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UPDATE 1-Trump's Virginia comments last straw for disenchanted CEOs

(Writethrough, adding details on disbanding of councils)

NEW YORK/WASHINGTON, Aug 16 (Reuters) - Several U.S. chief executives had been considering resigning from Donald Trump's business advisory councils for months after the president said he would pull out of the Paris climate accord and ban transgender people from the military, sources told Reuters on Wednesday, long before Trump's comments on racial violence this week pushed them over the edge.

Trump disbanded two high-profile advisory groups on Wednesday, after the head of his Strategic and Policy Forum advised the White House the group was breaking up, and a trickle of departures from his American Manufacturing Council threatened to become a mass exodus.

"He was at 95 percent already," a source close to Larry Fink, head of investment firm BlackRock Inc, said of Fink's leaning toward resigning from the Strategic and Policy Forum.

"I think that (Trump's latest comments) just made it 120 percent."

A number of CEOs started to consider more seriously whether to disband after Trump's initial remarks blaming violence at Saturday's white nationalist rally in Charlottesville, Virginia, on "many sides," which was taken to include not only white nationalists but also anti-racism activists who opposed them.

Merck & Co Inc CEO Kenneth Frazier, an African-American, was the first to leave the manufacturing council on Monday over Trump's weekend reaction.

Trump then attacked Frazier on Twitter, prompting other CEOs to consider quitting also. Frazier's resignation was followed by the CEOs of Under Armour Inc and Intel Corp later on Monday.

Trump's fiery comments on Tuesday, doubling down on his initial response to the Virginia rally, unnerved CEOs already doubting the utility and public relations value of remaining on Trump's councils, sources close to several of the CEOs told Reuters.

Soon after Trump's comments on Tuesday, JPMorgan Chase & Co CEO Jamie Dimon, who serves on the Strategic and Policy Forum, started pushing for the forum to take some kind of action, a person close to him said.

Dimon had previously expressed exasperation with politics in Washington, saying in July that it is "almost an embarrassment being an American citizen traveling around the world."

Sensing a breakdown in the group, Stephen Schwarzman, CEO of money manager Blackstone Group and chairman of the Strategic and Policy Forum, convened a call on Wednesday for its members.

After some debate, "the momentum was such that there wasn't much room for dissent," said one source familiar with the discussion.

The decision to disband was agreed and Schwarzman called the White House to inform the president, the source said. Shortly after, Trump tweeted that he was disbanding the two groups.

The leader of the manufacturing council, Dow Chemical Co CEO Andrew Liveris, had planned a call with remaining members to try to salvage the group on Wednesday, according to an email seen by Reuters. The call never took place, superseded by Trump's dissolution of the group.

Sources familiar with the discussions of the boards of Merck and Intel said that they backed their CEOs' decisions to leave because they did not believe stepping down from Trump's councils would have a negative impact on their businesses.

"I don't think these are personal decisions," said Blain Rethmeier, a Republican strategist who worked on the Trump transition and consults with companies in California. "I think these are made through the eyes of what's in the best interest of the company, and the brand risks of what it means to be involved with the council became too much." (Additional reporting by Ankit Ajmera in Bengaluru, David Henry, Michael Erman and Olivia Oran in New York, and Ginger Gibson in Washington; Writing by Bill Rigby; Editing by Saumyadeb Chakrabarty and Howard Goller)