I’m feeling pretty blue right now, as this is a difficult letter to write.
You see, I’m going to have to end our eight-year relationship as I no longer believe that I can trust you.
While I’m not one of the millions who had fraudulent accounts opened in their name by your minions at Wells Fargo, I can’t condone or accept the practices you and your senior management seemed all too eager to promote.
C.S. Lewis is quoted as saying: “Integrity is doing the right thing, even when no one is watching.” It seems that you’ve been doing the wrong thing, and just hoped you wouldn’t be seen and get caught.
So much for your integrity. And Wells Fargo’s.
In one Senate hearing, Sen. Elizabeth Warren, D-Mass., said that you made millions of dollars in the “scam,” telling you, “You should resign … and you should be criminally investigated.” “It’s gutless leadership,” she said, noting that you are not resigning, willingly returning any of your earnings or firing any senior executives. “Wells Fargo wasn’t cross-selling. Failing to notify these customers about these sham accounts, this isn’t cross-selling, this is fraud,” Senator Pat Toomey (R-Pennsylvania) said.
To add to fuel to the fire, on September 29th, Rep. Carolyn Maloney (D-NY) accused you of using insider information about the phony accounts to cash in $13 million worth of your own shares before knowledge of the fraudulent activity became public. Maloney said the timing of that trade raised questions of whether you put yourself ahead of customers who had been defrauded, and ahead of the bank in general. Of course, you denied that you had done anything wrong. You said he sold stock with proper approvals and claimed the sales were made “with no view about what was going on.”
Yeah, right. Forgive me if I find it difficult to believe you.
Sadly, John, there appear to be even more deceitful practices coming to light. The U.S. Labor Department is investigating possible abuses of employees by Wells Fargo in connection with the scandal. What’s even more disturbing to me, as veteran, is that Wells Fargo is now facing a Justice Department sanction over improperly repossessing cars owned by members of the military.
John Chiang, Treasurer for the state of California expressed my own feelings when he wrote in a letter to you and the bank’s board members, saying: “How can I continue to entrust the public’s money to an organization which has shown such little regard for the legions of Californians who placed their financial well-being in its care?” Chiang then suspended many of its ties with your Wells Fargo for at least a year. Included in the suspension are its most highly profitable business relationships with the state. These cover the lucrative business of underwriting certain California municipal bonds, investments in Wells Fargo securities, and the bank’s broker-dealer work to purchase investments on the treasurer’s behalf.
That’ll hurt a bit. As it should.
Warren Buffett has said that: “It takes 20 years to build a reputation and five minutes to ruin it.” You’ve done a good job of it, John. Your focus on short term success will probably have a long-term price. Of course, I should mention that I’m also upset with Warren. He’s been notably silent on this issue. Maybe it’s because he’s a big investor in Wells Fargo. Or perhaps he really does not believe in one of his oft-quoted statements about hiring based on integrity.
Sigh. So I’m a bit sad, and unhappy.
You and the Wells Fargo team are probably hoping to weather this storm with little damage. You’ll take whatever medicine you’re given and move on. And the recently announced “clawback” of $41 million in company stock won’t hurt you too much personally. After all, your retirement payout is pegged at $134 million. Glad to see that you’ve taken care of yourself, John. It helps explain in part why you pay your D.C. lobbyists millions to educate our politicians on how banking should be done. Your way.
Well, I get that. So I’m going to do the only thing I can do.
I’ll be ending our relationship. I’m moving on to a credit union, where I can place my trust as a member/owner. I can also expect to be treated with a little more respect. It’s a small thing. And it won’t make a blip on your profit/loss radar. But for me, it’s about putting my money into an organization I can trust to do the right thing. And that’s not Wells Fargo.
P.S. to readers. From a marketing standpoint, Wells Fargo has made a mockery of the fiduciary vision and values it has long embraced. As a result, it’s alienated many and will (hopefully) pay a hefty price for its failures. This should be a reminder to anyone in business that operating with integrity, honesty, and transparency should be your ultimate goal.