The case of Wells Fargo suggests that even when a massive scandal is revealed to the general public, the moral depravity of a company’s culture is skirted rather than fully perceived. Wells Fargo was fined a total of $185 million by regulatory agencies including the Consumer Financial Protection Bureau, which had accused the bank of creating as many as 1.5 million deposit accounts and 565,000 credit-card accounts that for which consumers never asked. The bank fired 5,300 employees over the course of about five years after it was revealed those employees had opened the accounts and credit cards. Wells Fargo's CEO at the time, John Stumpf, "opted" for a cushy early retirement after an abysmal performance before a U.S. Senate committee; he walked away from the bank with around $130 million, and none of the other members of senior management were fired, or "retired," obliterating any hope societally that any of the senior managers would be held accountable. This result is particularly troubling, given the true extent to which that management had turned the bank into an ethically compromised organization.
"There is a serious problem with senior management at Wells Fargo," U.S. Senator Elizabeth Warren told CNBC in September, 2016. "You can't have a scandal of this size and not have some senior management who are personally responsible," she said. With so many sham accounts and fake credit-card applications, the problem must have gone beyond particular executives giving orders. As a former bank employee told me, “When we went to work there, we knew we were selling our souls to the devil.” To be sure, being willing to be hired anyway is a choice worthy of blame. We can be struck nonetheless at the unexpected banality of bank. It is truly remarkable both that a well-established institution could have such a sordid culture out of public view, and that senior managers could be fine with such “shared understandings” within the bank.
Besides the over-charged customers, aggrieved Wells Fargo workers--"people who say they were fired or demoted for staying honest and falling short of sales goals they say were unrealistic"--bore the brunt of the unethical senior and middle management. For example, Yesenia Guitron, "a former banker, sued Wells Fargo in 2010--three years earlier than the bank has admitted it knew about the sham accounts . . . Intense sales pressure and unrealistic quotas drove employees to falsify documents and game the system to meet their sales goals, she wrote in her legal filing.” She “said she did everything the company had taught employees to do to report such misconduct internally. She told her manager about her concerns. She called Wells Fargo’s ethics hotline. When those steps yielded no results, she went up the chain, contacting a human resources representative and the bank’s regional manager. Wells Fargo’s response? After months of what Ms. Guitron described as retaliatory harassment, she was called into a meeting and told she was being fired for insubordination.” Clearly, she had not gotten the memo on the requirement of selling her soul to the devil.
A memo to the rest of us could inform us that our designated watchdogs in the media do not go far enough in uncovering for us just how bad things are in companies run by unethical people. The extent of their moral depravity, and thus of the organizational culture, is not reaching us. As a result, we cannot push our elected representatives enough—the corporate lobbying notwithstanding—to enact legislation that is sufficient to meet such challenging cases. We suppose, for instance, that the replacement of a CEO can be sufficient to usher in restorative measures at the company level in spite of the extent of depravity.
1. Jon Marino, “Bove: Wells Fargo Will Make Retail Banks ‘Rethink’ Compensation,” CNBC.com, September 14, 2016.
2.Matt Egan, “Wells Fargo CEO Walks with $130 Million,” CNN Money, October 13, 2016.
3.John Marino, “Elizabeth Warren.”
4.Marino, “Elizabeth Warren.”
5. Stacy Cowley, “Wells Fargo Workers Claim Retaliation for Playing by the Rules,” The New York Times, September 26, 2016.
6. Cowley, “Wells Fargo Workers.”