Memo to the Obama Administration: if you want to see the makings of a national model to hold big banks accountable for fixing foreclosure-devastated neighborhoods, go to Milwaukee and talk to citizen leaders of a community organization who are practicing what Saul Alinsky preached.
"You broke it, you fix it," demonstrators chanted outside Wells Fargo's downtown Milwaukee headquarters on a cold January day two years ago. The scores of angry citizens were members of a broad-based community organization, Common Ground, that is comprised of some 40 interfaith religious congregations and other organizations. Ultimately, they targeted not only Wells Fargo but also four other large banks -- Deutsche Bank, U.S. Bank, Bank of America, JP Morgan Chase -- that either owned, were trustees or servicers of foreclosed houses.
Forty years after his death, Alinsky's influence is alive and well not only through his still widely read book, Rules for Radicals, but also through the work of his Industrial Areas Foundation (IAF) that he started more than 70 years ago with a grant from Marshall Field III, scion of the Chicago department store family.
Today's IAF has created more than 60 community organizations in the U.S. and abroad, but one of the newest, Common Ground, that spans Milwaukee and three adjacent Wisconsin counties, is doing what even the federal government has found to be so elusive: holding big banks accountable for the subprime foreclosure fallout that has left many cities much poorer and pockmarked with foreclosed and abandoned houses. By successfully pressuring five big banks into an unprecedented multimillion dollar commitment to help rehabilitate Milwaukee neighborhoods and winning local government support, the IAF's grassroots Milwaukee organization has forged what observers say should be replicated nationwide.
Before they took to the streets, some 250 Common Ground volunteers devoted nearly a year and hundreds of hours researching the banks' financial statements and foreclosure filings, and going door-to-door documenting the condition of poorly maintained, abandoned houses that degraded neighborhoods. The grim statistics: more than 20,000 foreclosure actions since 2007, a staggering $4 billion in lost property values and, in the case of just one bank, Deutsche Bank, an astonishing 17,041 housing code violations.
Consulting with city officials, Common Ground developed a set of demands, which included a bank-financed fund for the rehabilitation of abandoned houses. At first, the banks refused to meet, but Common Ground members, with terrier-like tenacity, weren't going to be stonewalled like the city government had been when the banks ignored the upkeep of their foreclosed houses.
Using media coverage to good advantage, Common Ground leaders hosted a high-profile public hearing where housing and financial experts explained the link between the blighted neighborhoods and the banks' investment in the subprime mortgage market.
In May of 2010, Common Ground sent two of its members some 4,000 miles to confront Deutsche Bank's CEO, Josef Ackermann, at the bank's annual shareholders meeting in Frankfurt, Germany. German media gave Common Ground's story about Deutsche Bank extensive coverage, including its slogan: "German immigrants built Milwaukee; now a German bank is destroying Milwaukee." After a Common Ground member addressed the shareholders in fluent German, Ackermann announced that he was sending a high-level delegation to Milwaukee to meet with Common Ground and city officials.
But the negotiations with Deutsche Bank and the other four banks dragged on for a year, and it took another trip to Germany, plus a Common Ground appearance at Wells Fargo's 2011 shareholders meeting in San Francisco before a deal started to take shape.
Wells Fargo was the first to step forward with a financial commitment and by the end of the summer the other four banks did, too. The total: $33.8 million in cash and mortgage commitments for priorities that the city and Common Ground identified: the rehabilitation of 100 foreclosed houses in one pilot neighborhood, Sherman Park; mortgage commitments so the rehabbed houses in Sherman Park and other neighborhoods can be sold; hiring more nonprofit housing counselors and supporting a new nonprofit organization that will employ and train low-income men and woman to monitor foreclosed houses and keep them safe and secure.
Here's the larger, national significance of the Milwaukee story.
First, to repair foreclosure-damaged neighborhoods in American cities, grassroots groups with the pluck and persistence of Common Ground must organize to pressure banks to do the right thing when other institutions, including government, are not up to the task. These groups also have the indispensable role, which banks and governments cannot perform, of strengthening the social fabric in fragile, recovering neighborhoods by inspiring local residents to become engaged citizens and shape their own destiny.
Second, the Milwaukee story shows how a savvy community organization and city officials working together can leverage limited public money. Like other hard-hit cities, Milwaukee received federal Neighborhood Stabilization Program funds. When Common Ground brought the banks to the negotiating table, city officials agreed to target $2 million of its NSP money to revitalize the Sherman Park neighborhood. With that $2 million, Common Ground leveraged a total of $33.8 million from the five banks, a ratio of almost 17 to 1. Multiply the woefully inadequate $7 billion in NSP funds appropriated nationwide to fix devastated neighborhoods by 17 and you get a much more realistic $119 billion. That should be the big banks' share, at a minimum. Call it the banks' down payment on repairing the subprime damage.
The precedent that has been established with the banks in Milwaukee has national implications, according to Alexander von Hoffman, senior fellow at the Joint Center of Housing Studies of Harvard University, who calls the multi-bank financial commitment "unique and significant." And as Alderman Michael Murphy, the respected, veteran chairman of Milwaukee's Common Council Finance and Personnel Committee says about the Milwaukee model: "I would hope that other cities would look at this as a blueprint of how to try to address the foreclosure crisis." Indeed, it is a blueprint and a success story that deserves to be repeated -- and, one would hope, promoted by the Obama Administraton.
Sanford D. Horwitt is the author of Let Them Call Me Rebel: The Life and Legacy of Saul Alinsky.
HuffPost Politics brings you the top political stories three days a week. Learn more