It is, by now, well known that gay marriage was legalized in New York state last week. What is not as well known is that Wall Street financiers played a crucial role in the legislative decision. Why and how they did so is an instructive tale about how to get something controversial done in a contentious world.
The issue in New York was not, for most, moral. Virtually all Democrats and many Republicans in that generally tolerant state were long past the point of caring. The Catholic Church, steadfast in opposition, has, over the decades lost membership, financial wherewithal and clout due to serial priestly child-abuse scandals, changing demographics and evolving mores. But passage of the bill was not a given. Republican legislators, in a year of conservative political rage, feared that social issue firebrands would use such a vote against them. New York's governor, Andrew Cuomo, who bravely and effectively led the push for passage, realized their concern. So he approached a number of conservative Wall Street financiers and asked them to offer assurances to Republicans that they would provide financial support for legislators who voted for the bill and were then challenged in the next election. They agreed.
David Weidner reports in MarketWatch (hat tip Big Picture) on why the financiers decided to support this initiative. They had a variety of reasons: there was little political or personal risk as they are sufficiently wealthy to be immune to such attacks, this issue was consistent with their generally libertarian beliefs, some had personal relationships (at least one has a gay son), but ultimately, they decided it was just good business. As Weidner writes, 'there wasn't much reason to stonewall any longer.' JL :
"Wall Street is a macho world. The male-dominated culture supports strip clubs, gambling, hard boozing, fast cars and just about every testosterone-fueled endeavor. Yet when push came to shove, Wall Street’s elite backed gay marriage in New York. So what gives?
For one, personal relationships. Like many Americans, even the staunchest conservatives on the Street knew or were related to someone who was gay. Each of them either had a direct relationship with someone who was gay, or had supported gay rights in the past. Perhaps they were swayed by the libertarian arguments for gay rights, or they simply thought it was the right thing to do. But there might have been a bigger reason: Supporting gay marriage was just good business.
As the New York Times reported, New York Gov. Andrew Cuomo won the financial and organizational support for the gay-marriage bill from Paul Singer, the founder of Elliott Management and an ardent Republican donor; Clifford Asness, the head of the quant fund AQR Capital; and Daniel S. Loeb, the leader of Third Point, a hedge fund.
That’s nothing new. Wall Street firms have offered domestic-partnership benefits for years. Banks and brokerages rank No. 2 behind law firms as the best companies for gays to work for, according to the Human Rights Campaign.
The list of gay-friendly banks includes American Express Co., Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Morgan Stanley and UBS AG, among others.
That said, there are exceptions. A 2011 survey by the Human Rights Campaign ranked CIT Group Inc., Regions Financial Corp. and Franklin Resources Inc. near the bottom for having fewer benefits and support for gay employees.
But those are exceptions. The biggest players in banking and brokerage achieved perfect scores, meaning they offer the most progressive environments for gay employees.
Why? In many ways, it has to do with competitiveness. U.S. banks and brokerages have to compete with their foreign counterparts for top talent. Foreign firms long have been more accepting of employees regardless of sexual orientation.
Second, expense isn’t an issue. Offering health benefits to gay employees and same-sex partners costs about the same as those offered to straight employees and heterosexual couples.
Christian Curry scandal
The real risk for Wall Street is in the work environment. It’s been a dangerous mix in the past, creating hostility. In 1998 Christian Curry, a Morgan Stanley employee whose provocative pictures appeared in Playguy, was fired for alleged expense-accounting fraud.
Curry argued that he didn’t do anything wrong, and that most expense accounts were padded. He claimed workplace harassment and the case blew up. Morgan Stanley workers began complaining online about hostile conditions. The bank shut down access to some websites. Curry eventually settled, and suggested he received $52 million.
People celebrate inside the historic Stonewall Inn after legislators pass a bill legalizing gay marriage in New York. Since then, Morgan Stanley has been aggressive in welcoming gay employees. It has an internal group dedicated to “inclusiveness and respect.” The group also sponsors career events.
While the Curry scandal was a wake-up call, two other factors turned Wall Street gay-friendly. One is the waning influence of the Roman Catholic Church in finance. Merrill Lynch was once known as “the Catholic firm,” yet like many firms on the Street, Merrill had to loosen up to compete for talent.
Finally, there was New York itself. As the city embraced gay culture more openly, the barons of finance found themselves at galas and benefits along with the openly gay scions of media, arts, fashion and other industries. New York’s openness and tolerance seeped into every industry, including banking.
So when gay marriage ultimately became a front-and-center political issue, for Wall Street it wasn’t. It was a no-brainer for economic and personal reasons. Does it mean that macho culture doesn’t exist anymore? No. Neither does it rid every trading floor of homophobia.
Still, when push came to shove, there wasn’t much reason to stonewall anymore.
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