Six months ago, SVB, the parent company of Silicon Valley Bank, announced an audit so important to its business that it sent out a press release to promote it and hired Paul, Weiss, Rifkind, Wharton & Garrison to conduct it.
In hindsight, the audit could have saved billions of dollars and prevented the ruin of so many. The fact that it really wasn’t an audit in any traditional sense, in the same way that Silicon Valley Bank did not conduct itself as a traditional bank, prevented that.
Instead of auditing its own books, SVB used the largesse made off customers’ funds to conduct an “equity audit” to determine its effectiveness in “advancing women and Black and Latinx individuals to positions of influence in the innovation economy.”
Somehow such a project struck SVB as essential to its primary mission, which, somewhere along the way, became something other than banking.
No record exists of Paul, Weiss’ findings. But why do we need a middleman to tell us the answer? The women, black, and LatinX depositors and employees of Silicon Valley Bank cannot possibly give the insolvent institution a positive assessment.
Institutions not committed to not becoming woke inevitably become woke. Institutions that become woke inevitably suffer a corruption of purpose.
This corruption of purpose helps explain Silicon Valley Bank’s inability to perform the most base-level function of a bank: to secure the deposits of customers.
SVB boasted in September of joining a group called CEO Action for Diversity & Inclusion, in November of subsidizing Diversity VC’s report “The Equity Record” lamenting that less than 2 percent of industry assets under management go toward diversity, equity, and inclusion investments, and in December of investing $17.5 million in “Black-, LatinX-, and Women-led Community Development Financial Institutions.”
SVB dedicated whole bloated divisions of the company’s bureaucracy to promoting leftist causes, which strikes as about as relevant to banking as bowling balls are to medicine. Here, SVB press releases touted additions to its “growing” Technology Equity Research Team; there, SVB boasted of hiring a new head of its Access to Innovation program.
Would the Federal Deposit Insurance Corporation underwrite the accounts held by a bank that fixated on investing in white-owned businesses, diverted its funds toward combatting the environmentalist movement, and hired scores of employees to act as commissars ensuring conformity to a conservative company line? Politics so blinds the woke that they do not see the utter recklessness of Silicon Valley Bank devoting such an enormous amount of its resources to promoting leftism.
Its 2022 “Environmental, Social and Governance Report” reads as a banking non sequitur in highlighting the financial institution’s political commitments. It claimed “4,653,500 tons of annual CO2 avoided across 18 deals completed by SVB’s Project Finance team,” bragged that “45 percent of our board of directors are women,” and pointed to the “6 Employee Resource Groups established, fueling a culture of belonging.” If you did not believe SVB’s words, then the accompanying stock photographs of smiling black people and a woman wearing a boy’s regular haircut convey the message.
Elites, as corrupted as Silicon Valley Bank, bestowed honors upon a failing bank because of its ideological correctness. The awards acted as bright, shiny objects distracting onlookers from the reality that Silicon Valley Bank had fatally made political distractions the focus of its efforts.
Bloomberg recognized Silicon Valley Bank in its Gender-Equity Index for the fifth consecutive year in January. A year ago, the Foreign Policy Association honored SVB Financial with its Corporate Responsibility Award. A month ago, Forbes named SVB Financial Group the 20th-best bank in America.
Corporate responsibility, huh?
“At SVB,” its 2022 ESG report informed, “we are committed to following all laws and regulations pertaining to anti-money laundering.”
What else is reorienting the money made from deposits toward environmentalist causes, race-based investments, and a battalion of DEI bureaucrats but money laundering?
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