Fleet Financial Group. New England’s largest bank-holding company, made big news when it fired 3,000 people and reduced its operating expenditures by $300 million. In addition, employees no longer get certain small perks, and even its best customers will pay fees that used to be waived for them. Analysts chalked it up to “corporate downsizing,” but they didn’t point out who had wielded the knife. One month before the layoffs. Fleet was the victim of a racial shakedown.

The villain is self-described “urban terrorist” Bruce Marks, although “midget mugger” might be a better moniker. The very-short Marks grew up in Scarsdale, New York, got his MBA from New York University, and went to work for the New York Federal Reserve Bank evaluating bank-merger applications. It wasn’t an honest living, but it beat his later and extremely lucrative “community activism.” Thanks to his four-year campaign against Fleet, Marks’s Union Neighborhood Assistance Corporation is today $140 million richer.

Marks began shaking his little fist at Fleet when it was planning to buy the failed Bank of New England. He knew from his tenure at the Fed that the bank’s record in lending to “low-income” borrowers, a regulatory code word for blacks, would come under careful scrutiny. If Fleet did not pass the quota test, the Fed would reject its application.

Marks noted that Fleet wasn’t lending directly in Boston’s minority-dominated Roxbury, Dorchester, and South End areas. Instead, it backed other mortgage companies that lent at higher rates. Discrimination! he cried. Why should some have to pay higher rates than others? Well, in a loan market, bad credit risks don’t get any money, and marginal borrowers pay higher rates to match the higher risk. This kind of economic rationale, however, no longer has any place in America, even though blacks, on average, have lower incomes, fewer assets, less-stable job histories, and worse credit ratings than whites.

Marks first looked for some black residents of Boston who were convinced the white man was ripping them off, not exactly the toughest job in the world. Then he got some left-wing reporters to make the usual fuss, and eventually the story was featured by the Pravda of liberal journalism, 60 Minutes. In response, Fleet agreed to stop purchasing loans from lenders in the inner city with higher interest rates, but that wasn’t enough. Marks wanted Fleet itself to make bad loans at low interest rates—and to give his organization a pile of dough.

Boston’s Fed tried to arrange a meeting with Fleet officials so Marks could hand them his “Put all your cash in this bag” note. To their credit, Fleet executives refused, and that’s when the real trouble began. Over two years, Marks’s band of urban guerrillas invaded company meals, meetings, press conferences, and speeches. Once Marks and his union goons barged into a hearing of the Senate Banking Committee and sang spirituals at the top of their voices, perhaps including the old favorite “Swing Low, Sweet Moolah.” For this occasion, Marks wore a “Wanted for Loansharking” T-shirt with Fleet Chairman Terrence Murray’s picture on it.

It was the sort of display that makes executives cower, politicians swoon, and regulators cheer, and in the end, after more pressure from the Fed and the media. Fleet gave Marks $140 million. It also agreed to set aside $7.2 billion for “low-income” borrowers who wouldn’t qualify by normal standards, plus another $800 million for “inner-city borrowers” who make deadbeats look good.

The story ended with a Capitol Hill press conference. Marks hailed the “bold and innovative” new lending program and tossed a hatchet into a papier-mâché coffin to symbolize that, $140 million and all, he was now satisfied. Of course, Marks had actually buried the hatchet in the hearts of Fleet’s stockholders and of the credit-worthy customers who would now not get loans. Another set of victims were the 3,000 employees canned one month later.

Fleet’s management turned out to be cowardly, but the holdup never would have worked without a Federal Reserve driver at the wheel of the getaway car. Once again, the government, special interests, and the welfare class ganged up on a company and the middle class. That’s the welfare state in a nutshell.