Wells Fargo

Wells Fargo

Wells Fargo

I have always been fascinated by the term “white collar crime.” It makes it seem as if stealing lots of money is not as bad as stealing a small amount.  It rarely results in punishment that fits the crime.  Yet the small-time thief is often thrown under the jail, like the guy who stole $20 from a parking meter and was sentenced to 10 years.

Contrast that with the fallout from the recently exposed Wells Fargo Bank scam, in which two million credit cards and customer accounts were opened using phony signatures and email addresses. More than 5,000 low-level employees got fired for trying to meet impossible sales targets set by their supervisors. The CEO said it was all their fault, as if thousands of bank workers making $12 an hour woke up one morning and decided to defraud their customers. Not one manager was terminated. And even if the CEO eventually loses his job, he will reportedly walk away with company stock that grew to be worth more than $200 million because of the scam. That’s on top of the $19.3 million salary he was paid last year.

Isn’t America great if you wear a white collar? Stockholders want high returns on their investments. The members of the board of directors, who often own much of the stock, set performance goals for the CEO. The CEO wins bonuses if he meets those goals, and in turn guarantees bonuses for his vice presidents if they help him reach his target. And so it goes down the line. But the financial incentive is very small by the time it reaches tellers and other low-paid employees. According to them, their incentive at  Wells Fargo was being told to hit their targets or lose their jobs.

When schemes like this are uncovered – whether at Wells Fargo, or in the mortgage business, at savings and loans, in the auto industry, or countless other segments of the economy – the process has become familiar. Congress investigates, CEOs testify in their crisp white collars, and the media report about it. We watch and we listen and we say to ourselves, “That’s not right.” Then we wait for the next time. Along the way, stockholders made money, board members made money, CEOs and upper-level managers made money. The 5,300 employees who feared losing their jobs? They are unemployed and can’t find work because they were terminated for violating company policy.

The values of dog-eat-dog competition, anything-for-a-profit, and materialistic consumerism destroy the human spirit. They eat at our souls. Something is wrong when thousands of people are laid off and stock prices rise. Pleasure for the wealthy should not be paid for with the hourly worker’s pain. The America of our dreams would not abide such an outcome. The America we live in expects it.

What bothers me most is that everyone knows the truth. Board members, CEOs, and the members of Congress  who investigate them will discuss it over cocktails or on the golf course. Some may even chuckle about how they got away with it as they buy their new yacht. Then when they return from vacation, they will put on another crisp white collar and conjure up another scheme to defraud the unsuspecting public and blame it on employees who can’t say no.

Even the 5,300 “bad” employees must have known that they were crossing the line. But with a wink from their supervisor, a nod from his boss, and praise from the vice president for a job well done, I guess they went along with the program. It was their job. What they should have realized, after seeing it on TV so many times, was that in the end, they would be left holding the bag.

President’s Blog

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