Section B, Attachment 3: The investment sector of the Crown The investment sector of the Crown carries companies whose primary activity is the amassing and reinvesting of capital. This sector includes global central banks, major investment money management firms, and other companies whose primary efforts are the concentration and expansion of money, such as insurance companies. The Case of BlackRock, Inc. Internationally, many firms operate primarily as investment organizations, managing capital and investing in other companies. Often these firms do not actually make anything except money, and are keen to prevent interference with return on capital by taxation, regulations, and governmental interventions anywhere in the world. BlackRock, based in Manhattan, is the largest assets management firm in the world, with over 10,000 employees and investment teams in twenty-seven countries. Their client base includes corporate, public, union, and industry pension plans; charities; governments; insurance companies; third-party mutual funds; endowments; banks; foundations; corporations; official institutions; sovereign wealth funds; financial professionals; and individuals worldwide. a) BlackRock Assets BlackRock acquired Barclay Global Investors in December of 2009. As of March 2012, BlackRock manages assets worth $3.68 trillion in equity, fixed income, cash management, alternative investment, real estate, and advisory strategies. 27 (i) BlackRock holdings In addition to Freeport-McMoRan, BlackRock has major holdings in: • Chevron (49 million shares, 2.5 percent), •Goldman Sachs Group (13 million shares, 2.7 percent), • Exxon Mobil (121 million shares, 2.5 percent), • Bank of America (251 million shares, 2.4 percent), • Monsanto Company (12 million shares, 2.4 percent), • Microsoft Corp. (185 million shares, 2.2 percent), and many more. 28 (ii) BlackRock investments BlackRock manages investments of both public and private funds, including: • California Public Employee’s Retirement System, • California State Teacher’s Retirement System, •Freddie Mac, • Boy Scouts of America, • Boeing, Sears, • Verizon, • Raytheon, • PG&E, • NY City Retirement Systems, • LA County Employees Retirement Association, • GE, • Cisco, and numerous others. b) BlackRock stockholder agreements BlackRock has stockholder agreements with Merrill Lynch & Co., Inc., a wholly owned subsidiary of Bank of America Corporation; and Barclays Bank PLC and its subsidiaries. c) BlackRock board of directors Two to four members of the board are from BlackRock management; one director is designated by Merrill Lynch; two directors, each in a different class, are designated by PNC Bank; two directors, each in a different class, are designated by Barclays; and the remaining directors are independent. According to BlackRock’s April 2011 annual report to stockholders, the board of directors consists of eighteen members. The board is classified into three equal groups—Class I, Class II, and Class III —with terms of office of the members of one class expiring each year in rotation. Members of one class are generally elected at each annual meeting and serve for full three-year terms, or until successors are elected and qualified. Each class consists of approximately one-third of the total number of directors constituting the entire board of directors. Class I Directors (terms expire in 2012): • William S. Demchak - Corporate affiliations: senior vice chairman of PNC (assets: $271 billion); • J. P. Morgan Chase & Co. (2011 assets: $2.2 trillion). • Kenneth B. Dunn, PhD - Corporate and institutional affiliations: professor of financial economics at the David A. Tepper School of Business at Carnegie Mellon University; former managing director of Morgan Stanley Investment (assets: $807 billion). • Laurence D. Fink - Corporate and institutional affiliations: chairman/CEO of BlackRock; trustee of New York University; trustee of Boys Club of NY. • Robert S. Kapito - Corporate and institutional affiliations: president of BlackRock; trustee of Wharton School University of Pennsylvania. • Thomas H. O’Brien - Corporate affiliations: former CEO of PNC; Verizon Communications, Inc. (2011 revenue: $ 110 billion). • Ivan G. Seidenberg - Corporate and policy affiliations: board chairman of Verizon Communications; former CEO of Bell Atlantic; Honeywell International Inc. (2010 revenue: $33.3 billion); Pfizer Inc. (2011 revenue: $64 billion); chairman of the Business Roundtable; National Security Telecommunications Advisory Committee; President’s Council of the New York Academy of Sciences. 29 Class II Directors (terms expire in 2013) : • Abdlatif Yousef Al-Hamad - Corporate and institutional affiliations: board chairman of Arab Fund for Economic and Social Development (assets: $2.7 trillion); former Minister of Finance and Minister of Planning of Kuwait, Kuwait Investment Authority. Multilateral Development Banks, International Advisory Boards of Morgan Stanley, Marsh & McLennan Companies, Inc., American International Group, Inc. and the National Bank of Kuwait. • Mathis Cabiallavetta - Corporate affiliations: Swiss Reinsurance Company (2010 revenue: $28 billion); CEO of Marsh & McLennan Companies Inc. (2011 revenue: $11.5 billion); Union Bank of Switzerland-UBS A.G. (2012 assets: $620 billion); Philip Morris International Inc. (2010 revenue: $27 billion). •Dennis D. Dammerman - Corporate affiliations: General Electric Company (2012 revenue: $147 billion); Capmark Financial Group Inc. (formally GMAC); American International Group (AIG) (2010 revenue: $77 billion); Genworth Financial (2010 assets: $100 billion); Swiss Reinsurance Company (2012 assets: $620 billion); Discover Financial Services (2011 revenue: $3.4 billion). • Robert E. Diamond Jr. - Corporate and policy affiliations: CEO of Barclays (2011 revenue: $32 billion); International Advisory Board of the British-American Business Council. • David H. Komansky - Corporate affiliations: CEO of Merrill Lynch (division of Bank of America 2009) (2011 assets management: $2.3 trillion); Burt’s Bees, Inc. (owned by Clorox); WPP Group plc (2011 revenue: $15 billion). •James E. Rohr - Corporate affiliations: CEO of PNC (2011 revenue: $14 billion). • James Grosfeld - Corporate affiliations: CEO of Pulte Homes, Inc. (2010 revenue: $4.5 billion); Lexington Realty Trust (2011 assets: $1.2 billion). • Sir Deryck Maughan - Corporate and policy affiliations: Kohlberg Kravis Roberts (2011 assets: $8.6 billion); former CEO of Salomon Brothers from 1992 to 1997 a Chairman of the US- Japan Business Council; GlaxoSmithKline plc (2011 revenue: $41 billion); Thomson Reuters Corporation (2011 revenue: $13.8 billion). • Thomas K. Montag - Corporate affiliations: president of Global Banking & Markets for Bank of America (2011 revenue: $94 billion); Merrill Lynch (division of Bank of America, 2009; 2011 assets management: $2.3 trillion); Goldman Sachs (2011 revenue: $28.8 billion). Class III Directors (terms expire in 2014): • Murry S. Gerber - Corporate affiliations: executive chairman of EQT (2010 revenue: $1.3 billion); Halliburton Company. • Linda Gosden Robinson - Corporate affiliations: former CEO of Robinson Lerer & Montgomery; Young & Rubicam Inc.; WPP Group plc. (2011 revenue: $15 billion); Revlon, Inc. (2011 revenue: $1.3 billion). • John S. Varley - Corporate affiliations: CEO of Barclays (2011 revenue: $32 billion); AstraZeneca PLC (2011 revenue: $33.5 billion). d) BlackRock power networks BlackRock is one of the most concentrated power networks among the global 1 percent. The eighteen members of the board of directors are connected to a significant part of the world’s core financial assets. Their decisions can change empires, destroy currencies, and impoverish millions. Some of the top financial giants of the capitalist world are connected by interlocking boards of directors at BlackRock, including: • Bank of America, • Merrill Lynch, • Goldman Sachs, • PNC Bank, • Barclays, • Swiss Reinsurance Company, • American International Group (AIG), • UBS A.G., • Arab Fund for Economic and Social Development, • J. P. Morgan Chase & Co., and • Morgan Stanley. Section C: Globalization Globalization is the consolidation of all the countries, their economies and security structures, into one formation. The ideal of creating a One World Order has been put into action by the British Crown, to establish a New World Order in which they rule the globe in its entirety. (i) The agenda of today’s global superclass Sociologists William Robinson and Jerry Harris accurately predicted the agenda of today’s global superclass in 2000, which includes the following: • The continued consolidation of capital around the world without interference from governments or egalitarian social movements.30 • The further pauperization of the poorest half of the world’s population, and an unrelenting downward spiral of wages for everyone in the second tier, and even some within the first tier. 31 • A world facing economic crisis, where the neoliberal solution is to spend less on human needs and more on security.32 • A world of financial institutions which run amok, where the answer to bankruptcy is to print more money through quantitative easing with trillions of new inflation-producing dollars. • A world of permanent war, whereby spending for destruction requires even more spending to rebuild, a cycle that profits the transnational corporations (TCC) and its global networks of economic power. •A world of drone killings, extra- judicial assassinations, as well as death and destruction at home and abroad. (ii) Leading personnel dominate structures of certain countries Foremost among the early works on the idea of an interconnected 1 percent within global capitalism was Leslie Sklair’s 2001 book ‘The Transnational Capitalist Class’.[ii] Sklair believed that globalization was moving transnational corporations (TNC) into broader international roles, whereby corporations’ states of origin became less important than international agreements developed through the World Trade Organization and other international institutions. Emerging from these multinational corporations was a transnational capitalist class, whose loyalties and interests, while still rooted in their corporations, was increasingly international in scope. He explained that the transnational capitalist class can be analytically divided into four main fractions, as follows: (i) owners and controllers of TNCs and their local affiliates; (ii) globalizing bureaucrats and politicians; (iii) globalizing professionals; (iv) consumerist elites (merchants and media). The transnational corporate class and each of its fractions are not always entirely united on every issue. Nevertheless, together, leading personnel in these groups constitute a global power elite, dominant class or inner circle in the sense that these terms have been used to characterize the dominant class structures of specific countries.33 (iii) A small group of companies control the global economy In 2011, a University of Zurich study at the Swiss Federal Institute, Stefania Vitali, James B. Glattfelder and Stefano Battiston completed the research for the reports on global economy. The study reports that a small group of companies - mainly banks - wields huge power over the global economy. 34 Using data from Orbis 2007, a database listing thirty-seven million companies and investors, the Swiss researchers applied mathematical models - usually used to model natural systems - to the world economy. The study is the first to look at all 43,060 transnational corporations and the web of ownership between them. The research created a “map” of 1,318 companies at the heart of the global economy. The study found that 147 companies formed a “super entity” within this map, controlling some 40 percent of its wealth. The top twenty-five of the 147 super-connected companies includes: 1. Barclays PLC* 2. Capital Group Companies Inc. 3. FMR Corporation 4. AXA 5. State Street Corporation 6. J. P. Morgan Chase & Co.* 7. Legal & General Group PLC 8. Vanguard Group Inc. 9. UBS AG 10. Merrill Lynch & Co. Inc.* 11. Wellington Management Co. LLP 12. Deutsche Bank AG 13. Franklin Resources Inc. 14. Credit Suisse Group* 15. Walton Enterprises LLC 16. Bank of New York Mellon Corp 17. Natixis 18. Goldman Sachs Group Inc.* 19. T Rowe Price Group Inc. 20. Legg Mason Inc. 21. Morgan Stanley* 22. Mitsubishi UFJ Financial Group Inc. 23. Northern Trust Corporation 24. Société Générale 25. Bank of America Corporation* To note that the companies listed with a * have direct connections to BlackRock Directors that Vitali et al. identify as an international “super entity.” BlackRock’s board has direct links to seven of the twenty-five most interconnected corporations in the world. BlackRock’s eighteen board members control and influence tens of trillions of dollars of wealth in the world and represent a core of the super- connected financial sector corporations. Other Key Figures and Corporate Connections within the Highest Levels of the Global Economic “Super Entity” Below is a sample cross section of key figures and corporate assets among the global economic “super entity” identified by Vitali et al. • Capital Group Companies - Privately held, based in Los Angeles, manages $ 1 trillion in assets. • FMR - One of the world’s largest mutual fund firms, managing $1.5 trillion in assets and serving more than twenty million individual and institutional clients; Edward C. (Ned) Johnson III, Chairman and CEO. • AXA - Manages $1.5 trillion in assets, serving 101 million clients; Henri de Castries, CEO AXA, and Director, Nestlé (Switzerland). •State Street Corporation - Operates from Boston with asset management at $1.9 trillion; directors include Joseph L. Hooley, CEO of State Street Corporation; Kennett F. Burnes, retired chairman and CEO of Cabot Corporation (2011 revenue: $3.1 billion). •JP Morgan/Chase (2011 assets: $2.3 trillion) - Board of directors: James A. Bell, retired executive VP of The Boeing Company; Stephen B. Burke, CEO of NBC Universal, and executive VP of Comcast Corporation; David M. Cote, CEO of Honeywell International, Inc.; Timothy P. Flynn, retired chairman of KPMG International; and Lee R. Raymond, retired CEO of Exxon Mobil Corporation. • Vanguard (2011 assets under management: $1.6 trillion) - Directors: Emerson U. Fullwood, VP of Xerox Corporation; JoAnn Heffernan Heisen, VP of Johnson & Johnson, Robert Wood Johnson Foundation; Mark Loughridge, CFO of IBM, Global Financing; Alfred M. Rankin Jr., CEO of NACCO Industries, Inc., National Association of Manufacturers, Goodrich Corp, and chairman of Federal Reserve Bank of Cleveland. • UBS AG (2012 assets: $620 billion) - Directors include: Michel Demaré, board member of Syngenta and the IMD Foundation (Lausanne); David Sidwell, former CFO of Morgan Stanley. • Merrill Lynch (Bank of America) (2011 assets management: $2.3 trillion) - Directors include: Brian T. Moynihan, CEO of Bank of America; Rosemary T. Berkery, general counsel for Bank of America/Merrill Lynch (formerly Merrill Lynch & Co., Inc), member of New York Stock Exchange’s Legal Advisory Committee, director at Securities Industry and Financial Markets Association; Mark A. Ellman, managing director of Credit Suisse, First Boston; Dick J. Barrett, cofounder of Ellman Stoddard Capital Partners, MetLife, Citi Group, UBS, Carlyle Group, ImpreMedia, Verizon Communications, Commonewealth Scientific and Industrial Research Org, Fluor Corp, Wells Fargo, Goldman Sachs Group. The directors of these super-connected companies represent a small portion of the global 1 percent. Most people with assets in excess of $588,000 are not major players in international finance. At best, they hire asset management firms to produce a return on their capital. Often their net worth is tied up in non-financial assets such a real estate and businesses.
Posted on: Tue, 10 Sep 2013 12:52:47 +0000