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Prepared Statement of Jacob Walthour Jr. to the New Jersey State Senate

New Jersey State Senate

Prepared Statement

December 3, 2020

 

I am Jacob Walthour, the co-founder and Chief Executive Officer of Blueprint. On behalf of the employees and partners of Blueprint Capital Advisors, I want to thank you for the invitation to address the esteemed co-chairs and members of the Joint Committee on Economic Justice and Equal Opportunity.

Blueprint is the only known African American asset manager domiciled in the State of New Jersey and one of few woman or minority-owned firms to ever have the privilege of managing a portion of the State’s pension fund. I assume that our presence was requested today because of our well-publicized federal lawsuit filed against Governor Murphy and his Division of Investment.  I believe it is the largest discrimination case ever filed in the state of New Jersey and one that I filed after tremendous pain and suffering by members of the Division of Investment and the Department of Treasury who have attempted to shut me up through economic retaliation and humiliation and now they are attempting to cover up their quid pro quo system of operating and the racial animus that underlies their treatment of Blueprint.

I want to be clear that I am not talking about the past.  The current administration is acutely aware of the treatment that we have suffered and in fact members of the Murphy administration have at various times traded turns putting their knee on the back of our economic necks in attempt to squeeze the life out of my firm.  Senator Ron Rice called this an “economic lynching” that has left a stain on the eye of the State of New Jersey.  As a man of faith, I can say that only by the grace of God and the strength of my partners have we survived.

Finally, after years of suffering, begging for justice and pleading for fairness we filed.  We filed and it felt good.  It felt good to tell our story the way a runaway slave felt when he left the boundaries of a plantation and tasted freedom.  Sadly, it felt like slavery.  Having someone intentionally inflict pain on you and continue and continue hoping that they can break your spirit or crush the life out of you is exactly how I felt three years ago.  I decided to write a letter to the Division and express how I felt.  My co-founder Carrie Pickett expressed fear that even my sensitively worded emails might prompt serious retaliation. I wrote the following:

Carrie,

I understand your concern. I need to make sure that WE are heard. If my relationship with Chris ends then it ends. I have been fair and supportive. We just delivered a good idea. In the end, I’m trying to save our firm and not protect the irrational people. Even slaves stood up for themselves. Why are we so scared?”

Unfortunately, my partner was correct and the maltreatment continued.  And despite, the national heads of the big three – the NAACP, The Urban League and the National Action Network contacting Governor Murphy and demanding an investigation into the facts of our complains of blatant discrimination and retaliation, there has never been a sentence written about what happened to Blueprint.  Despite prominent clergy and senior elected officials demanding investigations, Governor Murphy has turned his head.  Meanwhile, his orbit of political appointees have tried to slander Blueprint and myself and convince our supporters and clients to abandon us.  In fact, Corey Amon, the Director of the Division of Investment was caught trying to contact Blueprint’s clients to sabotage our relationships and cause economic harm to our firm.

 

When I testified before you in January, I said that there is a rhetoric and a reality to Phil Murphy.  He claims to be about fairness.  He claims that Black Lives Matter.  He claims to support women’s causes. He claims to be about transparency.  That my distinguished committee members is the rhetoric of Phil Murphy.  The reality of Phil Murphy is that despite discussing disparity studies as a precursor to policy changes – he has yet to commission a disparity study in his first three years.  The reality of Phil Murphy is that his 13 person front office staff had no blacks when I brought it to the attention of Black leaders six months ago.  The reality of Phil Murphy is that he refuses to release statistics on how much business is going to women and minority-owned businesses before and after his administration started.  The reality is that when we uncovered a drinking water crisis in our largest city he boarded a plane to India and abandoned the Newark water crisis.  However, he came back to steal credit shamefully from people who worked hard to fix the problem.

When I testified in January, pre-COVID 19, I talked about the sad reality that while most of New Jerseyans enjoy an economic boom our cities and neighborhoods inhabited by ethnic minorities are suffering from economic depression.  10 months into the pandemic its gotten even worse.    I talked about how the disparities between Blacks and other ethnic groups are embarrassingly wide.  I told you that in New Jersey, the median net worth for white families is $270k while that of black and Latino families is $6k and $7k, respectively.   I told you that while NJ is number 2 or number 3 in terms of per capital income and wealth, that income and wealth is not evenly distributed. And in effect, we have two New Jerseys.  To my surprise Governor Murphy heard me!  And, in his upcoming State of the state address a few weeks later he announced a task force to address economic disparities.  That was in January 2020.  Ladies and gentlemen that was 11 months ago.  I have a question for you…where is the task force?

 

I live in Essex County. Home to both Millburn, which has one of the state’s highest median household incomes at $190k and Newark, which has one of the state’s lowest at $19k. Yes.  The income of a Millburn family 13 miles away from a Newark family is 10x that of the Newark family.  Wouldn’t it be great if a Black person could hop onto Route 78, drive 13 miles and multiply their income by 10 times.  Unfortunately, its not that easy.  Last year, U.S. Census Bureau statistics reveal there are 79,243 people living in poverty in the city of Newark. The population is 280k. That means almost 1/3 of the population is living in poverty. Only 22% of property is owneroccupied. 15% have college degrees. Per capita Income $19k. The unemployment rate is 130% of the national average.  I am a huge fan of Mayor Baraka and County Executive Joe Divincenzo – just like they worked tirelessly at fixing the water crisis they do so solving the everyday problems of Newark.  But where is the state leadership.  Governor Murphy received 94% of the black vote in NJ and has no plan for the state’s largest city and largest Black population where 1/3 (pre-pandemic) of the population is in poverty.  Meanwhile his Republican opponent, Jack Ciataerelli, has developed an extensive plan for Newark that will address decades of economic injustice that has left Newark still with vestiges of the 1960’s riots.  Now, I am not here to campaign for or against Governor Murphy.  However, I think it is telling that a Republican candidate recognizes the plight of New Jersey’s largest city while the Democratic Governor who constantly talks about diversity and fairness ignores it.

Which brings me to my point – if this administration is not willing to address the state’s Black population with honesty and integrity and provide resources and solutions to address the imbalances and disparities, why should I think that he would ever bring himself to help Blueprint or any other Black owned firm.  He hasn’t hired one black to work in the division of investment and it hasn’t had a black investment officer in over 10 years.  Despite legislation, signed into law by him that mandates the DOI to invest with minority owned firms, he has hired one black-owned firm in three years.  We have now issued over 30 OPRA requests to prove the extent of the racism that exists in his administration and the DOI and we have yet to receive one requested email.

There is a quote in the black community that comes from Maya Angelou.  She said that when someone tells you who they are…you have to believe them.  And to quote Former first Lady Michelle Obama, “Being a leader doesn’t change who you are…it reveals who you are.” Governor Murphy has shown us who he is and he certainly has shown me who he is.

“In response to the early data suggesting that the COVID-19 outbreak pandemic is hitting Black communities particularly hard, we are writing to request that the silence on the racial impact of COVID-19 end.” Association of Black Women Attorneys

“What happened to Blueprint (Black-owned business) and its founder, appears to be a modern day lynching and is a stain and a black eye on the state of New Jersey.” Senator Ron Rice, Chair of Caucus of Black Legislators

“Unfortunately, it appears these words of support are just as hollow as ever, failing to translate into real change. While many elected officials are guilty of this disappointing turn, the disappointment is most profoundly with Governor Phil Murphy.”

Brandon McKoy is the president of New Jersey Policy Perspective.

Elise Boddie is the founder and director of The Inclusion Project.

Richard Smith is president of the NAACP New Jersey State Conference

Eric Dobson is the deputy director of the Fair Share Housing Center

Charles Boyer is the founding director of Salvation and Social Justice New Jersey

 

“This is a binding moment for those who say they represent our interests to demonstrate it in a way that is impacting inequities: the high impact of poverty, high unemployment, lack of public contracts, lack of a disparity study being completed.”

John Harmon, AAChamber of Commerce

 

So, when we moved to Newark not only did, we have a Blueprint for Blueprint we had a Blueprint for Newark. We met with the mayor and county executive and received a tremendous response to our plan to employ Newark public school children and Rutgers and Essex County College students with paid internships. We were bringing higher wage jobs typically seen in New York City where you have thriving banking and asset management industries. We would fund local charities and other community programs and bring expertise that could help other minorities start and scale businesses. And, I am proud to say we were currently working with McKinsey, the global consulting firm, on a business accelerator for Newark that can be a model for inner-city, minority communities across the country.

 

Sadly, I must report that we have done all of this not with the state support but in spite of the state. We have run headfirst into the “The Uncomfortable Truth” and we can now support what that report says about New Jersey. As Renee Koubiadis, executive director of the Anti- Poverty Network of New Jersey has said that racism “operates as a perpetuating force and serves as a resistance to change in the historic distribution of wealth.” Her report further said that “Structural racism inhibits the opportunities available to people of color to be productively employed, accumulate wealth and achieve financial stability.”

When we look at the Division of Investment, I see it the way the governor says he sees it – things should be fair.

New Jersey’s population is 50% female. 13.5% black and 13% Latino. However, less than 5% of external assets are managed by MWBE firms. Relative to other states that care about diversity in the execution of their pension New Jersey is 25-30 years behind its peers. Our neighbor right across the Hudson River has over $20 billion invested with MWBE firms or 10% of its total assets. In contrast approximately 5% of New Jersey’s fund is invested with MWBE firms? The New Jersey Fund has hired three MWBE managers in 10 years. There are 14 SIC members and not one female appointee. There has not been one African American or Latino investment officer in over 10 years. According the Derek Greene, the staff threatened to quit if one were hired.  In the last three years, I do not believe that even one new MWBE firm has been approved for direct investment. I don’t have to tell you that we have a problem.

We have a problem. But even worse we don’t have a solution. The disparity here is telling and if we don’t hire more women and minority investment officers’ things will not change. If we don’t appoint more women and minorities to the SIC things will not change. And, I am afraid that unless there is a legislative imperative expressed in terms of goals and timelines, things will not change. Further, if we do not have change the state will suffer in two ways. First, its pension plan will underperform. The truth is that woman and minority managers have strong performance and when they are overlooked and not allocated to the state misses an opportunity to perform at higher levels. And, when the state’s pension doesn’t perform we know who makes up the difference – employees and taxpayers. Second, our communities suffer. Asset management businesses are very profitable enterprises and they have the ability to put minority communities on more solid economic footing as their profits are distributed to churches, non-profits, internships, jobs and business investment.

We are in effect standing in our own way in the quest to right the economic injustices of the past and level the playing field for all in NJ. And, as African American money managers and residents we are not asking for preferential treatment. We are asking for fairness and equity and an opportunity the very promises made by Governor Murphy. I will share with you that as a company our experience with the State has been far short of fair and lacking in equity. And, I often ask myself why is Blueprint being treated this way? The answer gets back to the uncomfortable truth. This state has a race issue. The question is are we going to keep accepting it or are we going to bring about real change? I hope this committee brings about change.

Thank you for the invitation to appear today and I am happy to answer any questions.

Jacob Walthour, Jr.

Chief Executive Officer

Blueprint Capital Advisors

 

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