Ten days after he was grilled in the Senate for two hours, today John Stumpf had to go through twice the grandstanding in yet another kangaroo court, this time for four intense hours in the House, where among other things, he had to suffer the following Maxinewaterism: “I‘m going to move forward to break up Wells Fargo“.
It doesn’t work that way.
And while we agree that Stumpf should resign, and certainly be investigated for potential criminal activity, there are appropriate channels for that – what happened today was a circus, in which many populism-pandering poseurs, many of whom have received generous donations from Wells Fargo, achieved nothing, but yelled a lot while doing it and of course, smiling for the camera.
Still, we admit that there were some legitimate questions asked.
As the following series of clips show, in a string of intense and hostile questioning on Thursday, lawmakers understandably denounced the practice of creating unauthorized accounts in the names of real customers, while providing little explanation why Dodd-Frank – the law they created after the financial crisis to prevent precisely this kind of behavior – never managed to catch any of the offensive, criminal practices. Numerous lawmakers also called for Mr. Stumpf’s resignation.
Some examples, courtesy of the NYT:
Rep. Jeb Hensarling asked who was the highest ranking executive at Wells to
be dismissed. “There were managers and managers and managers of a manager,” said Mr. Stumpf. He later said the highest ranking employees to be dismissed were branch managers. No one at the bank holding company was fired.
Brad Sherman asked if Wells Fargo would hold customer suits “to these forced arbitration clauses and screw them again out of their day in court?” “I believe in arbitration,” Mr. Stumpf replied.
In the next clip, Stumpf defends Wells Fargo’s board, answering Randy Neugebauer that “I’m not for Congress setting the corporate structure,” after being forced to defend his sual dual role as CEO and Chairman.
In one notable exchange, Rep. Carolyn Maloney asked Stumpf if he dumped $13 million in stock in his family trust “after you found out about the fraudulent accounts,” adding that “the timing is very, very suspicious.” “I sold those shares and I sold them with proper approvals,” said Mr. Stumpf, “With no view about anything that was going on with sales practices or anything else.”
Maloney had a follow up question, asking if as part of its business review the bank would go further back beyond 2009 as there was evidence of illegal sales practices going back all the way to 2007. “We have evidence of illegal sales practices going back to 2007,” said Rep. Maloney. “Will you agree to extend the review period?” “Again, Congresswoman, we’re going to go back to 2009,” Mr. Stumpf said.
In another exchange, Rep. Scott Garrett asked the CEO why the bank never revealed any of the ongoing discoveries about the bank’s fraudulent practices as material public information. “Are you saying that all those quarterly reports that you were following,” asked Representative Scott Garret, a Republican of New Jersey, “None of that information was material?” “At the time, through the facts and circumstances, we filed accurate reports and we did not believe it was material,” Stumpf said.
One of the most fiery exchange took place, as usually happens, with Rep Sean Duffy, who got Stumpf to admit that Wells stole from customers: “Was this fraud? Was this just a H.R. problem, was this theft? Did you steal? I want to know if you and I are on the same page. Did Wells Fargo employees steal from a million to 2 million other customers, yes or no?”
“In some cases they did,” said Mr. Stumpf.
A rather comic back and forth took place with Rep Mike Capuano who asked Stumpf “Why shouldn’t you be in jail?” when questioning the difference between Wells Fargo’s C.E.O. and someone who robbed his bank. “There is no question that we had done things that we need to improve on and we’ve paid fines and we’re trying to get better,” said Mr. Stumpf.
Last but certainly not least, here is Rep. Greg Meeks with what may have been the piece de resistance, a 5 minute screaming match like not other, in which virtually every possible topic was covere, anywhere between 95dB and 110dB.
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