Citigroup now acknowledges that its predecessor banks may have indirectly profited from slavery and the trans-Atlantic slave trade. Connections with slavery include a 19th century bank president who promoted the Cuban sugar trade, the relationship between the Farmers’ Loan and Trust Company, one of Citigroup’s predecessor banks, and Alabama cotton planters, and Lehman Brothers, which merged with Citibank in 1998 and in the 1850s traded in cotton.
The Citigroup statement posted by Edward Skyler, the bank’s head of public affairs said:
“Looking back at our history as a company which was founded while slavery was still legal, we have always been mindful about what operating at that time could have entailed. For that reason, approximately two decades ago we conducted research to understand possible ties our bank may have had to the institution of slavery. At that time, we did not find records providing evidence of any direct involvement.
“Last year, consistent with our Action for Racial Equity (ARE) commitment, and in light of an increase in the accessibility of information on the topic, we refreshed our research with the assistance of an independent and experienced historical research firm. This latest review of our records largely reaffirmed our previous research in that it did not identify any records showing that Citi or a predecessor institution directly purchased, sold or held enslaved persons. Our added layers of diligence did allow us to learn that some Citi predecessor entities likely indirectly profited from the institution of slavery through financial transactions and relationships with individuals and entities located or operating in the United States before 1866.”
Curiously, Citigroup did not release the names or credentials of the historians employed by the “independent and experienced historical research firm” or the name of the firm. I’ve never met historians who did not take credit for their work, unless they are embarrassed about how it is being misused.
According to the report:
“The Manuscripts and Archives Division at the New York Public Library holds a collection of materials relating to Moses Taylor, a Director and President of City Bank of New York, who, as described below, profited from the institution of slavery. Although the finding aid for the collection identified documents that appeared to be City Bank of New York and National City Bank of New York records, the historians reviewed these documents and determined that the documents were not Citi predecessor records, but rather personal records of Moses Taylor and his businesses.”
The report did acknowledge that:
“Between 1837 and 1882, Moses Taylor was a director, controlling shareholder, and President (1856-1882) of City Bank of New York. Taylor was also a director of Farmers’ Loan and Trust Company. Taylor was a significant figure in the New York merchant economy and built a large fortune from shipping sugarcane and other commodities from Cuban plantations to the rest of the world . . . Previous research undertaken on Moses Taylor indicates that Taylor utilized the bank as a private treasury for his own enterprises and required his companies to keep their principal accounts at City Bank of New York . . . Taylor himself, his business associates, and the firms they controlled supplied most of the bank’s deposits during this period.”
This is the kicker. “The review team did not identify any records in the Citi Heritage Collection suggesting that City Bank of New York directly purchased, sold or held enslaved persons, provided insurance policies to Taylor or his company that used enslaved persons as collateral, or provided loans or other capital to facilitate the trafficking of enslaved persons. However, given that a significant portion of Taylor’s business was connected to the trade of sugar and its derivatives from Cuban plantations that used enslaved labor, City Bank of New York likely profited indirectly from enslaved labor in Cuba by engaging in transactions with Taylor and his businesses.”
In 2011, Citigroup published a 300-page 200th anniversary commemoration Celebrating the Past, Defining the Future. The book tells a somewhat different story about the bank’s connection to Moses Taylor.
Chapter 1 describes “a local bank with national ambitions” between 1812 and 1890. In its early years the bank “mainly served the commercial interests of the merchants who owned it.”
In 1837 it nearly collapsed along with the national economic system in a financial panic precipitated after President Jackson and the Democratic Party refused to recharter the national Bank of the United States. The City Bank of New York survived the panic because John Jacob Astor, the wealthiest man in the country at the time, deposited substantial funds in the bank and installed Moses Taylor, “an importer of Cuban sugar,” on the bank’s Board of Directors.
Extended sections describe Taylor’s role in transforming the bank into a national financial institution with international connections. Taylor is lauded as a “commodity specialist” who focused on Latin America and was able to “broaden City Bank’s client base” (36-47). The “commodity” that Taylor specialized in was sugar produced in Cuba by enslaved Africans smuggled into the Spanish colony in violation of international bans on the trans-Atlantic slave trade.
Not only did Taylor broker Cuba’s sugar exports but he and the bank served as an “investment advisor for Cubans and sent samples of bylaws, reports, rules, and regulations to help them set up companies or commercial associations” (37). Taylor and City Bank became the “middleman” for plantation owners arranging for them to purchase equipment for “railroads, ferries, lighthouses, steam engines and machinery for sugar mills” (37).
As full-service banker, Taylor arranged for the education of the children of the Cuban planters and slaveholders when they were in the United States and shopping trips for their wives. In response and gratitude, the Cuban planters laundered profits from slave produced commodities by investing approximately $3 million in the United States, worth almost $300 million today, employing Taylor as an agent.
It is worth noting that it was illegal for American citizens to be involved in the trans-Atlantic slave trade and it was a capital offense after 1820. The trans-Atlantic slave trade was a criminal enterprise and Taylor, and his bank, should have been prosecuted.
Citigroup and its predecessor banks have a long history of seedy business practices.
In the 1970s, Citibank helped force austerity on a financial troubled New York City after the bank precipitated the crisis by divesting from city securities and refusing to back new financial instruments. In response, municipal unions withdrew millions of dollars in deposits from the bank. Citibank was also forced to pay fines levied by the state for charging consumers usurious interest rates.
In the 1980s, Citibank was a vocal opponent of corporate boycotts of apartheid South Africa and one of the largest lenders to both the South African government and private corporations there. In the 1990s, Citigroup was implicated in a money laundering schemes with Mexican drug cartels and was investigated by Congress.
In 2002, Citigroup was involved in one of the biggest corporate scandals in United States history when it was accused of helping Enron disguise debt and agreed to pay $101 million to settle charges relating to the Enron fraud case. During the 2008 financial crisis Citigroup recklessly purchased toxic subprime mortgages. In 2012 Citigroup was one of five mortgage companies that agreed to pay a combined $25 billion to resolve allegations of loan and foreclosure abuses.
More recently, Citibank’s Mexican affiliate, Banamex USA, was discovered laundering drug money and illegally shipping it back to Mexico. As part of a legal settlement, Banamex USA “admitted to criminal violations by willfully failing to maintain an effective anti-money-laundering” compliance program and Citigroup agreed to pay $97.4 million in fines. In 2015, Citigroup was forced to pay another multi-million dollar fine because of other “oversight” lapses at Banamex USA.
In May 2016, government prosecutors in New York’s Eastern District announced that Citigroup was being investigated over ties to alleged bribery and corruption at FIFA, the international soccer federation. Traffic Group, a conspirator in the bribery charges, made wire payments totaling $11 million from a Citibank account in Miami. In February 2017, Citigroup paid an “administrative penalty” 69.5 million Rand ($13 million) in South Africa for colluding to fix prices and manipulate financial markets.
One almost good thing was that after years of financing coal production, in 2015 Citigroup claimed it would shift its focus to environmental sustainability mode, but in 2017 it was still the number one banker for coal power in the United States. According to a 2023 report Banking on Climate Chaos, Citibank was heavily invested in loans for Arctic oil exploration and the production of natural gas and coal to the tune of $34 billion in 2022 and a total of $332 billion between 2016 and 2022. Only JPMorgan Chase was more complicit in financing catastrophic climate change.
Citigroup’s predecessor banks were guilty of supporting slavery and Citigroup has a lot to pay for. Moses Taylor and Citigroup pioneers who built their bank on the labor of enslaved Africans clearly were role models for current Citigroup executives and their unsavory policies.
Illustrations, from above: Newly arrived enslaved Africans being prepared for sale in Cuba; The building at South and Fulton Streets in South Street Seaport where slave traders met in the 1850s; Moses Taylor, who was one of the wealthiest people in the history of the United States; and Citibank offices at 111 Wall Street in New York City occupy the same site as Moses Taylor’s 19th century office at 55 South Street.