Silicon Valley Capitulates to Jesse Jackson Shakedown

Jesse Jackson

It would seem that the heyday of Jesse Jackson Sr., racial shakedown artist extraordinaire, is long over.  Regrettably, some of the largest companies in California’s Silicon Valley are resuscitating his career. Jackson once again is flying high, issuing ultimatums for “diversity” and giving companies a choice: 1) orient hiring, marketing and other activities to favor nonwhites; or 2) get ready for a boycott, picketing, a lawsuit or other bad publicity. This May he gave information technology industry titans the full Jesse treatment – and on their own turf. At shareholder meetings of eBay, Google and Facebook, Jackson issued aggressive calls to hire blacks and other “people of color,” especially for top positions. Two months earlier he had brought his shakedown campaign to Hewlett-Packard. The response from each company was either silence or capitulation.

Jesse Jackson, popularly known as Rev. Jesse Jackson, now 72, more than anyone this side of Al Sharpton, embodies the spirit of intimidation that passes for “civil rights” in this country. Through his Chicago-based nonprofit organization Rainbow/PUSH, Jackson for decades has fused black identity politics, socialist economics and Biblically-tinged universalistic moralizing to promote his idea of social justice. His mix of charisma and menace, rendered in a street preacher’s cadence, has cultivated a large contingent of followers. Long a dominant player on the Democratic Party Left – he ran for President in 1984 and in 1988 – Jackson is a master of the business shakedown. When he speaks, white executives listen. For they know that he can make life very rough if they don’t “cooperate.” Corporate leaders from Anheuser-Busch to Toyota have acceded to his demands, agreeing to earmark large sums of money for minority hiring and outreach. Moreover, they typically make sizable donations to Rainbow/PUSH, thus making possible future shakedowns. Often as well they set aside a certain portion of their contracting to minority-owned firms that pay Jackson for referrals. Jackson’s style can be called affirmative action with a clenched fist. And because of white executive timorousness, it gets results.

The information technology industry for a good number of years – and especially this year – has been one of Jesse Jackson’s favorite targets. It is huge, growing, and drives economies the world over. Rainbow/PUSH well over a decade ago established a Silicon Valley Project office. There is money, potentially billions of dollars, to be extracted on behalf of minority groups ostensibly “excluded” from tech industry employment and from the larger American society. Whether such concessions actually benefit the company in question is at best of secondary importance. Jackson is a power broker. His specialty is hardball politics on behalf of racial minorities, most of all, blacks. To the extent he cares about the nature and function of corporations, it is in hopes of shaming them. To soften up his targets, he often uses the disingenuous language of “fairness” and “togetherness.” When it comes to bullying white executives, he knows from experience that most eventually will fold like a cheap suit.

Jackson took his moral theater on the road this month to the annual shareholder meetings of some major Silicon Valley-based IT firms. First stop: eBay. The online auction and shopping website, with gross revenues last year of more than $16 billion and a worldwide work force of about 33,000, held its convention in San Jose on Tuesday morning, May 13. Jesse made his presence felt. He urged company officials to raise the profile of racial minorities in hiring for the executive suites and in contracting. The next day, May 14, he hectored officials of Google at their headquarters in Mountain View, Calif. about their alleged lack of diversity. He demanded that Google release race-based workforce data as a means of boosting black and other minority employment. And on May 24, Jackson and his entourage were in Redwood City, Calif., site of this year’s Facebook shareholder meeting. With Facebook Chairman/CEO Mark Zuckerberg, CFO David Ebersman and Chief Operating Officer Sheryl Sandberg looking on, Jackson denounced the company for its “patterns of exclusion.” The following is a lengthy excerpt:

I speak to you today representing the Rainbow/PUSH Coalition, about the need to open up a new era of growth and inclusion of African-Americans, Latinos and other people of color in Silicon Valley’s technology industry. Inclusion leads to growth, and when there is growth, everybody wins.

Facebook is uniquely positioned to lead this new era. We won’t know how good Silicon Valley can be until everyone can participate.

All we ask is that everyone plays by one set of rules, and that there is an even playing field for all. It’s the moral imperative.

We want mutually beneficial, two-way trade. We share consumer patterns together; pay taxes together; we serve in the military together to keep our nation secure. We should share in America’s opportunity and growth together. Bit today there is an imbalance; too much one-way trade, too many gaps. We have money market talent and location. You have technology, expertise and resources. We can all win. Let’s close the gaps.

African-Americans and people of color comprise a huge and growing part of your customer base. In a short period of time, minorities will comprise the new majority population of California.

Technology is supposed to be about inclusion, but sadly, patterns of exclusion remain the order of the day. Let me state some facts:

ZERO blacks on boards and in the C-suites.

Tech powerhouses including Facebook, Apple and Google, and new media companies like Twitter – have ZERO blacks on their board of directors.

In the C-suites, Facebook, like Twitter, Apple and far too many other Silicon Valley and technology firms have ZERO African-Americans or Latinos on their senior executive leadership teams.

Just as women leaders are now making some headway – like Sheryl (Sandberg) and Marissa Mayer at Yahoo – companies like Facebook must build a pipeline wherein African-Americans and people of color to lean in and move up, too. The “we can’t find them” syndrome is a thing of the past. Who is looking? And where are “they” looking? We can find them, if we look in the right places. Facebook and other tech firms can find us when it comes to consumers of technology. You can find us – we are CEOs and CFOs and engineers and lawyers and ad agencies and investment bankers, too. Rainbow/PUSH stands ready to search with you to find qualified candidates (Note: no doubt in exchange for a generous finder’s fee).

The responses by these information technology leaders could have been predicted. Management at eBay had nothing overt to say, which amounts to tacit agreement. More telling was the response by Google. In exchange for Jackson’s demand for the company to release employee demographic data on its U.S. work force, David Drummond, chief legal officer (who, like Jackson, is black), promised that his company would release the numbers. He didn’t take very long to deliver. Yesterday, the company issued a report on workforce diversity showing about 60 percent of Google employees are white and 30 percent are Asian (apparently not all racial minorities arouse Jackson’s sympathies). Laszlo Bock, Google’s senior vice president for public relations, also wrote in a blog: “Put simply, Google is not where we want to be when it comes to diversity, and it’s hard to address these kinds of challenges if you’re not prepared to discuss them openly, and with the facts.” Facebook also gave in, adopting a feckless “we’re really, really trying” line. COO Sheryl Sandberg explained in writing: “We have built a number of great partnerships, groups like the National Society of Black Engineers, the Hispanic Alumni of Georgia Tech, Grace Hopper Celebration of Women in Computing, and Management Leadership of Tomorrow. And these partnerships have been great because they are really helping us get great candidates and reach out.”

Jackson’s IT gambit has been all over the map this year. Earlier this year, he wrote a letter to tech companies, including Apple, Facebook, Google, Hewlett-Packard, and Twitter, replete with his familiar hectoring style. On March 19, he showed up at the Hewlett-Packard shareholders meeting at the Santa Clara Convention Center to skewer CEO Meg Whitman and her company’s record on minority hiring. And just two days ago, appearing on CNBC, Jackson denounced information technology firms for their lack of “diversity.”

It’s important to keep in mind that though major U.S. employers are not required to make employee demographic data public, they must furnish such data to the U.S. Equal Employment Opportunity Commission. And the numbers eventually can be used in a federal lawsuit against any company for its “disparate impact” upon minorities. In other words, even if a tech firm hasn’t willfully discriminated against minorities in any phase of its operations, it can be sued anyway because its actions inadvertantly had the effect of keeping minority representation below an ostensibly proper level. National Legal and Policy Center has strongly critiqued this doctrine as it applies to such issues as mortgage lending and federal employee hiring and promotion.

All of this is depressing. Jesse Jackson’s targets in this case are among the largest and fastest-growing firms in the entire business world, not just in the information technology sector. If these corporations can’t summon the cojones to stand up to Jackson, small start-ups certainly aren’t likely to do so either. Most IT industry leaders are more than happy to succumb to people like Jackson if doing so deflects threats, however hollow, of boycotts, lawsuits and other sabotaging of the company brand name. In business, image is everything. And nothing weakens a company image these days quite like a charge of “racism.”

Fortunately, there is one person in Silicon Valley who has demonstrated a willingness to resist Jackson. That would be T. J. Rodgers, founder and CEO of the San Jose-based Cypress Semiconductor. Some 15 years ago, Jackson had embarked on a similar campaign to promote affirmation action in IT industry employment. But Rodgers wouldn’t back down. In March 1999, he authored an editorial for the San Jose Mercury News, “Valley Should Stand Up to Jackson’s Divisive Tactics,” in which he rebutted Rev. Jackson’s campaign. A few years earlier, he had referred to boardroom quotas as “unsound” and “immoral.” He was right then and he would be just as right today. Other business executives could emulate his example.

Tech firms, whether specializing in hardware, software, e-commerce or social media, don’t owe a thing to any one class of “underrepresented” people. They are in business to provide quality products and services. Theirs is a ferociously competitive world in which merely moving forward with insufficient speed can spell obsolescence. One must constantly innovate or risk being left in the dust. If black, Hispanic and other minority-group tech startup entrepreneurs think they can succeed in that world, and with a boost from venture capital firms, let them have a go of it. Nobody is holding them down. But it’s not the job of Google, Facebook or any other successful company to make amends for nonexistent wrongdoing on their part. Their job, within the bounds of ethical and legal behavior, is satisfying consumers and generating profits. Part of that job involves telling people like Jesse Jackson to take a hike.

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