posted at 4:01 pm on September 21, 2016 by Ed Morrissey
Almost two weeks ago, Wells Fargo fired two percent of its global workforce after the exposure of massive fraud in its sales organization. More than 5,300 employees got the axe for opening over 2.2 million fraudulent accounts, some of which used actual customer information and which penalized those customers with fees and fines. The financial giant insisted that, despite the size of the fraud and the five years in which it flourished, upper management knew nothing about it — even though their bonuses depended on those sales figures.
Now, former employees tell CNN Money that executives should have known about it, because they tried to blow the whistle on the scam using the system executives set up. Those who called the ethics hotline about it ended up fired as a result, they allege:
Now CNNMoney is hearing from former Wells Fargo workers around the country who tried to put a stop to these illegal tactics. Almost half a dozen workers who spoke with us say they paid dearly for trying to do the right thing: they were fired.
“They ruined my life,” Bill Bado, a former Wells Fargo banker in Pennsylvania, told CNNMoney.
Bado not only refused orders to open phony bank and credit accounts. The New Jersey man called an ethics hotline and sent an email to human resources in September 2013, flagging unethical sales activities he was being instructed to do.
Eight days after that email, a copy of which CNNMoney obtained, Bado was terminated. The stated reason? Tardiness.
That was no accident, according to an unnamed Wells Fargo HR source:
One former Wells Fargo human resources official even said the bank had a method in place to retaliate against tipsters. He said that Wells Fargo would find ways to fire employees “in retaliation for shining light” on sales issues. It could be as simple as monitoring the employee to find a fault, like showing up a few minutes late on several occasions.
“If this person was supposed to be at the branch at 8:30 a.m. and they showed up at 8:32 a.m, they would fire them,” the former human resources official told CNNMoney, on the condition he remain anonymous out of fear for his career.
Ironically, Wells Fargo CEO John Stumpf insisted during his Congressional appearance that the culture was changing at his organization … and encouraged employees to use the ethics hotline to ensure it. “We want to hear from them,” Stumpf insisted to the Senate Finance Committee panel. D’oh!
This reinforces a key question about Wells Fargo’s initial explanation, a story to which Stumpf clung yesterday:
Wells Fargo CEO John Stumpf apologized to customers for more than 2 million fake accounts opened in their names, but denied any orchestrated fraud by bank management. …
“I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team members, and to the American public,” he said in his prepared remarks.
“I do want to make very clear that there was no orchestrated effort, or scheme as some have called it, by the company,” he said.
The question is this: How do 5300 employees commit fraud without managers and executives knowing it? That’s two percent of Wells Fargo’s global workforce, as noted above, which means it was hardly a random phenomenon. If CNN Money’s sources are telling the truth, then the answer’s clear: the corporate structure knew something was going on, and executives made sure to make it look as though they didn’t. The kind of retaliation described here would have to involve the corporate chain of command. Ethics lines don’t get answered in the branches, after all, and that means that coordinating this kind of retaliation would have to take place in the corporate structure.
Yesterday, Sen. Elizabeth Warren told Stumpf that he should resign his position, and that’s apparently not just a partisan position. Fellow Senate Finance panelist and Democrat Jon Tester told Stumpf, “You have done something I’ve never seen in 10 years: You have united this committee — and not in a good way.” The bipartisan effort to force Stumpf to testify may result in pressure to indict senior executives at the financial giant for fraud, and the Department of Justice has already begun to issue subpoenas, CNN reports.
As long as Stumpf remains, it’s not going to do much for the bank’s public relations, at the least.