Wells Fargo CEO Tim Sloan is being questioned by the House Financial Services Committee on Tuesday. Sloan is the first of probably many banking heads to be brought in to meet with the Democratically controlled House to discuss the economic status of the banking industry right now. Democratic Rep. Sean Casten of Illinois asked Sloan whether his bank’s series of fraudulent actions, costing U.S. citizens billions of dollars, were being washed away by the Republican tax cuts.
Rep. Casten: I have some math questions. I think these are pretty straight forward, but I’m scratching my head. If I am following the math right, last year you had about three and a half billion dollars in fines last year.
Sloan: I’m sorry?
Rep. Casten: You had about three-and-a-half billion dollars in fines last year? If I add up the 2.1 and the one and some of the smaller ones—just looking at the handout.
Sloan: I think that’s because that included the settlement of the RMBS matter from about a decade ago, that’s correct.
Let’s step quickly to the side here. If you want to know how genuine the hooey coming out of CEO Sloan’s mouth is, the “settlement” he’s referring to was a $43 million settlement announced this past November. Sloan is implying that this “RMBS” settlement from some long time ago is greatly affecting the $3.5 billion number Rep. Casten is stating. Would it have been better if Casten had said the $3.43 billion in fines? Weak.
Rep. Casten: Now, the tax cut from last year save you about the same amount—if I look at the falling tax rate—from an after tax perspective, it was about a wash for you.
Sloan: No I wouldn’t, I would say it was a bit less than that—but no question that it—
Rep. Casten:--Squint your eyes, it was pretty close.
Sloan:--From the reduction and the tax rate, that’s correct.
How about we just deduct that $43 million Sloan was just bullshitting about?
Rep. Casten: And certainly if I look at your share price and constant earnings multiples, your share price is about what it was in 2017. The market has seemed to have said, plus one, minus another, you are about even. The first question comes, that given a lot of your senior executives, your compensation is tied to share price in some fashion, is that about a wash? For you personally? For the leadership team?
Sloan: I’m sorry, I’m not follow you—
Suddenly the CEO of a multibillion dollar business is unable to follow an elementary school-level math problem of subtraction.
Rep: Casten: Three and half billion dollars in fines, you’re up in 3.4 billion of avoided tax revenue, so your earnings are about constant.
Rep. Casten continues by nailing down that, for some reason, Wells Fargo’s investors seem to be fine with how management keeps allowing fines of this level, suggesting it is because they know that there are no real fines.
Wells Fargo admitted to lying to the U.S. government in order to get our money to insure toxic assets. Wells Fargo’s “errors” cost hundreds of Americans their homes after it incorrectly foreclosed on them. Wells Fargo illegally repossessed hundreds of U.S. military veterans’ vehicles. These are just some of the many fraudulent actions the banking giant actively perpetrated over the past decade.
For their part, the Republican Party and the Trump administration have worked tirelessly to ease Wells Fargo’s actual financial liabilities. Trump’s Consumer Financial Protection Bureau chief, Mick Mulvaney, has manufactured further Wells Fargo settlements, with big numbers but little payout, since assuming office. If there is no punishment, penal or financial, to stop these big business crooks from criminal behavior, it stops being considered “criminal.”
