Just when you thought Big Banker greed surely bottomed out with 2008’s Wall Street crash and bailout, along comes Wells Fargo, burrowing even deeper into the ethical slime to reach a previously unimaginable level of corporate depravity.
It’s one thing for these giants of finance to cook the books or defraud investors, but top executives of Wells Fargo have been profiteering for years by forcing their employees to rob the bank’s customers. Rather than a culture of service, executives have pushed a high-pressure “sales culture” at least since 2009, demanding that front-line employees meet extreme quotas of selling myriad unnecessary bank products to common depositors who just want a simple checking account. Employees were expected to load each customer with at least eight accounts, and employees were monitored constantly on meeting their quotas—fail and they’d be fired.
That’s why the bosses’ sales culture turned employees into a syndicate of bank robbers. The thievery was systemic, and it was not subtle: Half a million customers were secretly issued credit cards they didn’t request; fake email accounts for online services were set up without customers’ knowledge; debit cards were issued and activated without telling customers; depositors’ money was moved from one account to another; signatures were forged—and of course, Wells Fargo collected fees for all of these bogus transactions, boosting its profits.
This is not a case of a few bankers gone rogue, but of a whole bank gone rogue, rotting from the head down. Some stories of corporate villainy make me throw up my hands in astonishment. But this one is so putrid it makes me want to throw up.
The still-evolving saga of Wells Fargo systematically stealing from its small depositors is a gag-inducing story of executive-suite greed. Start at the very top, with CEO John Stumpf, who claimed at a recent Senate hearing on the scandal to be shocked and “deeply sorry” that thousands of his employees had been opening bogus accounts in the names of non-English speaking and elderly customers.
The silver-haired bank chief assured senators that he and other top bosses knew nothing about this mass breach of the bank’s code of ethics, blaming low-level employees and firing 5,300 of them. But John, John, John: First, weren’t you the one squeezing those employees relentlessly to push customers into multiple accounts?
Second, how could you possibly not notice a huge crime spree that rampaged throughout your bank’s branches for seven years?
Third, what about all those calls that honest employees made to your “ethics hotline” taking place every day?
And fourth, while you now cravenly blame your $12-an-hour employees for this bank-run mugging operation, it turns out you read about it in a 2013 expose by the Los Angeles Times. Why didn’t you stop it then?
Stumpf didn’t act because he was busy stuffing his own pockets with the loot, hauling off more than $100 million in personal pay in the last four years alone. What a deal: Workers are pressured to rob customers, then they get fired, while the boss of the caper grabs a fortune and protects all the higher-ups—and he expects to get away with it all by making a non-apology to some senators.
But the chief is not the only one who should be held accountable at Wells Fargo. Where were its board members, who are empowered and duty-bound to set, monitor and assure ethical corporate behavior from the top down? For seven years, this 15-member board of governance sat idle, apparently incurious about their corporation’s flagrant, widespread thievery, even after the report by the LA Times exposed it. Far from investigating and clamping down, the board kept shoving multimillion-dollar bonuses at Stumpf and other top executives. This is a powerhouse board, made up of top executives from other corporations, former government financial officials and big-time academics. And they are extremely well-paid to be diligent, getting up to $400,000 a year to keep Wells Fargo honest.
What’s at work here is the ethical rot that now consumes America’s entire corporate system—a system that steals from the many to further enrich the few, buying off the integrity and vigilance of those who run it. Excuse me, but I have to go throw up now.