La. Bond Commission Bars Big Banks Due To Gun Policies

Aug 21, 2018

$600 MILLION IN BONDS - The state of Louisiana issues bonds to pay for highway construction projects throughout the state. But has barred two of the world's largest banks from participating.
Credit Courtesy: La DOTD

GUNS AND BONDS -  The Louisiana Bond Commission  has blocked two of the nation's largest banks from involvement in a $600 million road-financing plan because of the banks’  policies restricting gun sales and firearms manufacturing by their commercial customers.  The commission met last Thursday and in a narrow 7-6 vote, refused to allow Citigroup and Bank of America, two of the world’s largest  banks  to  work as underwriters  on interstate highway financing  for  the  state.

The basis for the vote stems from some commission members saying the banks policies go against the right to own firearms.  Rep. Blake Miguez,  Republican from Erath, Louisiana told CitiGroup representatives 

Rep. Blake Miguez (R-Erath, LA)
Credit Courtesy: La Senate Video

“I know you’re from New York,” Miguez stated. “This is Louisiana. This is not California. This is not Canada; this is an infringement on 2nd amendment Constitutional rights in Louisiana.”

Brandee McHale, the head of Corporate Citizenship at Citigroup  responded saying individuals can still use CitiBank credit cards to buy firearms.  “We don’t believe we are standing in the way and infringing upon 2nd amendment rights,” McHale explained.

Brandee McHale, Head of Corporate Citizenship / CitiGroup
Credit Courtesy: La. Senate Video

Last March after the deadly shooting at a high school in Parkland, Florida -- Citigroup announced it would end business relationships with retailers that  sell  high-capacity magazines, “bump-stocks” that allow rapid-fire, or sell firearms to people who haven't passed a background check or under 21 years of age unless they have passed firearm safety courses or are active in military or law enforcement.  In April, Bank of America stopped lending money to companies that manufactured assault-styled firearms for civilian use.

John Schroder, La. Treasurer (R-Covington, La.)
Credit Courtesy: La. Senate Video

Representatives for both banks appeared before the commission to explain their policies. But after questioning, State Treasurer John Schroder made the motion saying the banks’ restrictions infringed on Louisiana residents’ constitutional right to buy guns. 

Schroder said “As treasurer and chairman of the Bond Commission it is one of my duties to help hire financial professionals and not necessarily social engineers."

Governor John Bel Edwards’ legal advisor, Matthew Block, opposed the motion to exclude the banks arguing that-- state and federal constitutions involve government infringement on individual rights and don't extend to private businesses.

Matthew Block, Executive Counsel - Office of the Governor for Louisiana
Credit Courtesy: La. Senate Video

Block explained "The Constitution both federal and Lousiaiana constitutions are about governmental actions not the actions of a private employer."

Others said the motion exceeded the commission’s authority and would likely force Louisiana into costly litigation. But the narrow vote came 7-6 in favor of barring Citigroup and Bank of America from bond participation.  With house members in favor and senators against.

Currently both banks handle about 23 percent of Louisiana general obligation bonds from previous deals to which the commission did not move to rework.