Cleveland 25-Years Ago – 1981 To 2006
By Roldo Bartimole
Oft times the past dictates the future. That’s what I thought when I went back 25 years to a column I wrote in my newsletter Point of View.
I think it can add some to the understanding of what helped Cleveland be so backward. It shows how Cleveland banks played a large role in the demise of many Cleveland neighborhoods.
Brock Weir, the main subject of the piece, was the lead banker of the time and became the guy who really put Cleveland into financial default and disgrace when mayor Dennis Kucinich refused to turn over the city’s electric system to Cleveland Electric Illuminating Co. That was the demand of local banks. In exchange, the banks, led by Weir’s AmeriTrust bank, would roll over some $14 million in notes. Ironically, the $14 million loan was made to the previous mayor, Ralph Perk. The banks essentially automatically rolled over the notes in previous years.
The article notes the reluctance of Cleveland banks to give home mortgages in Cleveland neighborhoods, resulting in the decline still so evident in many neighborhoods.
Weir’s arrogance comes through clearly. It makes the reader, I hope, understand the limited criticism in the news media of corporate leaders in contrast to the pounding given to flawed politicians. It shows how hard-headedness and arrogance was not unique to Kucinich alone.
How civic elites use their positions for personal advantage becomes evident how Weir and others determine who will get money and who will not. Conflict of interest is written all over it.
During Weir’s tenure the name “Cleveland Trust,” the city’s lead bank for decades, was changed to AmeriTrust to relieve it of the burden of having the word “Cleveland” in its name. Ironically, AmeriTrust isn’t around anymore.
I hope to do this occasionally to present a bit of history that rarely was touched upon by the conventional news media. This piece, with minor cosmetic adjustments, was published in May 1981:
Bad Brock
Law director Jack Schulman and his wife, Pat, wanted to meet political rival M. Brock Weir, chairman of Cleveland Trust, as they mingled among guests at a cocktail party before the annual meeting of Leadership Cleveland in which Schulman participated.
So as Weir was standing nearby, the Schulmans asked lawyer Jim Davis of Squire, Sanders & Dempsey to make an introduction. (Davis was the leading attorney in the Cleveland establishment of that day.)
“Are you the infamous Brock Weir? I’m the infamous Jack Schulman,” said the Kucinich administration law director, kidding as he extended his hand to shake Weir’s.
Weir looked at Schulman and refused to shake hands.
“I’m no hypocrite,” said Weir in a loud, angry voice.
Weir then berated the law director, saying that he had said “bad things” about him to the newspapers. Schulman denied making any statement, private or public, about Weir or his bank, now called Ameritrust.
“I’m no hypocrite,” Weir repeated, still refusing to engage in the social grace of exchanging handshakes.
“Well, I’ll tell you want I’m not. I’m not someone who insults people he’s never met,” said Schulman.
The incident reveals the personality defects of a powerful individual who often acts childishly.
Weir came stage center during the Kucinich years when he made himself point man against former mayor Dennis Kucinich. The result: default.
Weir’s arrogance as head of the state’s largest bank has irritated many people but unlike politicians, he has the luxury of the news media’s double standard. The slack news media don’t pursue powerful private businessmen as they do political figures.
Thus, when he resorts to arrogant or childish behavior, Bad Brock doesn’t suffer the indignity of news media exposure. No TV cameras at the doorstep. No cartoons. No persisent questions. No pressure that often makes a mistake become a calamity.
There’s a story that during the conflict with Kucinich, Weir set up a meeting in his executive offices with County Democratic chairman Tim Hagan to discuss a possible candidacy of County Commissioner Ed Feighan via Kucinich. (Kucinich defeated Feighan for mayor in the 1977.)
Amid the silver and fancy china service, Weir told Hagan, in terms that were more like orders from on high than suggestions, what would be expected from him and Feighan in the next campaign.
Hagan, no shrinking violet, was taken aback by Weir’s arrogance. He left Weir holding his teacup waiting for the answer.
Weir had problems summoning politicians to him. It’s said that Weir’s personal animosity toward Kucinich was heightened when Kucinich, also invited to the summit by Weir, attended with his armed bodyguard. Weir was personally insulted. Though the former mayor was sharply rebuked in the news media for statements against business, it was Weir who got abusively personal, calling Kucinich in an interview with an out-of-town newspaper, “a little canker.” When the Cleveland Press picked up the story, it said Weir had called Kucinich, “a little chancre.” That changed the meaning from an odious “ulcerous sore of the mouth” to a more odious “syphilitic sore.” Weir never forgave the Press reporter, refusing to talk to him again though the copy desk had made the spelling change.
Kucinich, in turn, was delighted with Weir’s descent into the gutter.
Weir’s regal manner isn’t reserved for politicians alone. Presently, he has been showing the same contentious attitude toward neighborhood groups and leaders.
Some time ago, he was invited to sit down with leaders of the Buckeye-Woodland Congress in that neighborhood group’s undiminished fight to save its neighborhood by not allowing Cleveland banks to run away.
Weir walked into the meeting and saw that he had been seated opposite the committee members. A nameplate had been set for his place.
Weir picked up the card and tossed it into the air, stating bluntly, “I know who I am. I don’t need that to tell me.”
He then took a seat with the rest of the group and told them sharply, “You’ve got an hour. It’s your hour, now what do you want to do?”
Even some other bank officials have been astounded at Weir’s actions. Says one close observer: “They were dumbfounded at the way the guy was carrying on, but apparently no one had clout enough to deal with it. They thought he was making a mistake the way he was handling Buckeye-Woodland and the complaint (first CRA – Community Reinvestment Act – was a compliant against Ameritrust). A second complaint has been lodged with the Federal Reserve Bank (FRB)
“There’s a lot of bad-mouthing of AmeriTrust among other lenders,” says this observer. “When they were told that the crowd (neighborhood protesters) descended upon AmeriTrust’s annual meeting and didn’t on Central National Bank or Society Bank, the executives were jumping with glee.”
At one meeting where AmeriTrust didn’t send representatives, the other bankers were critical openly of AmeriTrust, says the same observer.
“They feel that the banks are getting a bad name because of AmeriTrust,” he says.
Usually, AmeriTrust has enough power so that when it turns thumbs down on an idea the other banks obediently follow. But when AmeriTrust said no to Buckeye-Woodland’s proposal for a Bank on Buckeye, a local community development corporation helped by Cleveland banks. Central National and Euclid National didn’t follow Weir’s lead. They were protecting themselves and have said they would join in the CDC – Bank on Buckeye.
Some people feel that this indicates Weir’s waning power.
There are some board members, says a bank insider, who are unhappy with Weir on this and other matters.
Weir’s personality doesn’t allow him to avoid thrusting himself into the center of public controversy. During the Kucinich years he seemed to enjoy being in the center of the fight.
“Sometimes I fantasize about playing his (Kucinich’s) game, and at times I’ve had to put a pretty short rein on myself,” Weir told the Press.�
Not short enough, perhaps. Because in addition to newspaper publicity AmeriTrust was featured in a Congressional report on its use of power.
One bank official says that the board of directors warned Weir that it didn’t want to see “Cleveland Trust” (before the name change) in the front-page headlines of the daily newspapers anymore. The bank directors didn’t appreciate the publicity of the Weir-Kucinich clashes.
Weir has the ability, possibly the necessity, to personalize public and bank issues and put himself out front when he need not take the lead. His public involvement can and has at times become a public embarrassment for AmeriTrust.
Just as Weir entered the battle with Kucinich with a certain amount of relish, he has been taking a controversial lead in relations with community neighborhood groups.
“No other chief executive officer has so involved himself personally with dealing with neighborhood groups and put himself out front when he need not take the lead. His public involvement can and has at times become a public embarrassment for AmeriTrust.”
But that seems a necessary part of the Weir personality. At one board meeting, Weir took time to tell board members about a letter he had written to an Ohio State University professor, “putting him in his place,” according to a bank source who felt it was silly and a sign of Weir’s personality defect – ego problems.
A lawyer for a neighborhood group described Weir’s appearance before neighborhood people: “He was something else. He was arrogant as hell. But I give him credit. He came himself. He is street-wise and he’s going to do what he wants.”
“Arrogant,” seems to be the one word used when Weir’s name is mentioned to various kinds of people.
The Weir record certainly isn’t all bad. AmeriTrust rated best of any Cleveland bank in employment of minorities and above average on this score among all corporations, according to a Cleveland Women Working’s 1978 study.
AmeriTrust, for example, has given $25,000 in donations to Lutheran Housing and has extended $100,000 in credit to that workable program.
He also lives in Shaker near the Cleveland border, not in Gates Mills or some other super wealthy suburb.
“I understand he helped desegregate a country club. I don’t know what that means but I guess on that level it’s something,” said a Weir observer.
But on more crucial issues, Weir is found wanting.
Under attack to have AmeriTrust join the Buckeye-Woodland Congress Bank on Broadway, Weir shot down the idea by writing that he was “concerned about the potential for divisiveness and competition with the community which could exist if each neighborhood or street conceived its own community development corporation, as you propose. The potential for such divisiveness could not only destroy the very idea and sprit of your objective, but severely tax the resources of the participating financial institutions.”
Weir’ concerns seem mere evasions.
Weir then countered with his own idea of a development corporation based mostly on a job creation concept. He called numerous community people downtown the day before Easter Sunday to unveil his plan.
“It was a curious type meeting,” says one non-neighborhood participant. “The presentation was unforceful, low luster, and not very convincing. I was surprised the way he (Weir) functioned. It was an unforceful kind of presentation. Boring, really.”
And no written material was presented, only a sketchy verbal outline. Some felt they had wasted holiday time for some unknown reason.
Neighborhood people also felt that Weir wants a vehicle that will maintain control in corporate hands. They feel that their input would be minimum in such a setting and that they will have little power over the direction of Weir’s CDC.
Buckeye-Woodland answered Weir: “To set up a large CDC is beyond our present expertise and will take too long. We are interested in trying the CDC concept on a small scale first.”
But Weir has kept the pressure on as if this were a major battle for the bank with $15 billion plus in assets and a Trust department with $8.8 billion more.
Part of the reason is that AmeriTrust is vulnerable on the facts.
AmeriTrust has been rapidly pulling out of the Cleveland mortgage market (while it brags of its international banking business and makes forays into China to lend money). In the last POV issue, figures were given for various neighborhoods showing the decline by AmeriTrust. But it only tells part of the story.
“If AmeriTrust keeps declining (in mortgage loans) at the rate that it is, the bank will be out of the Cleveland mortgage market in two years. AmeriTrust has been declining at more than 35 percent a year,” says a neighborhood rep that follows loan statistics carefully.
The withdrawal of mortgage money to neighborhoods represents a noose around the neck of the city, squeezing the breath of life out of neighborhoods.
The unwillingness to take risks in the city contrasts for AmeriTrust with its write-offs of $21.9 million in 1980, mostly due to high consumer loans. It was the biggest write-off of debt for AmeriTrust since 1976 when the bank wrote $22.6 million off as losses, mostly for big real estate dealers.
Weir apparently gets conservative when it comes to Cleveland neighborhoods.
Last September about eight funding proposals involving neighborhood groups and studies related to neighborhoods came before the Cleveland Foundation for approval for funding.
The account piece together from various sources shows that before the� trustees could vote on the proposals, Weir, vice chairman of the Cleveland Foundation Distribution committee and chairman of the Trustee committee, asked for a private executive session before the vote.
When the board reconvened, all the proposals had been shelved. There was no evidence of this private session reflected in the minutes of the meeting.
But a foundation official verifies that the proposals were held up (some eventually were funded). The reason given, however, for the delay was a conflict of interest. Not of vice chairman Weir but a foundation employee.
The reason given for the delay was a conflict on the part of former city Community Development director Norman Krumholz, according to a foundation official.
Krumholz had been hired by the foundation part-time to replace Steve Minter, who was on leave. Krumholz also heads the Center for Neighborhood Development at Cleveland State University. That program provides technical support for some of the organizations whose funding was held back.
As a foundation official, Krumholz would be advising the Cleveland Foundation board on proposals he had helped in his other position.
A conflict obviously, but not one that the foundation didn’t know about when it hired Krumholz. In fact, the foundation had benefited by Krumholz’s reputation among neighborhood groups as a straight shooter. They trusted him.
Krumholz’s conflict, according to the foundation official, was raised by Weir; Richard Pogue of Jones, Day, Reavis and Pogue; Tom Vail, Plain Dealer publisher recently� renamed as the city’s representative by Mayor George Voinovich; and David Hill of Garofoli, Kraus, Hill, Roth & Bartunek. Experts in conflicts, obviously.
The groups not funded, of course, had been giving AmeriTrust, among others, problems by protesting the lack of mortgage investments by Cleveland banks.
Weir’s Direct Conflict Of Interest
Most important, included among the proposals rejected by Weir’s action and still not funded was a proposal for $50,000 to update data and develop information and strategies on bank mortgage and loan activity among Cleveland banks in Cleveland and Cuyahoga County.
This research project, to be funded through the Northeast Ohio Area-wide Coordinating Committee (NOACA), would compile and update the same kind of information used by neighborhood groups to file the protest against AmeriTrust, as discussed in the last POV.
Was Weir concerned about Krumholz’s conflict or was he concerned about what the information compiled would show about his bank’s failure to invest in this city?
If we’re going to talk about conflict of interest and power plays, what can one say about the $341,000 AmeriTrust chief using his position and power on a non-profit board to hold up a project that would directly embarrass his bank?
That action represents a true and significant conflict of interest and one that puts the Cleveland Foundation’s independence in question.� As a tax-exempt organization, the Cleveland Foundation should not make decisions based on the interests of its trustees.
The project would have allowed Clevelanders to know which banks, if any, were putting their money in Cleveland neighborhoods and where they were redlining neighborhoods. It would produce the irrefutable proof of bank actions.
The Cleveland Foundation has allowed Weir to put it in potentially serious conflict of interest and to open the foundation to criticism that it merely acts as the protector of major businesses interest when it come to the crunch.
It jeopardizes the foundation’s reputation for funding some of these same programs and opens it to charges that it strangles programs when they have a chance to show some real progress.
It also opens the question of a community foundation, which seats on its distribution board only elites, or the servants of elites. Mayor Voinovich’s choice of Tom Vail as the city’s representative can’t be more than a joke.
Weir, in his battles with Kucinich, once said, “We’re stuck here. We can’t move the bank away from here. So we don’t purposely try to harm the city. Maybe he (Kucinich) can get along without us. But we can’t get along without the city.”
But Weir has been moving the bank and certainly its money away from the city. He, of course, changed the name of the bank from Cleveland Trust to AmeriTrust to avoid the connection to the city.
Now his bank is withdrawing mortgage money from the city neighborhoods, a death-dealing blow.
Moreover, he, through the foundation, wants to even hush up the fact of the bank’s flight from the city.
The most important word for a bank, said the late George Gund of Cleveland Trust, is “growth.”
Weir apparently thinks the best word he has for Cleveland neighborhoods is “shrink,” as he sends money made here around the world but not a couple of blocks away from Ameri Trust?.
Published originally, May 31, 1981, Vol. 13, No. 22, Point of View.
From Cool Cleveland contributor Roldo Bartimole roldoATadelphia.net
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