through bad policies, have no productive function other than as fruit and vegetable vendors," he said.

"Forty per cent of all births occur in the underclasses. Our educated population is becoming stupider from generation to generation. What's more, they cultivate an aggressive and atavistic mentality. It's a scandal that Turkish boys won't listen to female teachers because that is what their culture tells them", he said.

"I'd rather have East European Jews with an IQ that is 15pc higher than the German population," he said


Yes, he actually said that things had gotten so bad that he’d prefer to have Jews, ratger than Arabs and Turks, move to Germany. (Because, as we all know, Jews are 15 percent smarter.) How did Bank of America’s senior adviser respond to this delusional hate speech (made public in early October 2009)? He began an immediate media crusade in support of Mr. Sarrazin’s bigotry. He gave video interviews and sent (and published widely on the web) an open letter to “Lieber Herr Sarrazin” to express his unqualified support for Mr. Sarrazin’s statements (without any “if” or “but” as he put it).

Bank of America chose Mr. Henkel as its senior advisor in 2006. He has been assembling the bank’s team of policy advisors since that date. Given the fact-free, virulent bigotry that lies at the core of Mr. Henkel’s view of minorities it is certain that his bigotry determines his policy recommendations. Moreover, the individuals he has recruited to serve as the bank’s policy advisors under his overall direction, at a minimum, are willing to stomach his bigotry without protest.

Bank of America is enormous. You may have never heard of Mr. Henkel. That is not true of your senior officers in Germany. There, he is famous. Every one of the bank’s senior officials in Germany (and probably throughout Europe) knows his reputation. Both the Sarrazin screed and Henkel’s embrace of that bigotry were major news events in Germany. If the bank’s senior German and European officials have not brought this disgrace to the attention of the bank’s board of directors, then the rot extends to the pinncacle of the bank’s European operations. If they have brought Mr. Henkel’s hate speech to your board’s attention, why was he not immediately discharged for cause?

Our family, my spouse is June Carbone, lived in Northern California for 20 years before moving to Kansas City. Like you, we are steeped in the proud history of the origins of the Bank of America. Mr. Giannini’s Bank of Italy was proud to lend to “fruit and vegetable owners.” Many of these small entrepreneurs were recent immigrants from Italy. Like the “fruit and vegetable” entrepreneurs that Mr. Sarrazin and Mr. Henkel despise, they often faced deep suspicion because of their accents, their national origins, and their religion (Catholicism). This was the era of “scientific racism” and educated people “knew” that immigrants from Southern Europe were inferior. As you know well, the resurgance of the Klan during Mr. Giannini’s era was largely anti-immigrant and anti-Catholic.

Mr. Henkel is not simply a bigot. His substantive policy advice – deregulation and far higher executive compensation – makes him one of the principal German architects of the crisis. He gave Bank of America awful advice.

But Mr. Henkel’s saddest trait is hypocrisy. He is a serial hypocrite because his bigotry trumps the things he purports to stand for. His speaker bureau bio (self) describes him as “courageous.” (He applauds Mr. Sarrazin’s screed as exemplifying courage.) In the policy context, courage is speaking truth to power when power does not want to hear those truths. Mr. Henkel flatters power through the gospel of Social Darwinism. Mr. Henkel claims to be the champion of the “entrepreneur” – but treats “fruit and vegetable” entrepreneurs with contempt. Mr. Henkel denounces “smears” against the “market system” but launches, and cheers, the vilest smears that have produced the most monstrous crimes against humanity in world history.

Bank of America must not simply announce some face saving retirement (particularly one thanking him for his service and paying him severance). Bank of America needs to make a clear statement about what it stands for. Does Mr. Giannini or Mr. Henkel represent Bank of America?

I offer the following recommendations for your board’s consideration. Mr. Henkel should be terminated for cause. Immediately. Bank of America should review all policy advice it has received from him and his team and seek outside guidance from experts that (1) foresaw the crisis, and (2) are not bigots. Bank of America should review why its senior managers in Europe and the United States took no action while its “senior advisor” spread his hate for months. Bank of America should announce a new $10 million scholarship program for college and graduate students of limited financial means. I suggest naming the program the Giannini awards.

Very truly yours,

William K. Black

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