America’s Diagnosis: Crippling Corruption
America, we have been the victims of a crippling illness. We have seen the symptoms unfold, slowly, painfully, and yet, seemingly inevitably. After the financial collapse of 2008, we thought that we would deal a parting shot to the terrors of corruption. We thought that “Hope” and “Change” would bring big banks to their knees and the corporate corruption and greed that destroyed the financial stability of millions of Americans to its death bed. We thought that the virus had gone dormant, that it was in safe remission. We were wrong.
Wells Fargo CEO, John Stumpf, has brought corporate corruption back to the front pages of our newspaper. He is not however, the root of our illness. Nor will he be the last case of corporate greed and abuse of power; of that we can be certain. That said, this latest scandal has reaffirmed America’s mistrust in our financial system.
An ABC News report found that the incentive-based program Wells Fargo uses to “distinguish itself in the marketplace” led directly to this scandal. To reach unrealistic sales goals forced on them, company employees opened millions of accounts and credit cards in their clients names without their consultation or permission. Senator Richard Shelby (R-AL), who has ironically spoken out against consumer financial protections in the past, said last Tuesday, “Wells Fargo customers were surprised to get debit cards in the mail, rack up fees on accounts that they didn’t know existed, get calls from collection agencies over unpaid fees and see their credit ratings plummet.”
Now Sen. Elizabeth Warren (D-MA) has joined the outcry of the American public, denouncing Stumpf and calling for his resignation. It is only natural that such a despicable example of avarice should be fired. However, the irony of the situation is that Stumpf cannot lose. In a gross demonstration of corporate greed and power, even if he resigns, Stumpf would receive a $195 million severance bonus. To put that in comparison, Wells Fargo would pay Stumpf more for his malicious actions than they have paid in penalties to the government. Along those same lines, another high-level executive directly in charge of this immoral program walked away with a $100 million bonus recently.
In no reasonable society should a man be rewarded hundreds of millions of dollars for cheating thousands of working class families out of their hard earned paychecks.
In no reasonable society should a man be rewarded hundreds of millions of dollars for cheating thousands of working class families out of their hard earned paychecks. In no thinking society should we have forgotten to be vaccinated against such terrifying acts of abuse of power. And yet, this terminal illness remains, as malignant and as crippling as ever.
American Capitalism relies on trust. Trust that we as consumers want reciprocated in every aspect of our interactions with capital. Institutions like Wells Fargo whose power and influence eclipse their moral obligation to the consumer continue to plague our nation. They ought to be reined in, to brought to task and to account for their actions. Instead, Wells Fargo was fined a mere $185 million. A May 2016 Forbes report found that Wells Fargo was worth $1.849 billion in assets and makes an annual revenue of $91 billion. In other words, the amount this company, one that has committed a previously unthinkable breach of trust and conduct, will be fined, is less money than it makes in 18 hours. Chump change and a slap on the wrist. The federal regulators who agreed to a $185 million fine should have pushed much harder and made an example of Wells Fargo. They ought to have sent out a strong message that the American public will not stand for these injustices. Instead, they were content to let Wells Fargo off after almost no punishment. If we cannot hold big banks accountable, they will never cease to abuse their power. The officials who chose not to punish Wells Fargo to the appropriate extent enable corporate greed to create more scandals in the future.
However, despite everything infuriating about this case, somehow it gets worse. A new CNN Money report found that employees who called the company’s ethics hotline to protest the breaches of trust and unethical practices were fired in retaliation. A former human resources official said that, “Wells Fargo would find ways to fire employees ‘in retaliation for shining light.’” Methods included firing employees for ‘tardiness’ if they showed up just seconds late to work. This same report, corroborated by other sources, spoke to nearly a dozen employees who were fired for whistleblowing or witnessed co-workers fired for speaking out. Of course, this is illegal, as noted by Harvey Pitt, former SEC chairman. It is unclear whether or not Wells Fargo will face any punishment for this criminal activity either, but given the extremely light sentence handed down to the criminal corporation for its other crimes, we can expect no harsh example made out of this company. What a sorry state we are now in, subject to the whims and impulses of predatory businessmen with a strong deficiency in morals. Wells Fargo once again has shown us that it, and other big banks and corporations like it, should never be granted - and certainly don’t deserve - our trust.