New congresswomen grill bank CEO on funding racism and pollution
The new class of Democrats in Congress is bringing accountability back.
Several newly elected Democratic congresswomen held Wells Fargo CEO Timothy Sloan’s feet to the fire on Tuesday with tough questions about the bank’s ethically dubious business practices — from its role in major bank scandals, to its financing of harmful private prisons and polluting oil pipelines.
It was the latest proof of what a difference an election can make. While House Republicans routinely ignored corruption of all kinds, Democrats — especially the rising stars in its historically diverse freshman class — are facing it head-on.
During a House Financial Services Committee hearing, Rep. Alexandria Ocasio-Cortez (D-NY) grilled Sloan about why Wells Fargo — the fourth largest bank in the world, worth over $308 billion — chose to finance “human rights abuses and environmental disasters.”
“Why was the bank involved in the caging of children?” Ocasio-Cortez asked.
After Sloan denied this, Ocasio-Cortez noted that the company invested in CoreCivic and GEO Group, two of the firms involved in constructing and running immigration detention centers — where children were caged and abused as a result of Trump’s decision to harshly prosecute border crossers.
“These companies run private detention facilities run by ICE, which is involved in caging children,” Ocasio-Cortez told Sloan.
Ocasio-Cortez then quizzed Sloan on the environmentally unsound Dakota Access Pipeline, which Trump allowed to be constructed. Over the last two years, there have been multiple fuel spills along the pipeline.
Sloan said that the company was not responsible for the spills.
“Why did Wells Fargo finance this pipeline when it was widely seen to be environmentally unstable?” Ocasio-Cortez asked.
Sloan said that the company did so after doing an analysis of the environmental effect — and went ahead, because “we concluded that it was a risk that we are willing to take.”
Sloan’s answer to Ocasio-Cortez’s pointed question suggested that the company pursued profits despite the risk of environmental harms.
Other freshman Democratic congresswomen asked Sloan to justify the company’s ethically dubious business practices and its attempts to cover them up.
In 2016, reporters uncovered that Wells Fargo was opening up accounts for customers without their permission as part of a strategy to drum up business. Despite this, Republicans in the House did not subject the company’s management to questioning (the Senate did hold a hearing).
In a 2017 statement to investors, Sloan said the company would be working to restore trust after the scandals — but that letter was later described as “corporate puffery” by the company’s own attorneys as part of their defense in court.
Rep. Katie Porter (D-CA) took Sloan to task for this disparity, and asked him to explain why the lawyers said what they did.
“I don’t know why our lawyers are arguing that,” Sloan answered.
Incredulous, Porter replied, “You are a personally named defendant in the case. Are you lying to a federal judge or are you lying to me and this Congress right now about whether we can rely on those statements?”
“I can’t wrap my head around why and how every single subsidiary of Wells Fargo was engaging in some kind of fraudulent activity if it wasn’t coming from the top,” said Rep. Jennifer Wexton (D-VA).
Rep. Ayanna Pressley (D-MA) highlighted the role that Wells Fargo plays in financing gun violence.
“Wells provided $40 million worth of lines of credit to Sturm Ruger and Company,” Pressley said, adding that the company is “one of the largest firearms manufacturers in the country, and their products have been used in the last nine mass shootings.”
Rep. Rashida Tlaib (D-MI) pointed out to Sloan that a loan officer at his company “said they were likely to charge — and this is intentional — a higher rate to borrowers with Mexican names.”
“Was that some sort of internal memo that was going around?” Tlaib asked.
“None of that’s true,” Sloan replied.
“But the data is there,” Tlaib pressed.
The company is currently being sued for discriminatory banking practices.
The House Financial Services Committee is chaired by Rep. Maxine Waters (D-CA). The longtime congresswoman also took Sloan to task.
“On and on and on,” Waters told Sloan at the beginning of the hearing, “You have not been able to keep Walls Fargo out of trouble. You keep getting fined. Why should Wells Fargo continue to be the size that it is?”
Wells Fargo and other companies who abused and deceived their customers and the country got a pass from Republicans in Congress who just wouldn’t do their jobs. Now, under Democratic leadership and led by the rising stars of the party, corporate power is being held accountable.
And there is more to come.
Published with permission of The American Independent Foundation.
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