Trump and Stumpf
So farewell hope, and with hope farewell fear,
Farewell remorse; all good to me is lost;
Evil, be thou my good.
John Milton, Paradise Lost
Wells Fargo is a metaphor for the Donald Trump campaign. The difference is that it is easier to effect a claw back in the Wells Fargo case than in the case of Donald Trump. In the Wells Fargo case, the need for a claw back is a disappointment. In the case of Donald Trump, it will be a disaster.
Wells Fargo was more happily in the news in June 2015, when it was announced that the Billy Graham Evangelistic Association was taking all its accounts away from the bank because the bank was running ads featuring same sex couples who use the services of Wells Fargo. Franklin Graham, Billy’s son, urged his followers to boycott the bank saying they “should speak out as Christians” in protest of the bank’s advertising practices. The bank was unmoved. That was the Wells Fargo that showed how a bank could take a stand on matters of principle irrespective of its effect on business. Its Donald Trump moment is more distressing.
September 2016 brought news that Wells Fargo employees had been pressured by their superiors to open unauthorized deposit and credit card accounts for existing customers. The more accounts they opened, the greater their bonuses. The fact that the customers neither requested nor knew of the benefits that bonus hungry employees were bestowing on them was of no consequence. The important thing was to open the accounts. Employees were expected to open three to four new accounts each day and the easiest way to do that was to open accounts for customers who already had accounts since the employees had all the information about the customers that they needed in order to open the accounts. September 8 it was disclosed that the bank was paying $185 million in fines and penalties because of that practice. There may have been more than 2 million deposit and credit card accounts created without the knowledge of the beneficiaries of the practice.
The director of the Consumer Financial Protection Bureau said that the fine is the largest fine ever imposed by the Bureau. The bank has thus far fired 5,300 low level employees for engaging in the practice and more firings of low level employees may be in the offing. No senior employees have been punished. John Stumpf is CEO. The only adverse effect he has suffered as a result of the malfeasance of his bank, is being grilled by members of the Senate Finance Committee. Another person who suffered no adverse consequences as a result of the activity is Carrie Tolstedt.
Ms. Tolstedt is the divisional senior vice president for community banking and it was she who supervised the 6,000 branch banks where the fictitious accounts were being created. Although Mr. Stumpf knew about the fictitious accounts created under the watchful eye of Ms. Tolstedt, he described her as a “role model for responsible leadership” and “a standard-bearer of our culture.” She may be all those things and the proof would be found in the retirement package she will receive when she retires at the end of the year. In addition to $23 million in compensation that was paid to her during the last three years of her employment, she will leave with benefits that could be worth as much as $125 million. According to Bloomberg News, however, the company might be able to claw back $17 million in unvested shares owned by Carrie if the board of directors believes that to be appropriate. And therein the difference between Wells Fargo and Donald Trump.
Just as Wells Fargo employees were earning money by creating fictitious accounts for customers, Mr. Trump is gathering votes by creating a fictitious narrative about the world, the country in which we live, and the qualities of his opponent. His campaign is built on lies he is able to tell with a straight face and not the least bit of embarrassment when caught out. He has lied for so much of his life, that he himself may often not recall what truth is. His lies range from the birthplace of President Obama, his supposed opposition to the Iraq war from its inception, and his assertion that there are 30 million undocumented immigrants living in the United States. For the week beginning September 9, a website that is fact checking Trump’s statements found 38 lies and described the week as being perhaps “Donald Trump’s greatest week of lies yet.”
Here is the difference between Wells Fargo’s victims and the American people. Wells will hold defrauded customers harmless and its board of directors can decide to claw back some of the compensation paid to Mr. Stumpf, Ms. Tolstedt and other high level employees who should have stopped the practice. It could even decide to fire responsible executives. Should Donald Trump win the presidency as a result of his fraudulent campaign, there is no way the American people will be held harmless. If they suffer voters’ remorse, they will be unable to claw back their votes. They will have to wait four years to fire him. That’s too bad.