In the wake of the Silicon Valley Bank collapse, a closer look at the bank’s dealings and its ties to the political left are becoming evident, and the question of bailouts for companies at the expense of taxpayers comes into play.
Long before its epic collapse, Silicon Valley Bank (SVB) was a darling of the left. It allied in cash and manpower with a liberal nonprofit run by California Gov. Gavin Newsom’s wife and fully embraced the environmental, social, and governance (ESG) platform now being banned in some red states while celebrating its executives’ involvement in the LGBTQ+ movement.
Just the News discovered a connection between the “California Partners Project” (CPP) — which California Democratic Gov. Gavin Newsom’s wife Jennifer helped launch — and SVB. Documents from the Fair Political Practices Commission show four donations totaling $100,000 made by the group to the SVB in 2021 and also reveal that a CPP board of directors member, John China, serves as the president of SVB Capital.
Just The News reported:
As SVB’s investment failures mounted, the bank doubled down on its ideological commitments by pledging $5 billion in new green tech outlays, despite signs of rising interest rates negatively impacting that sector. Some institutional investors also began to raise concerns about the overall balance sheet.
The stark contrast between the liberal investment icon and what was in reality an underperforming bank, was on full display last July. SVB was boasting about its diversity, equity and inclusion (DEI) progress and a Pride Month forum, as J.P. Morgan official Steve Alexopoulos pressed for answers on an investor call about why its investments had lost 8% of value in a single quarter, according to the transcript of the meeting.
“So if we look at the $137 million of investment losses, which are detailed on Page 7, that declines a bit more than we’ve seen in other periods, right, is over 8%, typically you’re like 2% to 3%,” Alexopolous said. “Can you walk us through the three buckets, so we can understand that a bit better.”
Greg Becker, the bank’s president and chief executive officer, attempted to contain the concern by explaining what the bank was doing to offset potential panic. “I believe and I certainly hope we’ve kind of gotten down to the floor,” he said. “No guarantees, but this is just a flavor for how we’ve approached the securities portfolio.”
Despite these assurances, however, Becker has been sued and his institution placed under FDIC control in the largest bank failure since the 2008 Great Recession. Experts say the collapse is a warning sign to weed out woke investments.
“We knew it was financially mismanaged, but oh my gosh, this is probably the most woke bank in existence of mankind — or it was the most woke bank,” said Joel Griffith, a financial fellow at the Heritage Foundation. “We should recognize the primary cause of this bank going belly up was just gross financial mismanagement. They took depositors’ money, and they put this in long term debt investments at record low interest rates, and as any financial risk manager knows, if you have interest rates that increase, the value of those debt assets are actually going to decline.”
Monday on the John Solomon Reports podcast, former Treasury Department official Monica Crowley spoke about the recent string of bank collapses during an interview saying government “fail safes” haven’t worked and that the dedication to social justice policies helped drive them into the ground. “Within a couple of days, we have seen three major … banks fail,” she said. “So the lightning speed of this thing and how fast the financial sector can go into crisis — and then how fast that can then spill over into the broader economy — that lesson should be lost on no one.”
“It is 100% true that we are seeing industries, companies across the board, that changed their focus to a social justice platform more than their actual core business,” she said. “And there are deleterious effects on that core business. They are trying to cover their tracks for their own wrongdoing, their own unethical behavior. And it’s veering off into DEI and ESG that has crippled their ability to actually serve their customers and protect their core mission.”
The also failing Signature Bank SBNY’s “Social Impact Report” for 2020 discussed the organization’s negative environmental impacts, along with a sophisticated social credit score scheme, Just the News reports.
Signature would create a “bankwide credit policy that details the types of credit deemed to have substantial negative influence on society,” the report pledged, “and the Bank seeks to avoid granting any loans that could potentially have harmful effects,” thus politicizing their business.
SBNY would not lend to companies “related to the production of fossil fuels” and “to the firearms, armaments and military products industries,” it vowed. Instead, the failed bank extended over $168 million in loans to renewable energy and solar initiatives, along with recycling-related projects