I just finished reading a very unsettling blog post by serial entrepreneur Jason Goldberg, whose new startup fabulis has apparently had its bank account blocked by Citibank over posting “objectionable content” on its company blog, at least according to a bank employee he spoke to on the phone. (see update below)
Fabulis is described on the blog as “the social network that helps gay men connect with amazing experiences nearby and around the world”. Could that be what Citibank is objecting against rather than the content on the blog, which is perfectly innocent any way you look at it indeed?
Now, in case you don’t know Goldberg: he’s an accomplished Internet entrepreneur, who had stints at the White House, AOL and T-Mobile under his belt before founding Jobster (and raising more than $50 million for the startup) and after that socialmedian (which he sold to Xing in December 2008).
For his latest startup fabulis, Goldberg has raised $625k in seed funding from the likes of Washington Post and Venture Partner at Mayfield Fund Allen Morgan, and essentially aims to become the leading social network and lifestyle website for homosexual men.
Which is challenging if your financial institution freezes your bank account and marks it for immediate termination after reading a couple of your – again, perfectly harmless – company blog posts.
This is Goldberg’s take on the blocking of the account:
In a bit of strange and disturbing news, fabulis discovered today that someone(s) at Citibank had decided arbitrarily to block fabulis’ bank account due to what was described to us on the phone as “objectionable content” on our blog. In fact, the account — it turns out — was blocked a few days ago without anyone letting us know about it by phone or email.
Mind you, fabulis is a serious business, backed by some serious players, and for the life of us we can’t find anything “objectionable” on our blog besides some good humor, some business insights, and some touching coming out stories from some great and fabulis gay people.
So, what gives?
And wtf. When did Citibank start reviewing blogs to decide who can bank with them?
Calls into Citibank tonight resulted in a temporary lifting of the block while a compliance officer is asked to re-review our website on Thursday. Stay tuned … we’ll update you on this shocker as we learn more.
Whatever update comes, this is a PR nightmare for Citibank, and I’ll be curious to see what the company has to say about this atrocity. In a comment on Hacker News, Goldberg says he doesn’t think Citibank is being homophobic, and calls out moronic behavior instead:
Do I think Citibank or Citigroup is a homophobic malicious company? No. Do I think some compliance officer is a moron who made a really stupid decision? Yes. Three hours of trying to sort this out provided even more comedic insanity than I even revealed on the blog post. Including a bank manager who didn’t want to talk about this because she was uncomfortable talking about the content of our blog over a recorded phone conversation. Oh, and we’ve learned that the account was marked to be a cancelled by said compliance officer for this “objectionable content.” wtf.
All we know so far is that we finally got someone to lift the block on the account, but that the best she could promise is another review of the situation today.
Very uncomfortable for sure, but mostly for Citibank, who for the record, apparently does not want to be reached by e-mail even by press. So even if there’s a perfectly reasonable explanation to this – that the bank’s allowed to share publicly – I can only hope to reach someone by phone when it’s morning in the U.S. who can look into it and tell us what’s up.
Update: In a new blog post, Goldberg says that he spoke with a Citibank employee about the issue, and was told that the bank had decided to terminate the startup’s account because the “content was not in compliance with Citibank’s standard policies.” He adds that the bank’s management promised to review the situation later today.
Update 2: A second update on the fabulis blog says a representative has called and apologized. According to Goldberg, the bank spokesperson said that “all 3 of the citibank individuals who over the past 24 hours each individually claimed that fabulis’ account was to be terminated for compliance issues around the content of our site, were all wrong to have said what they said.”
No kidding. As Goldberg concludes: “Hmph. Something smells.”
Update 3: Goldberg now received an apology by e-mail from a Bill Brown, who says he’s responsible for the Citibank Branches in Manhattan, and the entrepreneur says he’s accepted the apology.
This is what the e-mail read:
We have not been formally introduced and I imagine that this is a poor way to become acquainted. I am responsible for the Citibank Branches in Manhattan and have just learned today of the challenges you have experienced in opening an account with us.
I apologize for any confusion about the status of your account and the Fabulis website. Whatever statements that were made by any Citi representative related to the content of your website were inappropriate and made in error, and I will review in detail what happened. You have my firm commitment on this point.
I truly regret any unintended message that my employees may have conveyed about your new business venture. I place great value on your business and assure you that Citi is committed to the gay, lesbian, bisexual and transgender communities. In fact, this week Citi has announced the financing for the True Colors Residence, a housing facility for homeless GLBT youth in New York City.
I recognize that, to this point, this dialogue has been carried out on the internet via postings. You may choose to post this apology, however, please do not doubt the sincerity of my message and the responsibility I have for ensuring our customers do not encounter a similar experience.
I still say they should move to another bank just to make a solid point.
(Thanks to GigaOm for pointing out the updates to this story first)