U.S. Commission on Civil Rights demands changes to Democrats’ financial reform bill
Four members of the United States Commission on Civil Rights have sent a letter to Senate leaders urging them to remove a section from the Dodd-Frank financial reform bill, which would impose racial and gender quotas on financial institutions.
Earlier this month Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor and senior fellow at the Hudson Institute, made news when she highlighted Section 342 of the recent financial reform bill as a provision which changes employment law in the financial sector from outlawing discrimination to creating a quota system.
Commissioners Peter Kirsanow, Ashley Taylor, Gail Heriot, and Todd Gaziano affixed their names to the letter, which charges the Senate with either “consciously or unconsciously” promoting discrimination.
“All too often, when bureaucrats are charged with the worthy task of preventing race or gender discrimination, they in fact do precisely the opposite,” the letter reads. “They require discrimination by setting overly optimistic goals that can only be fulfilled by discriminating in favor of the groups the goals are supposed to benefit.”
The letter continues, “In this case, the bureaucrats are not even being asked to prevent discrimination, but to ensure ‘fair inclusion.’ The likelihood that it will in fact promote discrimination is overwhelming.”
The letter goes on to chastise members of Congress who insert language purely for political gain.
“Some legislators have evidently come to think of women and minorities as just another constituency whose leaders must be brought on board with incentives when major legislation is being considered,” the letter says. “The notion that legislation should include ‘a little something’ for everyone is troubling in any context, but it is especially troubling in the context of race and gender, given the requirements of the Fifth and Fourteenth Amendments to the Constitution.”
Commissioner Todd Gaziano told The Daily Caller that Section 342, whether it intends to or not, could have dire implications for the financial markets.
“The likely end of creating offices that require these types of racial and gender goals is that it will result in quotas and discrimination,” he said. “There are many existing laws and enforcement mechanisms that already prohibit discrimination. This provision, by contrast, takes affirmative steps to guarantee discrimination.”
The letter comes from individual commissioners rather than from the entire eight-member body. This is due to the fact that the Commission did not have a meeting scheduled until Friday and, according to Gaziano, the urgency of the issue was such that they had to coordinate outside of the planned meeting. He speculated that other members might eventually sign on, or write letters of their own.
Gerald Reynolds, chairman of United States Commission on Civil Rights, told The Daily Caller that the only reason he did not sign on to the letter was that he did not have enough time to review it before it had to be sent. “I have similar sentiments and intend to follow up with my own letter,” he said. “This provision is the creation of a bureaucracy without thought…The approach it takes is to count noses without nuance.”
Reynolds continued by noting that the Section 342 provision in the bill fails to address the real problem for why there is a lack of minorities in the financial sector.
“Section 342 of the Dodd-Frank bill is flawed because it does nothing to address the ‘pool’ problem,” Reynolds went on to say. “The real question it should be asking is, ‘why is the pool of highly-qualified blacks so small?’ One of the drivers is that the quality of education they receive in urban communities is often poor…Instead of focusing on what the root cause is and on the problem, proponents of Section 342 of Dodd-Frank are looking at the results that flow from the problem. They are working on the wrong end to fix it.”
Commissioner Michael Yaki did not sign the letter and says he does not intend to. He was in the minority, saying that his peers were too uninformed to have an opinion on the matter.
“This letter is premature and shows how diversity is a four letter word to some of these commissioners,” he said. “This legislation does not use the word quota. It just works to diversify sectors which have not traditionally been populated by minorities. How they can conclude that this will lead to quotas without hard facts is ridiculous and premature.”
Commissioner Gail Heriot signed on to the letter, but would not speculate as to whether it would have an effect or not. “Our job as commissioners is to advise Congress and the President. Whether they take that advice is up to them,” she said.
Commissioner Peter Kirsanow was more blunt.
“I don’t think it is going to have a substantial effect,” he said. “I think they will ignore it as they have other letters we have sent. Just recently, they ignored our concerns with the health care bill, which contains a number of highly suspect racial provisions embedded deep within the text. They will emerge at some point and we will have to deal with them.”
Kirsanow added that in addition to the constitutional problems associated with mandating quotas, the political implications are also troubling.
“There is considerable evidence over the years that these types of quota provisions dissolve into a political spoils system—we see it at the federal, state and local level—with certain positions being reserved for certain people,” he said.
Commissioner Abigail Thernstrom was also concerned about the implications of Section 342. She told The Daily Caller that had she seen the letter prior to its release, she too would have signed on in opposition to the provision.