http://www.surfsantamonica.com/ssm_site/the_lookout/news/News-2017/February-2017/02_16_2017_City_Council_Votes_for_Santa_Monica_to_Sever_Ties_with_Wells_Fargo.html
City Council Votes for Santa Monica to Sever Ties with Wells Fargo
By Jonathan Friedman
Associate Editor
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.
