I admit I’m baffled by all the praise being heaped on Senator Elizabeth Warren for her comments to Well Fargo criminal mastermind and CEO, John Stumpf. She “grilled” him, “ripped” him, “excoriated” him, and “eviscerated” him, ran the headlines. Liberals were particularly rapturous in their praise for Warren, who told Stumpf he should resign and called for his company to be investigated and give back its profits.
You know what Warren didn’t do? Anything that really matters.
For those of you who, like me, don’t read the newspaper, here’s how the New York Times describes the Wells Fargo story:
For years, Wells Fargo employees secretly issued credit cards without a customer’s consent. They created fake email accounts to sign up customers for online banking services. They set up sham accounts that customers learned about only after they started accumulating fees…These illegal banking practices cost Wells Fargo $185 million in fines, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has issued.
(The CFPB is, of course, Warren’s baby but when it time came to announce its director President Obama shafted her — see image above — in favor of Richard Cordray.)
Wow, $185 million sounds like a lot, but it’s just the cost of doing business for Wells Fargo. And let me explain, very briefly, a little more directly what Stumpf and Wells Fargo did.
First, Stumpf violated the RICO Act, which “focuses specifically on racketeering, and it allows the leaders of a syndicate to be tried for the crimes which they ordered others to do or assisted them in doing.”
Second, Wells Fargo committed stock fraud and manipulation by inflating the bank’s value and share price due to profits from its criminal actions.
Third, Wells Fargo committed credit card fraud. If you or I opened up a bogus credit card in someone else’s name we’d go to prison.
So it’s great, I guess, that Warren was mean to Stumpf but a big fine won’t deter future financial crimes. Stump should have been criminally charged and led out of the Senate hearing in handcuffs. Instead, he’s going to walk away from Wells Fargo with a few hundred million dollars. The employees who opened up the bogus accounts were fired; some of them, and bank executives who were in on this racketeering scheme, should be prosecuted. (Bank employees who were made scapegoats for the executives — and that’s surely the vast majority of the 5,300 who were canned — should be rehired.)
Warren’s speech made for great TV and wonderful soundbites for her future campaign ads. It might even help get her a position in a Hillary Clinton/Goldman Sachs administration, if Hillary wins, which is her fondest hope. Then she’ll be able to posture even more without accomplishing much of anything.