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Darrell Whitman Statement On Wells Fargo Bank
Federal OHSA WPP Investigator Darrell Whitman Statement On Wells Fargo Bank
JAIL THE BANKERS, FIRE THE REGULATORS, NATIONALIZE THE BIG BANKS!
Statement Regarding Wells Fargo
My name is Darrell Whitman. Beginning in July 2010, I worked as an investigator for OSHA’s Whistleblower Protection Program. OSHA’s Whistleblower Protection Program is the nation’s principle gatekeeper for screening reports of risks to the nation’s safety, health, and financial security. When OSHA investigates and finds “a reason to believe” laws have been broken, it is required to provide the results of its investigation to the Securities and Exchange Commission – SEC, which as the primary bank regulator should then take further action to stop the illegal activity.
I recently have been in conversations with national journalists discussing concerning the scandal regarding Wells Fargo’s massive fraud in the management of its’ customer’s accounts. This is what I know and what I have learned.
1. In 2007, an employee of Wells Fargo reported to the OSHA Wells Fargo was engaging in fraud by creating phony customer accounts and falsely billing customers for services they did not request and costs they did not authorize. OSHA investigated and found a reason to believe fraud was occurring. Whether or not OSHA reported the results of its investigation to the SEC, the SEC didn’t take any action to stop the fraud.
2. In November 2010, as a new OSHA whistleblower investigator, I was directed to close two complaints by Wells Fargo employees without conducting an investigation. OSHA never interviewed the employees, and closed the complaints even though Wells Fargo failed to defend the allegations. The two complaints mirrored the fraud reported earlier in 2007, and closing the complaints meant that OSHA would not report these cases to the SEC.
However, before closing the cases, OSHA provided copies of the complaints to Wells Fargo senior attorney in Los Angeles, showing that once again Wells Fargo senior management was informed about the ongoing customer accounts fraud.
3. In January 2012, I was assigned a third case brought against Wells Fargo that duplicated the reports of the first two cases. The case was quickly transferred to another investigator, and then a third investigator, and as of today – almost five years later, OSHA has failed to do any investigation, including failing to interview the employee.
4. Between 2010 and 2015, OSHA received at least two, and probably many more, complaints from Wells Fargo employees about fraudulent customer account practices. Like the three cases I handled, OSHA never conducted proper investigations, or made reports to the SEC.
5. In early September, the Consumer Financial Protection Bureau fined Wells Fargo $185 after it determined that Wells Fargo had engaged in fraud as reported to OSHA. This was in addition to a fine of $4 million for defrauding student loan debtors levied in early August. The CFPB concluded senior Wells Fargo managers knew about the accounts fraud in 2013, and possibly earlier. The fines amounted to little more than a tax-deductible parking ticket for the bank, which is the fourth largest bank in the U.S., with assets of some $2 trillion, and which earns billions in profits every year.
6. The banks CEO, John Stumpf, was forced to resign earlier this month, but was allowed to take away $130 million in stock. No other senior manager at Wells Fargo has suffered any adverse consequences, and none of the banks senior managers or executive is now being charged with crimes, even as the bank fired more than 5,000 employees.
7. Three years ago, JP Morgan-Chase, the nation’s largest bank with more than $2.5 trillion in assets – one-fourth of all bank assets in the U.S, had to pay $13 billion to settle a civil lawsuit knowingly selling investments backed by bad residential home loans. While it seems like a huge settlement, but in reality it did little to dent the banks $18 billion a year profits. Nor did it discourage fraudulent practices by the bank in the management of its investment accounts, where it faced a $267 million fine last December for failing to disclose conflicts of interest to customers where the bank was steering them into high-risk investments in which the bank itself had an interest.
The four largest banks in the U.S. control 80% of all bank assets. After years of regulatory neglect and favorable treatment by the federal government, the corporate officers of these banks have come to believe they are beyond accountability. In effect, these banks, as well as many other big banks are nothing more than organized crime on a scale never before seen. If the banks themselves are “too big to fail”, the bank officers are NOT too powerful to jail.
When Iceland five years ago faced a financial crisis generated by its “too big to fail” banks and complicit government officials, the people of Iceland took aggressive action, demanding the government take control of the banks and that the top bankers and Prime Minister be jailed. In spite of the hysterical reaction by the big banks in Europe and the U.S., the big banks were nationalized, the bankers and Prime Minister were jailed, the banks then adopted debt relief for those who had been defrauded, and the Icelandic economy grew, and grew, and grew, until it became the healthiest economy in all the industrialized world.
The U.S is the only advanced economy in the world that doesn’t have a national public bank devoted to serving people and the public interest, rather than a small group of super-wealthy and greedy bankers. As the federal government did with General Motors in 2009, the authority exists to take over Wells Fargo and JP Morgan-Chase under these circumstances and operate them as a public enterprise. As with all crises, the scandals rocking Wells Fargo and JP Morgan-Chase are our opportunity to reform banking and put it to use creating jobs, protecting the environment, and treating employees with dignity and respect.
JAIL THE BANKERS, FIRE THE REGULATORS, NATIONALIZE THE BIG BANKS!
Darrell Whitman
October 26, 2016
publicsafety4america@gmail.com
Darrell Whitman is also the AFGE Local 2391 delegate to the San Francisco Labor Council SFLC
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