ALAMEDA — The city of Alameda has taken the first steps toward divesting more than $36 million from its accounts at Wells Fargo over the bank’s involvement with the Dakota Access pipeline and the bank’s history of controversial practices.
The City Council voted unanimously early Wednesday morning to immediately refrain from investing in the bank’s securities and told city officials to begin the process of securing a new bank.
Along with the Dakota Access pipeline, the council’s actions are a response to last year’s scandal in which regulators found that the San Francisco-based bank set up accounts for consumers without their knowledge to meet sales goals, which led to $185 million in fines and the firing of at least 5,300 employees.
“If there is bad behavior and we do nothing about it, then we are passively condoning it,” said Vice Mayor Malia Vella, who, along with Councilman Jim Oddie, put the city’s involvement with Wells Fargo on the council’s agenda.
On Feb. 15, the city of Santa Monica moved to begin divesting from Wells Fargo amid the controversy surrounding the bank’s partial funding of Energy Transfer Partners, the Texas company behind the nearly-completed Dakota Access pipeline. The cities of Davis and Seattle decided to pull their money over the funding on Feb. 7.
Last month, the University of California divested $475 million due to the bank’s ties to private correctional facilities.
“The more I find out, the worse it gets,” Councilman Frank Matarrese said about Wells Fargo.
About a dozen public speakers addressed the council on the issue, all urging the city to shift its money from Wells Fargo.
“By financing private prison companies, Wells Fargo is not only promoting the abusive practices behind private prison walls but also profiting from mass incarceration,” said Benjamin Davis, a research and policy analyst with In The Public Interest, an Oakland-based organization that works to promote best practices in government contracting and other types of public-private agreements.
Alameda has about $36 million in a general checking account at Wells Fargo for operating expenses, according to the city’s quarterly investment report published in January. There is an additional $325,000 in a workers compensation account.
Oddie said he believes moving the funds reflects Alameda’s official investment policy, which prohibits doing business with any company involved in the coal industry.
Along with telling city officials to begin the process to secure a new bank, the council also wants the city to refrain from investing in Wells Fargo securities for three years. A request for proposals, a first step toward finding a new bank, should be ready for the council to consider in about six weeks.
The 1,172-mile Dakota Access pipeline, which will bring oil underground from North Dakota to Illinois, has prompted widespread protests for almost a year from environmentalists and Native Americans.
The $3.8 billion project calls for the pipeline to travel under a section of the Missouri River near the Standing Rock Sioux Tribe reservation, which the tribe says threatens its drinking water and sacred sites.
In December, then-President Barack Obama’s administration announced it would halt construction under the river for further reviews. But President Donald Trump, a pipeline supporter, signed an executive order shortly after his inauguration that helped clear the way for the project to go ahead.
“Wells Fargo is one of 17 different financial institutions financing the Dakota pipeline,” bank spokesman Ruben Pulido said in a statement. “Our loan represents less than five percent of the total funding. We have also banked the Standing Rock Sioux and some 200 other Native American Tribes across the country. In fact, we have met with the Standing Rock Sioux leadership a number of times, including earlier in February, in order to better understand their concerns. We have also met with Energy Transfer Partners to share the tribe’s concerns and to emphasize the need for both sides to reach a positive and peaceful resolution.”