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|City Council Votes for Santa Monica to Sever Ties with Wells Fargo|
By Jonathan Friedman
February 16, 2017 -- The Santa Monica government’s financial relationship with Wells Fargo will soon come to an end following the City Council’s decision in the early hours of Wednesday morning to sever ties with the bank because it is one of 17 institutions funding the Dakota Access Pipeline.
A Wells Fargo spokesman said after the meeting that the company was disappointed in the move that “doesn’t take into consideration Wells Fargo’s record as a responsible corporate citizen and taxpayer,” including lending money to small businesses and homeowners in Santa Monica.
Council members heard from nearly three-dozen speakers, including several who sang and played drums in an “honor song,” during the session that did not begin until the final minutes of Tuesday night due to the meeting’s lengthy agenda.
Many of the speakers had been to the much-publicized protests in North Dakota, where they objected to the project because they say it stretches onto sacred native land and creates water and other environmental safety issues.
“Santa Monica is taking a stand against Wells Fargo because they have repeatedly used deceptive business practices,” Councilmember Tony Vazquez said.
He continued, “Their investment in the Dakota Access Pipeline is the latest egregious action. It’s our hope that other cities will divest their funds so together we can have a collective and powerful impact.”
Councilmember Terry O’Day called Wells Fargo a “key lender” to the pipeline project. But Wells Fargo spokesman Paul A. Gomez told The Lookout that the bank is “one of the smallest lenders,” putting up less than 5 percent of the project’s $2.5 billion price tag.
The Lookout has not independently verified these figures.
Gomez said the council’s move “may garner some symbolic news coverage, but it’s highly unlikely to stop construction.” The Army approved the project’s completion last week, but opponents have vowed to continue fighting.
A City press release said the divestment will begin “as soon as is reasonably possible.”
Interim City Attorney Joseph Lawrence told the council that there are a number of legal documents that need to be examined. City staff is expected to give more guidance at the February 28 council meeting.
“It has to be done not only orderly, but appropriately so as not to risk losses of City funds,” Lawrence said. “With that in mind, we obviously have to review any number of transactions that we have with Wells Fargo.”
How much money is at stake is not clear.
The City press release claims a figure of $1 billion in annual transactions, which would only be possible by counting many of the same dollars on their way in and out since the total municipal budget for the 2016-17 fiscal year is $614.1 million.
The City also says it has $4.6 million in Wells Fargo bonds.
Santa Monica is the third city to set a path for divestment from Wells Fargo. The city councils in Seattle and Davis approved severing ties with the bank earlier this month. The Alameda City Council will consider doing so next week.
While Wells Fargo will soon not be doing business with the Santa Monica government, Gomez says the company will continue its presence in the community that began in 1960 and currently includes more than 500 employees.
“In the past five years, we’ve given $836,000 in grants to 40 local nonprofits,” he told The Lookout. “Our team members here volunteered 1,968 hours in the community."
Gomez continued, "And regardless of the council’s ultimate decision, we will stand firm in our commitment to supporting communities in which our team members work and live.”
The council's vote for divestment was 5-0. Pam O'Connor had to leave before the vote was taken, and Sue Himmelrich recused herself because Wells Fargo is her former client and a current client of her husband.
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