Commentary: Dell Technologies Was on The Right Side of Trump, But The Wrong Side of History
BOSTON — Actions sustained over several decades are typically a better indicator of corporate commitment and principles than press releases.
That fact has been driven home during 2020, a year of reckoning for the nation in terms of social justice and diversity. As a result, corporations have been clamoring to do everything possible to prove how they’ve gotten in line with a galvanized public and its demand for change. They’ve awoken.
Some corporate initiatives have been genuine while others are nothing but transparent marketing ploys. Earlier this month, financial services company Nasdaq Inc. disclosed a proposal to the U.S. Securities and Exchange Commission that would make companies more accountable. Instead of virtue signaling, the measure would require company board diversity disclosures.
Optics and press releases would no longer be enough. Nasdaq wants quantifiable commitment instead of token, feel-good initiatives promoted by some companies. Tech giant Dell Technologies Inc. provides a glaring example.
In January 2017, the White House named CEO Michael Dell to the 28-person American Manufacturing Council expected to support President Donald Trump’s plan to increase the number of U.S. jobs.
Instead of playing a mostly honorary role, the council would unexpectedly serve as a type of referendum for corporate values after Trump refused to denounce white supremacists who had rallied in Charlottesville, Virginia, and killed a protester in August 2017.
Nine Manufacturing Council members resigned over Trump’s muted response to injustice and the racially tinged aggression displayed in Charlottesville. Tech executive Michael Dell didn’t.
In contrast, Merck & Co. Inc. CEO Kenneth Frazier departed the council citing the value of diversity and the responsibility of corporate executives to uphold the nation’s values. “America’s leaders must honor our fundamental views by clearly rejecting expressions of hatred, bigotry and group supremacy, which run counter to the American ideal that all people are created equal,” he said.
Three years after Dell Technologies aligned itself with Trump and his muddled view of tolerance, the Texas-based company suddenly called for inclusion amid a tsunami of public sentiment. Michael Dell denounced racial injustice in a news release. “… The people who have been ignored are now demanding to be heard. We are listening.”
Dell Technologies, which was founded in 1984, employs 134,000 workers (not including VMware Inc. workers). Last fiscal year, the company posted a $4.6 billion profit on revenue of $92.1 billion, according to an SEC filing.
FEDERAL CONTRACTS
It’s worth noting that from 2018 to 2019 Dell doubled its federal contract revenue. In recent years, it collected billions of dollars in such contracts also while being the target of federal investigations that resulted in hefty financial settlements.
Dell was cited for violations of the False Claims Act, accounting fraud, and offenses related to employment discrimination and consumer protection. In 2019, it settled a discrimination case with a $7 million payment to the U.S. Department of Labor. That case wasn’t an outlier.
The deal came just 16 months after Dell Technologies settled another discrimination case involving black and female employees in North Carolina. That settlement involved back wages amounting to nearly $3 million.
Since 2000, Dell Technologies has been cited for 22 violations, resulting in settlements worth more than $290 million, according to the Good Jobs First website’s violation tracker. But that’s small change compared to the amount it generates while doing business with government agencies.
In 2019, Dell’s federal contracts were worth $1.5 billion compared with $782.5 million in 2018. It’s now ranked the company № 22 on the list of the U.S. government’s largest contractors, Washington Technology news reported.
However, federal oversight appears to be lacking. In announcing last year’s $7 million settlement, the DOL indicated that Dell operated with federal contracts worth $14 million, a fraction of the $861.1 million reported by Washington Technology.
The past year may have taught corporations important lessons that Americans can only hope will be fully embraced and long lasting. The march in Charlottesville illustrated how standing up at such crucial moments is more important than public relations maneuvers.
Unsurprisingly, Martin Luther King Jr. said it best: “In the end, we will remember not the words of our enemies, but the silence of our friends.”