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Activists call on city to divest from Wells Fargo

LOS ANGELES — A group of activists that included Robert F. Kennedy Jr. gathered outside City Hall Dec. 11 to voice support for the Los Angeles City Council as it considers steps that could divest its funds from Wells Fargo over the bank’s fake accounts scandal and support of the Dakota Access Pipeline.

A set of new rules for banks that want to do business with Los Angeles is scheduled to be voted on by the council Dec. 13 and would make it harder for Wells Fargo to continue to be the city’s main banking partner.

“I’m just here to thank the City Council for this vote,” Kennedy told City News Service before he spoke to the crowd of about 75 activists and assembled media. “Right now all over the country we’re watching government agencies and governments in the possession of the oil industry. And it’s refreshing to see a government that stands up to the oil industry on behalf of the people.”

Kennedy is an environmental lawyer, author, activist, media personality and the son of former Attorney General and U.S. Sen. Robert F. Kennedy, who was assassinated in Los Angeles in 1968 as he was running for president.

“[Oil companies] may be able to corrupt our federal government, they may be able to corrupt our state government, but they are not going to be able to corrupt the city of Los Angeles,” Kennedy told the crowd.

The new rules under consideration would add a “social responsibility” score that will be weighed heavily when the city considers proposals from banks. The score would include things like a bank’s Community Reinvestment Act score, which tracks its level of lending, investments and services in low- and moderate-income neighborhoods.

Wells Fargo’s score took a significant hit due to the fake accounts scandal.

The city does the majority of its banking with Wells Fargo through roughly 800 different accounts.

Under the new rules, the first phase of a banking bid would focus on its financial and organizational capacity while giving it a total score up to 100. The second phase of scoring would include a possible 30 points for its social responsibility score on top of the first phase score, for a total possible score of 130.

“Currently Wells Fargo is the bank that does the banking with the city of Los Angeles, and we don’t want that to be the case anymore,” said Madeline Merritt, an actress and activist with Divest L.A., a group that has held several rallies at City Hall while calling for leaders to divest the city’s fund from Wells Fargo over the Dakota Access Pipeline. “We want another bank. We want a better solution.”

One of the motions that led to the potential new rules was introduced by Councilmen Mitch O’Farrell and Paul Koretz and directed city staff on options for Los Angeles divesting its funds from Wells Fargo while outlining criteria and standards the city would have in any future agreements with banks.

The motion cites the bank’s support of the Dakota Access Pipeline as a reason for the possible divestment, as well as a lawsuit the city settled with Wells Fargo last year after some of the bank’s employees created more than 3.4 million unauthorized accounts as a way to meet aggressive sales goals set by management. The bank paid $50 million in civil penalties to the city of Los Angeles and $135 million to two federal agencies, and was ordered to provide restitution to affected customers.

The motion states that the city “has historically upheld strong principles protective of the environment and the health and welfare of its residents. Wells Fargo’s support of the Dakota Access Pipeline Project is at odds with these principles.”

The oil pipeline that runs more than 1,100 miles from North Dakota to Illinois sparked a months-long protest near the Standing Rock Sioux Reservation. Members of the tribe opposed the project because they said it passed over a sacred burial ground and would threaten their water source.

Pipeline construction was halted in November 2016 by the Army Corps of Engineers, but President Donald Trump signed an executive order in January instructing the agency to finish the project. Oil has been flowing through the pipeline since March.

Wells Fargo executives said in a February statement that Wells Fargo is not the lead bank on the project but merely one of 17 financial institutions that made a loan to the developers of the pipeline. The company said it lent $120 million to the project.

 

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