That did not take long. Just hours after a CNN report suggested that Wells Fargo was retaliating, and firing, company whistleblowers who had spoken out against the company’s illegal “account creation” practices (while blaming them of being “tardy”), moments ago Reuters reported that Senators have asked the Labor Department to investigate Wells Fargo for potential violations of Fair Labor Standards Act.
To be sure, now would be a perfect time for Wells Fargo’s biggest shareholder, Warren Buffett – who owns a 10% stake in WFC – to speak up in defense of his favorite US bank, alas that won’t happen. As Fox Business reported overnight, Warren Buffett said it’ll be more than a month before he publicly discusses the bank’s phantom-account scandal. Why? He doesn’t want it becoming an “election issue.”
“If I start commenting on that or anything else, it will lead down too many paths so I will wait until November to speak about it, the election or any other subject,” Buffett told the Fox Business Network, according to an article on its website.
If history is any guide, Buffett can’t be thrilled about the ethics lapse. 25 years ago this month, Buffett testified before a Congressional sub-committee regarding the Salomon Brothers bond scandal. Buffett had become a major shareholder in Salomon when it was revealed that traders had been submitting false Treasury bond bids in order to skirt trading rules.
Buffett swiftly took over as CEO and fired a number of management. At the time, he said during the testimony, “Lose money for my firm and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.”
In retrospect, there appears to have been a footnote there.
As Bloomberg notes, Buffett’s silence on Wells Fargo contrasts with his support of executives including Goldman Sachs CEO Lloyd Blankfein and JPMorgan’s Jamie Dimon when their companies drew regulatory scrutiny.
The main reason Buffett has entered a media quiet zone is that he is vocally backing the presidential candidacy of Hillary Clinton, a Democrat who wrote in a letter to the bank’s customers that she was “deeply disturbed” by Wells Fargo’s conduct. As such the conflict of interest between Buffett’s massive investment, and Hillary’s “concern” about Wells’ practices, not to mention hypocrisy by her wealthiest backer, would provide the media, or at least a small part of it, with hours of enjoyable questioning.
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