Anger over gun policies adopted by two of the world’s largest banks after recent mass shootings threatened funding for highway projects in Baton Rouge and Kenner.
The normally staid State Bond Commission hearings erupted Thursday over an effort to keep Citibank and Bank of America from having a chance to underwrite $600 million in bonds because of corporate policies that some Republicans felt are anti-gun rights.
But the Edwards administration’s representative on the Bond Commission was able to water down the resolution, which passed on an 8-6 vote.
The Bond Commission ostensibly was discussing GARVEE bonds, which allows the state to use annual federal highway aid to finance bonds to pay for roads.
Gov. John Bel Edwards hopes to leverage the federal aid into $600 million that will be spent on three projects, including widening Interstate 10 between the bridge and the split in Baton Rouge, creating a better entrance from the freeway to the newly refurbished Louis Armstrong International Airport in Kenner, and in Bossier Parish.
The Commission approved the financing plan without objection. The panel will choose financing partners in July.
But they bogged down over a resolution that would automatically reject bids based on the companies' stance on constitutional issues, such as the Second Amendment right to bear arms.
Citigroup and Bank of America are two of about half dozen institutions large enough to underwrite a $600 million bond issue.
Both banks issued policies to limit gun sales in the wake of the Feb.14 shooting at a Florida high school, which killed 17 students and teachers. Their actions attracted the wrath of Republican lawmakers in Washington, D.C.
Citigroup’s new policy would require its retail clients to make sure they don't sell firearms to anyone who hasn't passed a background check, nor to anyone under the age of 21, nor sell bump stocks or high-capacity magazines, if they wanted to continue to do business with the institution. Two weeks ago Bank of America announced that it would stop financing gun manufacturers.
“As Treasurer and Louisiana’s banker, it’s important for me to make sure we aren’t doing business with companies that violate the laws of the state,” Schroder said. “I don’t know if these policies violate any Louisiana laws, but they certainly sound, smell and look bad. I do not want the people and businesses of Louisiana to be collateral damage.”
Citigroup hasn’t done business with the state during the past three years. Bank of America is handling $424 million in loans and has a processing contract with the state. Schroder said Louisiana 1,486 dealers, gunsmiths, pawnbrokers with federal licenses who are allowed under state law to sell firearms to 18 year olds.
The two banks sent representatives who agreed to collect the Bond Commission's questions and deliver them to their institutions' policy groups.
“It’s practically offensive to me,” Attorney General Jeff Landry said, “that Citigroup and Bank of America can decide to engage in public policy decisions and yet their CEOs don’t have enough respect to come here before us today and answer us as to why they decided to infringe on someone’s second amendment rights.”
He added that he considered the banks’ policies “fascism at its best.”
In a prepared statement after the Bond Commission meeting, Edwards mentioned his military background, love of hunting and defense of the Second Amendment. “However, today’s Bond Commission meeting was an ugly display of political posturing that could have jeopardized a massive infrastructure plan for the state of Louisiana,” Edwards wrote.
Senate President John Alario, a member of the Bond Commission, said the panel’s work was to oversee the state’s debt and to vet requests for bond proceeds. “This may not be the proper forum” for a debate on gun control philosophies, he said. “Will it be our policy when we get a letter from a congressman to hold special meetings to discuss issues like this?”
U.S. Sen. John N. Kennedy, R-Madisonville, called Citigroup and Bank of America “downright offensive” in a number of publications and on television appearances. He also asked the banks to calculate how their policies would impact Louisiana businesses. (Schroder said Louisiana 1,486 dealers, gunsmiths, pawnbrokers with federal licenses who are allowed under state law to sell firearms to 18 year olds.)
“There is no reason for these banks to profit from taxpayer-funded contracts while excluding Louisiana business from their banking services,” Kennedy wrote Schroder. Kennedy, who state treasurer until running for the U.S. Senate, was strongly backed by the National Rifle Association’s political arm in his 2016 campaign.
Matthew Block, the governor’s executive counsel and representative on the Bond Commission, asked to strip out the language that would automatically bar bids from companies with whose policies the members of the commission disagreed.
“This has not been well thought through as to how this would work mechanically,” Block said. Instead, he recommended language that would ask underwriters about their policies but not use that information as the sole reason to reject their bids.
Commissioner of Administration Jay Dardenne said the provision would shackle the state's ability to negotiate the best deal for taxpayers. “We have to balance our desire to confront those companies about policies that we find objectionable against the economic cost to the state in a very important bond issue for the state,” Dardenne said.
Joe Salter said he had been attending bond commission hearings for years as speaker of the house and now as deputy secretary of state and “this is the most lively one I remember.”
Voting for language that doesn’t automatically disqualify banks (8): Matthew Block, for Gov. John Bel Edwards; Deputy Secretary Richard Hartley for Lt. Gov. Billy Nungesser; Undersecretary of Management and Finance Joe Salter for Secretary of State Tom Schedler; Senate President John A. Alario, R-Westwego; Sen. Eric Lafleur, D-Ville Platte; Sen. Jay Luneau, D-Alexanderia; Sen. John R. Smith, R-Leesville; and Commissioner of Administration Jay Dardenne;
Voting for language that automatically disqualifies banks with gun policies (6): Treasurer John M. Schroder; Attorney General Jeff Landry; Speaker of the House Taylor F. Barras, R-New Iberia; Rep. Stephen Dwight, R-Lake Charles; Rep. Blake Miguez, R-Erath; and Rep. Raymond Crews, R-Bossier City.