SAN LEANDRO CITY COUNCIL
A rash of banking scandals implicating Wells Fargo, in addition, to its controversial investment in the progressive cause célèbre, the Dakota Access Pipeline, has lead another East Bay city to take steps toward ending its banking relationship with the historic California institution.
The San Leandro City Council voted, 6-0, Monday night to divest a $700,000 investment note from Wells Fargo, while laying the foundation to begin seeking a new banking vendor sometime in the future.
Alameda, Oakland, and Berkeley have either taken concrete steps toward divestiture or are in the process of examining the issue. The San Leandro council first directed its staff in March to study possible divestiture from the bank.
A bid for total divestiture from Wells Fargo, however, was not advisable, according to the city’s Finance Director David Baum, who said beginning the process for choosing a new institution would place additional stress on an already short staff.
There is also a dearth of local institutions that can handle San Leandro’s $5 million bank account that is used primarily for day-to-day expenses, said Baum. Additionally, most of the local banks potentially suitable for replacing Wells Fargo, also have ties to the controversial Dakota Access Pipeline.
But for many San Leandro elected officials, Wells Fargo’s lack of ethics and corporate responsibility outweighed the logistical issues presented by city staff.
Several, in fact, repeatedly referenced State Treasurer John Chiang‘s stand against Wells Fargo, in which he barred the state from investing in the bank’s securities.
“If our [treasurer] says he can’t trust Wells Fargo, that holds a lot of weight with me,” said Councilmember Benny Lee. Wells Fargo’s involvement in the Dakota Access Pipeline is also hurting the indigenous people of South Dakota, he added. “This is like us supporting apartheid.”
A proposed motion by Lee that would have immediately begun the process for the city putting out a bid for a new banking vendor and also hiring a consultant, however, failed to muster support.
A revamped motion stating a similar sentiment some time next year or when the city’s finance department returns to full strength, though, received a 6-0 show of support Tuesday night.
Councilmember Lee Thomas and Mayor Pauline Russo Cutter shied away from supporting the original motion because of a lack of information over the consultant’s potential costs.
When the accounting department is whole, said Cutter, she will support moving forward with a Request for Proposal. “Eventually we’re trying to get away from Wells Fargo,” she said.