Maybe Elizabeth Warren could coach Hillary Clinton...probably not.
But I sure would vote for Warren!
Carl
following is part of an article by Michael Hiltzik:
Wells Fargo CEO John Stumpf offers a clinic in how to weasel out of
real accountability
Wells Fargo Chairman and CEO John G. Stumpf, who has been described as
"the Mr. Clean of banking," took his unflappable and well-groomed mien
Tuesday to
a hearing room on Capitol Hill to defend the bank against allegations
that it had massively defrauded millions of its customers.
Amazingly, he made himself and his bank look worse. This underscores
the question we asked just a day ago:
Why does he still have a job?
The context of this question is the disclosure that Wells Fargo
bankers opened as many as 2 million fake accounts in the names of
existing customers and
others, without their knowledge and permission, and stonewalled their
inquiries and complaints. The scam went on from at least 2011 through
2015, though
Stumpf revealed that the bank is now reexamining accounts from as
early as 2009. On Sept. 8, it announced an agreement to pay $185
million in fines and
penalties to two federal regulators and the Los Angeles City Attorney's office.
You should resign. You should give back the money that you took while
this scam was going on, and you should be criminally investigated.—
Sen. Elizabeth
Warren confronts Wells Fargo CEO John Stumpf
The bank's explanation has been that this was all a scheme
mysteriously concocted by "rogue" employees coast-to-coast, of whom
5,300 have been fired. Stumpf
denied on the stand, as he has in interviews, that the root cause of
the outbreak of dishonesty was Wells Fargo's relentless pressure on
low-level bankers
to "cross-sell" products — push credit cards, personal loans and other
deals — upon all customers. He stoutly denied that the company's
"culture" contributed
to the problem.
The company's sales goal was as high as eight accounts per customer,
vastly more than rival banks thought reasonable, and it ceaselessly
boasted to investors
of its cross-selling success as evidence of its expertise in retail
banking. Let's call this by its proper name, as did committee ranking
member Sherrod
Brown (D-Ohio): "I call it fraud because I got tired of the euphemisms
a long time ago."
On the whole, Stumpf's performance Tuesday followed the standard
playbook for beleaguered CEOs: He mechanically offered contrite
apologies, swore to rectify
the fraud and not let it happen again, and vowed personally to "accept
full responsibility for all unethical sales practices in our retail
banking business."
The hollowness of this pledge was promptly punctured by Sen. Elizabeth
Warren (D-Mass.). Here's how that went:
"Since this massive years-long scam came to light, you have said
repeatedly, quote: 'I am accountable,' " she observed. "But what have
you actually done
to hold yourself accountable? Have you resigned as CEO or chairman of
Wells Fargo?"
He started to reply, "The board — "
"Have you resigned?"
"No, I have not."
"All right. Have you returned one nickel of the millions of dollars
that you were paid while this scam was going on?"
"Well, first of all," Stumpf blustered, "this was by 1% of our people,
and— and — "
"That's not my question," Warren interrupted. "My question is about
responsibility. Have you returned one nickel of the millions of
dollars that you were
paid while this scam was going on?"
"The board will take care of that."
"Have you returned one nickel of the money you earned while this scam
was going on?"
"The board will — "
"I will take that as a 'no,' then."
Warren further probed whether Stumpf had fired a single senior
executive over the scam. The answer was no.
"OK. So you haven't resigned, you haven't returned a single nickel of
your personal earnings, you haven't fired a single senior executive.
Instead, your
definition of accountable is to push the blame to your low-level
employees who don't have the money for a fancy PR firm to defend
themselves. It's gutless
leadership."
She concluded her questioning with the bluntest assessment of the day:
"You should resign. You should give back the money that you took while
this scam
was going on, and you should be criminally investigated by both the
Department of Justice and the Securities and Exchange Commission."
As Warren and other committee members on both sides of the aisle
pointed out, Wells Fargo didn't seem to take serious steps to rectify
the damage done
to customers,
first revealed in 2013 by The Times,
until it started to face pressure from regulators. Stumpf touted the
bank's decision to hire consultants at PricewaterhouseCoopers to help
determine the
scope of the problem — but that happened in August 2015, years after
it knew a problem existed.
Under Brown's questioning, Stumpf revealed that it took that step not
on its own, but "in consultation" with federal regulators and the L.A.
City Attorney's
office, which was investigating. In other words, Wells Fargo had to be
goaded into seeking outside help.
"It never occurred to you to bring in somebody?" Brown asked.
"It was early in 2015," Stumpf replied, "that we finally connected a dot."
Nor has the bank ever disclosed in its public filings to the SEC that
its activities were under investigation. Stumpf explained that it
considered the
problem immaterial. In strictly financial terms, that may be true: The
bank collects revenue of about $90 billion a year and profits of more
than $20 billion.
But the damage to its reputation and future profitability may be
enormous; treating this as "immaterial" and sweeping it under the rug
was clearly a bad
and dishonest call. But Wells Fargo still wishes to trivialize the
matter. "I disagree with the fact that this is a massive fraud,"
Stumpf said.
The questions from Senate Banking Committee members that Stumpf
refused to answer directly may have outnumbered those to which he did
offer a response.
Asked whether he thought fraud had been committed, he pleaded that he
is not a lawyer. He was vague about when he first learned of his
bankers' "unethical"
conduct, although he met weekly with Carrie Tolstedt, the much-lauded
executive who led the division where the conduct occurred.
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