Predatory Contract-for-Deed Sales Cast a Long Shadow in Chicago

Picture featured in the December 1968 edition of the Jesuit Bulletin.

Picture featured in the December 1968 edition of the Jesuit Bulletin.

Chicago  Sometimes it felt like fifty years ago.

That’s only partially because sometimes the conversation would toggle back and forth to the work the Contract Buyers’ League did on Chicago’s West and South Sides decades ago from 1967 to 1972 or so, as strategies and tactics that would address the current, horrid, predatory comeback of contract-for-deed purchases were compared to the old campaign in a day long and continuing conversation between CBL veteran organizers and leaders, contemporary activists, and concerned community and clergy. It is also because we were literally sitting among the remaining survivors of the ghettoization and depopulation of North Lawndale and Austin as we met in beautifully paneled rooms in one rectory in Lawndale and slept in the former rooms of long reassigned priests in the empty floors of another rectory in Austin managed by one priest now, where eight had once lived.

Real estate manipulation, financial exploitation, and banking and institutional abandonment and racism built these 21st Century neighborhoods, even as we examined the great battles 50 years ago that were heroic without being a turning point and sat among the beautiful architectural and institutional ruins of that time. Contract-for-deed purchases are a way that a seller buys distressed property and then exploits a buyer, a family, almost invariably low-and-moderate income and too often minority, by flipping the property without making repairs while extracting predatory payments at huge premiums almost hoping for a default since there is no equity and a quick eviction process, since there was no actual property transfer, allowing the seller to sell again to another victim or another greedy seller, and keep the cycle going again.

The Contract Buyers League was a campaign, spearheaded by Jack Macnamara, a former Jesuit seminarian then, who sat with us today, and a steady stream of almost eighty college students who did stints in summers and school semesters off-and-on for years as volunteers to staff the research, hit the doors, and help the members put together the weekly Wednesday meetings and constant diet of pickets, actions, and events. Around the table were some of those former students, including by old friends and comrades-in-arms from ACORN, the SEIU, and AFL-CIO Mike Gallagher from Boston and Mark Splain from the Bay Area as well as Jim Devaney, a former volunteer from Cincinnati. A former Black Panther from those days and other community leaders now tried to puzzle out how, with the reemergence of contract-for-deed activity now in the wake of the foreclosure crisis and home lending desert for lower income and working families, we might be able to refashion a Contract Buyers campaign that could work and win now.

It goes without saying that today is different than 50 years ago. Rather than being concentrated in neighborhoods like Lawndale and Austin in Chicago and other cities with large minority populations then, today the victims are spread throughout the metropolitan area. We looked at a sample list of contract buyers acquired by two vulture hedge fund operators and there were few in Chicago itself compared to working class suburbs and developments like Homewood, Hoffman Estates, and Orland Hills. How would we get the density that put hundreds in a room on a weekly basis 50 years ago? Estimates are as high as 7 million families who are under contract-for-deed agreements now nationally, but putting them together wouldn’t be easy. We were all veteran door knockers, but we talked about how to use data files, voter lists, robo-dialers, social media, and other tools to flush out the victims and leverage the public policy and political space to create change.

There’s more work to be done in coming days, but two things kept returning us to the task of today. One was hearing our new friends from these communities where we were meeting talking about how their father’s and grandmothers had bought and raised their families in contract houses. Another woman speculated that the mystery of how her sister had lost her house might have been through a contract-for-deed rip-off, and she left at the end of the day to call her and finally ask. And, then there were the stories of the actions, lawsuits, and even some victories of 50 years ago to continue to remind us that we could only really lose, if we refused to fight this plague once again.


Realtors and Redlining Destroyed Neighborhoods – Was Alinsky a No-Show?

redliningNew Orleans   Looking into the rising return of the family crushing and neighborhood killing predation involved in contract-for-deed property transactions being revived by Wall Street veterans and facilitated by weak regulations and federal off-loading of foreclosure inventory from the real estate bubble of 2008, I stumbled onto an interesting book, Family Properties:  Race, Real Estate and the Exploitation of Black Urban America by Beryl Satter.  Published in 2009, Satter is not only a historian and chairperson of that department at Rutgers University, but has skin-in-the-game, since she was driven to the subject to understand the conflicting family story of her own father who died when she was a child and whether he was a crusading civil rights lawyer and advocate in Chicago or a slumlord himself.  

            Being only half through the book so far, I can’t definitively answer her question, nor have I arrived in my reading to the sections on the Contract Buyers’ League, which was central to my motivation in uploading the book to my Kindle.  On the other hand, I’m knee deep in an excellent, well-written, and researched history that puts race and real estate speculation squarely at the heart of urban neighborhood deterioration from the post-war decades until our current times.  In Little Rock, where I first ran into contract-for-deed exploitation, it was always clear that if there was a power structure anywhere in the city it was centered in the real estate interests, and from our 1972 campaign to “Save the City” forward, including forcibly confronting blockbusting in the Oak Forest neighborhood, they were our main opponents.  In that sense, Family Properties was a deep affirmation and an extension of the argument and those experiences across the urban battlefield of America.

            Somewhat unexpectedly though, I’ve found nothing subtle in Satter’s critique, and condemnation of Saul Alinsky and his community organizing in Chicago during those years.  She bells him repeatedly, beginning with his antipathy for organizing the poor, who were most exploited by all of these practices, and for his inability to strategically and tactically embrace the reality of race in his organizing and the practices of the organizations they built in Chicago.  She doesn’t argue so much that the problem was direct racism, as more fundamentally a weakness in the Alinsky organizing model itself, saying that

“…ineffectiveness of the OSC [Organization of the Southwest] and TWO [The Woodlawn Organization] highlighted the two major flaws of Alinsky’s model of organizing:  his insistence that organizing efforts be fully funded before they could be launched, which left him vulnerable to pressure by the wealthy donors, and perhaps more serious, his belief that they should tackle only issues that were ‘winnable.’”

Sharpening her point she argues that, “Unfortunately, Alinsky’s insistence on fighting only for winnable ends guaranteed that his organizations would never truly confront the powerful forces devastating racially changing and black neighborhoods.”  Ouch!

            She piles on evidence to the extent that her arguments are almost irresistible, include his scolding of his lieutenant, Nicholas von Hoffman and others, for getting too involved in real estate issues when he was in Europe, that he thought were jeopardizing organizational funding, his opposition to fighting black displacement in Hyde Park, and his view that fighting “racial discrimination that lay at the root of community decay…was ‘too complicated.’”  Satter adds that,

“Alinsky often cast urban renewal as an ‘unwinnable’ issue to be avoided.  TWO’s attitude toward housing was similarly confused.  The group apparently felt that the redlining policies that forced black Woodlawners to buy on contract were too complex for effective community mobilization.”

Satter even cites Alinsky’s own biographer in the claim that killing the Square Deal campaign was done on a totally transactional basis,

“According to Alinsky’s biographer, the Square Deal campaign was ‘intentionally terminated by Alinsky and von Hoffman’ because TWO wanted the financial support of merchants when it turned to ‘larger issues such as urban renewal.” 

Twisting the knife, she adds,

“The net result was that, instead of blazing a new path for community activism, TWO became yet another demonstration of the perils of reformers’ financial dependence on the very people they needed to challenge.”

            Adding insult to injury she argues that the creation of the West Side Organization and its achievements were “an overt challenge to Alinsky, who had warned him against organizing the very poor – an action that Alinsky believed would divide the larger community.”   During the Southern Christian Leadership Conference and Martin Luther King effort to take the civil rights movement north, she includes an assessment from one of the movement’s legendary organizers that was equally devastating, quoting…

“…James Bevell, a charismatic Mississippi-born African American who had participated in virtually all of the major Southern civil rights crusades.  In Bevel’s view, too, Alinsky ‘simply taught how to, within the context of power, grab and struggle to get your share.’”

            None of this is definitive, but it’s a critique that has weight and can’t be ignored.  Having organized and fought redlining, realtors, and neighborhood deterioration for decades, as organizers we may have to confront whether or not Saul Alinsky, as a primary architect of community organization, was not only a no-show when it mattered in Chicago, but abetted the problem by skirting the battlefields that counted, by not using issues to build power for the bigger fights, but instead running from the fights themselves.  If that’s the case, the legacy of that shadow could still be crippling the work that needs to be done in addition to the way the work is done.


Lessons from Greece, Spain, and Chicago for Progressives

VoteFraudNew Orleans        Recently Dan Cantor, the long-time head of the Working Families Party of New York and now director of their multi-state efforts to create a progressive alternative party, co-authored a piece that ran in the publication, In These Times, about lessons we could learn from the electoral victories of Syriza in Greece and the upsurge of support for Podemos as an alternative, progressive party in Spain.

The eight lessons were:

Lesson 1: Clearly identify the enemy.

Lesson 2: Against the oligarchs and the “totalitarianism of the market” which serves as a cover for their interests, we, the forces of democracy, have to fight back.

Lesson 3. Inequality is objectionable, but more fundamental is people being denied the things that they need.

Lesson 4. Draw a link between what working people need and what society as a whole needs.

Lesson 5. Have a program. Say what you will do—don’t get dragged into debates about how you will do it. 

Lesson 6. A program needs spokespeople, and it really helps when those spokespeople are or will be in government.

Lesson 7. Like Greeks, Americans think that their political system is broken—and they want an alternative.

Lesson 8. No mourning for golden days.

The easiest of the eight is probably not mourning for “golden days,” because goodness knows when that might have been, but let’s not get distracted.  These lessons are not just valuable as a guide for what the Working Families Party might envision, but generally inform how progressive politicians even within the Democratic Party like Senator Elizabeth Warren from Massachusetts or New York City’s Mayor Bill DeBlasio might operate.  Reportedly, even presidential candidate, Hillary Clinton, is in New Hampshire at least sounding like a progressive for a minute or two.

None of this is easy and Cantor points out how different the world is when he notes

“By way of comparison, the WFP in Connecticut and New York got about the same percentage of the vote in their 2014 legislative races that Podemos got in the European legislative elections that put them on the political map, but the U.S. system does not turn minor party votes into a percentage of a legislative body.”

Importantly, the Working Families Party is finally broadening its reach – and appeal – by abandoning its primary tactic of fusion and running on its own line, noting that the Connecticut branch of the WFP just elected their first state legislator anywhere on their own independent party line.

Talking recently to colleagues who were involved in the progressive challenge in Chicago to the newly re-elected Mayor Rahm Emmanuel, they also note that any realistic alternative challenge must find a way to weld together the black and brown voters and issues within the progressive forces, which failed to happen in Chicago.

The letter from the progressive wing of the US Senate including Warren, Minnesota’s Franken, Vermont’s Sanders, and several others to the FCC demanding the monopoly merger between Comcast and Times-Warner cable be rejected is another good example of the bounty of available planks we have for our program.

Ideas and initiatives abound.  We need more “grit” and get in the organizing now to make it happen.


Bad Romance: Women’s Suffrage (this is a Parody)


An Insider Hits the Nakedness of the Charter School Empire

New Orleans   Everywhere around the country, charter schools and their operators are poking through the concrete of school yards like weeds.  Billionaires and beleaguered Mayors and school superintendents often herald their potential as a way out of their own gnarled path of over grown capacity and underfunded programs.  Huge fights in Philadelphia and now Chicago are closing hundreds of urban schools, making a smaller charter movement still educating less than 1% of the total public school population nationally seem like a viable alternative, all of which forces all of us who care about public schools to continue to examine the situation in New Orleans that since Hurricane Katrina remains the largest urban charter school experiment in America.

A new voice, Professor Brian Beabout of the University of New Orleans, won the 2013 Emerging Scholar Award from the American Educational Research Association, for a careful, but not dispassionate study of the charter system having spent 4 years in the New Orleans system as a Teach for America instructor before making the transition to academia.  His analysis, reported in Baton Rouge’s The Advocate should be a sober warning to the charter cheerleaders.

First, he pops the bubble that the New Orleans charter changes were “wiping the slate clean,” especially because a “series of inequities” were foundation in the new school regimes including some charters not providing busing, others with enrollment ceilings, selective admissions, and perplexing lottery entry procedures.  In cost saving charters he scores the reliance on green, inexperienced and cheap teachers like he was in his first four years as a teacher and notes that contrary to the charter public relations, many of the old teachers were categorically the “best teachers he has ever come across,” though some 7500 school employees were fired after Katrina.

He notes as well that contrary to the decentralization mantra of the charter movement in New Orleans increasingly some of these functions have had to be centralized, especially those that were benefiting the charters by discriminating like the expulsion policies and the application process.  Professor Beabout astutely notes that as charter operators add more schools to their brand, they “resemble districts” which he called “antithetical to the charter movement.”  Additionally, putting a lie to the claims that charter schools bring diversity, he notes that most of the larger operators look increasingly the same.  Although Beabout did not use this metaphor, they seem like Ford and Chevy competing against each other rather than a race between a tractor and a race car.   Beabout is also clear the talk of charters returning “power to the community” is nothing more than rhetoric, given the unrepresentative nature of charter boards and the continued usurpation of the citizens’ right to vote for school boards overseeing all of the schools.

Beabout’s recommendations were also fascinating.  He argued for the following:

  • A $1000 penalty in reduction of state aid as a fine to charter schools using selective admissions.
  • A better relationships between charters and the community.  The Future is Now Oprah fiasco couldn’t be a better example of this need.
  • The need for transparency around the construction on new facilities which he currently compared to “3-year-olds at a Christmas party” as well as transparency on teacher assignments.

Beabout was clear, as I have been in writing about this in the past, that the current charter movement in New Orleans is completely unsustainable currently and propped up by outside, ideologically motivated money and interests trying to pump up test scores to claim a coup against unions and other public school advocates, none of which can be handled with current tax revenues in an unaccountable and undemocratic system.   As Beabout states clearly, “If the outside dollars go away, it will come to a crashing halt.”

The charter movement in New Orleans is currently a hustle built on a house of cards, not a model of reform or something other schools could or should duplicate.

Please click  Charter Schools on the Radio.




Wells Fargo Racial Steering and Discrimination Settlement with Justice Department

New Orleans    The recently announced settlement between the Department of Justice and Wells Fargo Bank saw them pony up $174 Million to provide restitution to 34,000 customers because of racial discrimination in lending rates and steering them into toxic subprime rates caught my eye and brought me to full attention.  This might be a case of justice delayed not having been denied.

Some years ago with ACORN after settling with Ameriquest (remember them?) and HSBC on predatory lending, Wells Fargo had come into our sights as the next biggest offender.  We found a zillion cases of families who would have been eligible for lower interest conventional loans that had ended up in subprime disasters and a lot more.  The highlight of ACORN’s National Convention in 2004 had been a march of 1500 to their skyscraper in Los Angeles only blocks away from the stunningly dramatic opera building designed by Frank Gehry.   There we handed Wells executives copies of the suit we had just filed against them on these grounds.  Based on a lot of factors including a change in various laws around class actions we finally ended up settling on a California-only basis for thousands there to receive restitution and agreement on “best practices” that would be implemented by Wells to prevent this from happening in the future.

Almost exactly one year ago in July 2011 Wells Fargo settled with the Federal Reserve for over $80 million for essentially ignoring everything that they had committed to in our settlement from 2004 to 2008.  Now one year later and almost $100 million more they are having to settle with Justice on a pattern of discrimination and steering, which would have also been precisely what they swore to us they were not doing once again.

I reached out to Sarah Siskind with Minor, Barnhill out of Chicago and Madison, who along with Neil McCarthy of San Francisco, had represented ACORN on the Wells matter as well as the earlier HSBC settlement.  My questions were:  How did Justice get them and was there anything we would have missed earlier?  Sarah speculated that with Justice records subpoena power they were able in all likelihood get access to all of Well’s borrower “profile” data including credit scores and crunch the numbers to more clearly see – and prove –the pattern or discrimination and steering by Wells into higher interest “products.”   In 2004 we only got lip service from Bush’s Justice Department on the issues.  Having a real Justice Department now obviously makes a difference because it means real investigations that even the “stonewall first” mantra of the Wells legal team and outside attorneys can’t prevent.

Of course in the Wall Street Journal Wells goes out of its way to continue to deny with every breath that they were really involved in any racial discrimination.  They seemed to have invoked the famous Richard Pryor defense:  “Are you going to believe me or your lying eyes?”

Sarah said that some were saying Justice might have settled to quickly and cheaply with “non-admissions” language, but that didn’t trouble her, and it doesn’t trouble me either.  What troubles me as we look more and more at banking in the light of other “criminal enterprises” is that this repeated litigation and settlements with ACORN before 2004 and now with both the Federal Reserve (in what was a record settlement for them 1-year ago!) and now with the Department of Justice is also evidence of a culture of discrimination and a management system that supports and encourages any means necessary, including possible racial bias, to achieve short term goals.

Somewhere in their bunker by the Bay, Wells executives need to finally learn a lesson that they seem to want to assiduously avoid no matter the hundreds of millions of dollars in fines and clean house to rid themselves of this continuing taint of bias and discrimination.


Obama Feeling Heat on Immigration Reform

Chic Imm ReformWashington There is finally hope for comprehensive immigration reform if only because the inside-the-beltway strategy is crumbling and the anger and hurt if finally forcing itself into the open and driving the debate.  Many activists and advocates have been pleading for a rally, march or some show of strength and purpose since exactly such an event was squelched for Inauguration Day 2009.  Now a year later with some small progress in tone, but mostly some severe disillusionment with the lack of progress on the local vigilantism sanctioned by 287g, the increased punitive enforcements and senseless family breakups from unnecessary deportations, and the thousands pushed out of jobs the base knows the score no matter what lipstick DC players might put on this pig.

Not surprisingly on the eve of the March 21st Rally and March, the President and his people summoned a dozen advocates for a meeting Thursday at the White House to try to soften some of the blows.  Parsing the statements after it was over from participants was no easy task, especially reading the snarky line in the Times claiming the advocates were mainly happy to have had the President there for an hour of the session.  I’m sure there’s a way that could have been written more patronizingly, but I’ll have to think about it.  An hour from the President is frankly no big deal when dealing with the problems of 12 million plus undocumented immigrants and what this means to a core part of the progressive – and Democratic – constituency among Latino voters in this country.

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