Morgan Stanley Under Fire for Minority-Only Intern Program

Morgan Stanley CEO James Gorman (Getty Images)
February 15, 2022

An advocacy group is pressing financial giant Morgan Stanley to end an internship program open only to gay students and select minorities.

The Project on Fair Representation on Tuesday sent a letter to Morgan Stanley and Princeton University warning that identity-based criteria for the bank’s 2022 Freshman Enhancement Program violate federal nondiscrimination laws. The internship is open only to "Black, Hispanic, Native American, and/or LGBTQ+ freshman undergraduate student[s]," according to Morgan Stanley’s website. Princeton has allegedly encouraged its students to apply for the program, according to the letter.

"Morgan Stanley and Princeton are leading institutions in our culture," the letter reads. "What you do matters not only because it affects the individuals involved, but also because you set an influential example for others. Pandering to activists with ‘diversity, equity, and inclusion’ initiatives like this internship program is actively harming and racializing our already divided country."

The program keeps with the uptick in race-based benefits in recent years. Following George Floyd’s death in Minneapolis, gig economy behemoths like Uber and Postmates waived delivery fees for black-owned restaurants. And public health agencies have encouraged providers to prioritize certain minority groups when distributing scarce COVID-19 therapeutics.

Morgan Stanley’s program appears to use race and sexual orientation in a wooden fashion. While a holistic review that considered race and sex among numerous other factors might survive a legal challenge, the bank’s website and outside materials that describe the program explicitly state that candidates must be gay, black, Hispanic, or Native American to apply.

Based on Morgan Stanley’s description, it appears that white and Asian applicants who are heterosexual are categorically ineligible for the program. Tuesday’s letter notes that federal law prohibits all forms of race discrimination in employment and contracting. Morgan Stanley declined to comment.

Lawyers for the Project on Fair Representation said in Tuesday’s letter that the program’s existence indicates a "broader dysfunction" at both Morgan Stanley and Princeton. A sound legal review would never authorize discrimination based on race or sexual orientation, they argued.

"It is difficult to understand how these programs passed internal legal review in light of the clear statutory prohibitions discussed above," the letter reads.

The letter is addressed to Eric Grossman, Morgan Stanley’s chief legal officer, and Ramona Romero, general counsel at Princeton.

The Freshman Enhancement Program is billed as a four-week program to help rising sophomores better understand Morgan Stanley’s operations. Interns are placed with one of four divisions—global capital markets, investment banking, wealth management, or sales, trading, and research—for both virtual and in-person training and networking.

A Washington Free Beacon review found that elite universities besides Princeton encouraged their students to pursue the program.

Harvard’s office of career services encouraged students to apply to the program. Guidance on Harvard’s website notes that the program is only open to gay and minority freshmen. Bates College’s Center for Purposeful Work flagged the program in a seven-page diversity internship handout that appears to be from the 2018 academic year, and highlighted the identity-based application restrictions.

The University of Michigan’s career center promoted an information session about the program set for Jan. 31, according to the university’s website. The materials did not mention the selection criteria. Denison University in Ohio also alerted students to the internship.

Tuesday’s letter also notes that institutions that receive federal dollars are subject to federal nondiscrimination laws like Title VI of the Civil Rights Act, which prohibits discrimination based on "race, color, or national origin in any program or activity that receives federal funds."

The Project on Fair Representation’s director is Ed Blum, a Texas-based activist behind a landmark lawsuit accusing Harvard of discrimination against Asian students. The group’s lawyer is Boyden Gray, the White House counsel to former president George H.W. Bush, who now leads a litigation boutique involved in conservative causes.

Princeton did not respond to repeated requests for comment.

PFR letter on Morgan Stanle... by Washington Free Beacon