A powerful group of African American executives helped get Obama elected President. Now they hope he can provide solutions to the economic crisis
On Nov. 4 at 10 p.m., Lyle Logan raised his arms toward the autumn sky over Chicago's Grant Park in triumph. News that Senator Barack Obama had officially won enough electoral votes to become the next President of the U.S. was flashing on the big video screen above the VIP pen at "ground zero" for the 2008 Presidential election results. And Logan, an African American executive vice-president at Northern Trust Co., couldn't hold back the tears suddenly streaming down his face. "I'm overwhelmed," he said, his young son clinging to his waist. "It's just amazing."
Although much of Obama's success can be attributed (BusinessWeek, 11/4/08) to his vision, personal skills, and leadership appeal, no small amount of credit goes to a powerful circle of black business leaders in Chicago. In addition to Logan, they include Valerie Jarrett, CEO of real estate management firm The Habitat Co. and now co-head of Obama's transition team; Jim Reynolds, CEO of investment bank Loop Capital Markets; John Rogers, CEO of mutual fund icon Ariel Investments; Quintin Primo III, CEO of commercial real estate development company Capri Capital Partners; and Frank Clark, CEO of electrical utility Commonwealth Edison.
These black executives have maintained a low profile since early February 2007, when Obama launched his Presidential quest. But they have been Obama's link to well-heeled Chicagoans such as Penny S. Pritzker and James S. Crown. And contrary to widespread statistics showing blacks lagging other groups in wealth, together they have donated some $30,000 to Obama over the past two years.
Celebrating with High-Fives
Just as important, Logan and the others served as a kind of stealth sounding board long before Obama had a glimmer of an idea about the White House. They gathered for a private meeting in late 2002 as he was mulling his run for the U.S. Senate. In a tony high-rise overlooking Lake Michigan near the South Side, the then-largely anonymous state senator vetted his lofty political ambitions with some of his closest friends.
Later, during his second year in the U.S. Senate, Obama called Clark, among others, to discuss whether it made sense for him to mount a bid for the Presidency. Clark, 62, is one of Chicago's elder statesmen and chief of ComEd, a subsidiary of energy giant Exelon (EXC) and the largest electric utility in Illinois, serving nearly 4 million customers in Chicago and Northern Illinois. He didn't mince words: "Your window of opportunity is now," Clark recalls saying. "Go do it."
Flash forward to election night. As a crowd of 125,000 people crammed into Chicago's Grant Park for Obama's celebration, these executives in their business suits and ties celebrated with high-fives in relative anonymity just a few yards from the podium where Obama gave his victory speech, which is just the way they like it. While each of the power brokers pulls in well over $250,000 in annual pay, they say they have no problem seeing their taxes rise under Obama's economic platform. They're interested in not just their own wealth and success but in building a platform for others, especially African Americans, to succeed. "The upper strata earners in this economy will survive," says Primo. Adds Clark: "A tax increase on me or people like me does not affect our lifestyle. If it means supporting Barack and his agenda, I'm O.K." with it.
A Dream Realized
For Clark and other black business leaders in Chicago, Obama's landslide victory signaled more than the oft-cited change in American politics that voters clearly wanted. President-elect Obama signals a new social and occupational ideology for African Americans—in many ways, the realization of Martin Luther King's long-deferred dream that the promise of success on any level is possible.
"Our generation has been limited in terms of how far we can dream," Logan said on Tuesday night just minutes before Obama took the stage. The son of two teachers who worked on Chicago's South Side, Logan majored in accounting and economics at Florida A&M University, a predominantly black college, and later earned an MBA in finance from the University of Chicago. "We've too often been under the impression that we can only serve our own. We've had constraints applied to what we can achieve."
Pointing with both hands toward the podium, Logan said: "This teaches black entrepreneurs and executives to think boldly and broadly. To not think narrowly, but to pursue diverse markets."
Job Creation a Priority
Each of these executives knows first-hand how much damage the economy has suffered since they first helped Obama launch his quest. Rogers' Ariel Investments, for instance, shed about 20% of its staff in August after high energy prices pummeled many consumer stocks in the firm's portfolio. Although the recent drop in energy prices has helped, Ariel's largest fund, with $1.85 billion in assets, is down 21.25% this year. The 19 employees who were let go marked the first such cutback in the firm's 25-year history.
The recession is picking up steam, yet the U.S. has already lost more than three-quarters of a million jobs through September. "Barack needs to create jobs," says Clark. He believes that Obama's most compelling comments during the campaign may have been his statement that the nation could create 5 million energy jobs by investing in alternative fuels such as solar power. "He needs to make sure during his first term people see jobs coming back, whether they're in the auto industry or energy or another sector," Clark adds.
It's equally essential that Obama find ways to stabilize the turbulent financial markets, which have cost investors trillions of dollars in lost value.
Getting Markets on Track
So how do these business executives expect a one-term senator with a background as a civil rights lawyer to lead the nation through its worst financial downturn since the Great Depression? For one thing, he'll need to rely on a stellar team of financial wizards, says Rogers, a member of Obama's national finance committee. Although Obama can bend Rogers' ear any time, "it doesn't get any better than Warren Buffett and Austin Goolsby," Rogers says of the two financial giants who have served as the President-elect's trusted advisers.
Rogers isn't worried that Obama lacks the financial experience to calm today's volatile markets. While the President-elect has been hesitant to criticize efforts by the Federal Reserve or Treasury Secretary Henry Paulson, with whom he has spoken regularly since the crisis accelerated, Obama clearly thinks more aggressive policies are needed. "He has the sort of flexible mind to understand and adjust policies to these extraordinary times that we are living through," Rogers says.
Primo, 53, of Capri Capital, knows how critical it is for Obama to find a way to get capital markets working properly again. A Harvard Business School graduate, Primo founded Capri in 1992 to focus on private equity real estate investments. The firm has grown to become one of the nation's top urban real estate developers, and is now developing a $2 billion retail-residential center in Saudi Arabia, where capital is far more available than in the U.S.
Primo rolls like a rock star through the Middle East, in large part because it's known that he's close to Obama. Talking on the phone from Dubai after staying up until 4 a.m. to watch the election results, a weary Primo says Obama has the health of America's financial markets at top of mind. "I don't think he will dramatically depart from the bailout package of $700 billion," he says. "I think that Barack will seek for Congress to enhance that program to further act as a stimulus. He will work both sides of the aisle…. He is very pragmatic."