A bitterly divided Congress adjourned Thursday for the election.
But not before the House Financial Services Committee teed off on Wells Fargo CEO John Stumpf.
Not that Stumpf didn’t have it coming, but the Thursday appearance was seemingly more about wrong time, wrong time for Mr. Stumpf.
That time is election season. Ten days earlier, he was completely roasted by Sen. Elizabeth Warren, D-Mass., in a must-see TV session on the Senate side.
Naturally, the 60 House members assigned to the Finance Committee wanted their shot at the beleaguered CEO. Members piled on one after another in a rare bipartisan display akin to Kim Kardashian shopping at Kmart.
At times, it seemed lawmakers were battling one another for that signature line that would propel them into the national spotlight.
First the background: Wells Fargo is in hot water after a consulting firm found that bank employees created more than 2 million phony accounts without customers’ knowledge. The bank then boosted profits by charging fees and penalties on many of those accounts.
Wells Fargo said it has fired 5,300 employees and the Consumer Finance Protection Bureau fined the bank $185 million for the scam.
Stumpf came under fire after Warren revealed his $20 million 2015 salary while the fraud was happening. The CEO sought to reverse negative headlines by donating much of his 2016 salary -- $41 million.
Still, that gesture did little to dampen the fire of the committee. I have watched the video and compiled the best of the best for you. Enjoy:
• Rep. Carolyn B. Maloney, D-N.Y.: “On Oct. 30, 2013, you sold $13 million worth of Wells Fargo stock on the open market. That is by far the largest open-market sale of Wells Fargo stock that you made in your nine years as CEO.
“Did you dump $13 million dollars of Wells Fargo stock, which you did through your family trust, right after you found out that your bank had been fraudulently opening hundreds of thousands of scam accounts, ripping off your customers?”
Stumpf: “First of all, the vast majority of our people go to work every day—"
Maloney: “Excuse me, that was not my question. Excuse me, excuse me…”
Stumpf: “I sold those shares and I sold them with proper approvals and I sold them with no view on sales practices or anything else.”
Maloney: "Well, it seems very, very suspicious that your largest sale was right after your $1.8 trillion bank was turned into a school for scoundrels."
• Rep. Scott Garrett, R-N.J.: “Yes, I know that you just lost, reportedly I hear, $41 million of your salary and if I understand it correctly, that’s only a quarter of your pay over the last decade or so. So you’ll forgive all of us if we’re not really that sorry.”
• Rep. Brad Sherman, D-Calif.: “You fired 5,300 people. You took 5,300 good Americans and turned them into felons with a system that you created, benefited from and drove your stock price up by bragging about your level of new accounts.”
Stumpf: “Congressman, I have to disagree with that.”
Sherman: “I’m not surprised.”
• Rep. Gregory Meeks, D-N.Y.: "I have a chart here that shows you've been penalized almost systematically, every year since you have been in charge," Meeks said, pointing out that Stumpf become CEO since 2007 and added chairman duties in 2010.
Stumpf: “(I serve) at the pleasure of the board."
Meeks: "Then the whole board needs to go.”
• Chairman Jeb Hensarling, R-Texas: “Today’s hearing is just the beginning of our investigation. It is not the end.”
To be continued…
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at email@example.com.
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