Wells Fargo: Seattle decision overlooks bank’s impact on city
A letter to the Seattle City Council highlights Wells Fargo's record after the city voted to end its 18-year relationship with the company over the Dakota Access Pipeline.
Editor’s note: In response to the city’s vote to end ties with the bank over its involvement with the Dakota Access Pipeline, Phil Smith, head of Government and Institutional Banking for Wells Fargo, sent the Seattle City Council the following letter on Feb. 28, 2017.
The Honorable Edward B. Murray
Mayor of Seattle
The Honorable Bruce Harrell
President, Seattle City Council
The Honorable Tim Burgess
Chair, Seattle City Council Affordable Housing, Neighborhoods, & Finance Committee
P.O. Box 94749
Seattle, WA 98124-4749
Dear Mayor Murray, Council Member Harrell, and Council Member Burgess:
The Seattle City Council’s recent vote to end the City’s 18-year relationship with Wells Fargo based on our participation in the financing of the Dakota Access Pipeline and recent consumer lawsuits was disappointing, and could cause some unintended consequences for taxpayers. I’d like to make a few respectful observations and provide an offer for your consideration.
Wells Fargo has been a strong partner for the City of Seattle through both good and challenging times. Looking back at our relationship with the City, we were awarded your business in 1999 through a formal RFP process as the most qualified bank that could deliver the complex banking and treasury solutions the City required and providing those at the best value for your residents. Most recently, we retained the City’s business in 2012 through another rigorous RFP, chosen once again as the best solution for the City’s financial needs. Working with the City through the years, we’ve built an outstanding relationship with your Department of Finance & Administrative Services, based on diligence, honesty, and integrity.
As I’m sure you and your staff have considered, changing banks is often a very complex process, and can include the potential for incurring unnecessary costs for the City and its taxpayers from other banks for transferring accounts, payments and disbursement services, payroll, merchant card processing, investments, and higher priced, ongoing services.
Wells Fargo would like to offer the City the opportunity to break your banking services contract with us immediately and without any related fees. We also offer to help you make a smooth transition to the bank of your choice.
I would point out that other PDPC-approved financial institutions that have responded in the past to the City’s RFP for Bank Depository Services, or that are currently providing the City with services, also are involved with the financing of the Dakota Access Pipeline project. We feel it is critical for the City to consider these facts and weigh them alongside our nearly two-decade partnership that has indisputably well served the people of Seattle.
We understand there are strong feelings around the Dakota Access Pipeline, and we take those concerns seriously. We aim to be responsible stewards and advocates for environmental protection and we are proud of our record in this area. In fact, in 2015, the United States Green Building Council named Wells Fargo the “green” building leader among financial institutions for our implementation of Leadership in Energy and Environmental Design (LEED) standards.
As a reminder, Wells Fargo is one of 17 different banks financing the Dakota Access Pipeline project. Our support represents less than five percent of the total funding. While assessing the pipeline project for a loan, as with all similar projects, Wells Fargo undertook an extensive due diligence. The bank worked with legal counsel representing the lending syndicate as well as our own independent counsel to ensure that the project complied with all local, state, and federal laws. To assess any potential cultural and environmental impacts, the due diligence process included reviewing the report of the independent engineer who verified that the project complied with the Equator Principles, a global framework designed to determine, assess, and manage social and environmental risks and impacts of projects like the Dakota Access Pipeline.
There has been quite a bit of inaccurate information disseminated about the pipeline itself, and we’d like to set the record straight about a few facts. The Dakota Access Pipeline does not enter or cross the Standing Rock reservation. The entire pipeline is buried underground. Eight other pipelines already cross Lake Oahe, including one that has safely operated for more than 30 years. The site where the Dakota Access Pipeline crosses the Missouri River is 70 miles from the new water supply inlet for the Standing Rock Sioux.
Wells Fargo is a large, complex entity, not unlike the City of Seattle, in that it has to weigh and balance competing interests when making decisions and investments. Wells Fargo is one of the largest lenders to the nation’s energy sector, supporting responsible development of all forms of energy. Our bank has a 40-year history financing traditional energy projects and makes sizable investments in renewable energy and clean technology through our Clean Tech and Environmental Finance businesses. Since 2012, we have invested more than $70 billion in environmentally sustainable businesses. In 2015, projects we owned in whole or part produced 10 percent of all solar photovoltaic and wind energy generated in the U.S.
Multiple Wells Fargo banking units also have been serving Native Americans/Alaska Natives for more than 50 years, providing capital and financial services to more than 200 tribal entities in 27 states. To date, Wells Fargo has credit commitments of more than $2 billion to tribal entities and made $44 million in tax credit investments, including financing Low Income Housing Tax Credit projects in nine states (Arizona, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota and Wisconsin) and sponsoring Affordable Housing Plan subsidies for tribal housing projects. Additionally, to best serve our Native American customers, we currently operate 19 branches and 42 ATMs on 17 reservations in seven states.
Wells Fargo has been a responsible corporate citizen in Seattle, paying taxes that support the City’s vital services for its citizens. It’s worth noting that while the City is a very important bank client, we have paid substantially more in local taxes than we have earned on our banking services contract.
And we will continue to do the right thing and reinvest in the communities like Seattle where our team members and customers live and work. As a result, the City and its citizens will continue to benefit from our investment in the community. For example:
- In 2016, Wells Fargo committed $5 million in down‑payment assistance to boost Seattle-King County homeownership through our NeighborhoodLIFT® program as part of our national homebuyer education and homeownership effort.
- In January 2017, Wells Fargo donated another $500,000 for the Seattle area to address community revitalization, health and wellness, and homeownership in Seattle-King County. The Wells Fargo Foundation provided the grant money to local nonprofits, including Capitol Hill Housing, Downtown Emergency Service Center, El Centro de la Raza, Homestead Community Land Trust, and Mercy Housing Northwest.
- Awarded a $450,000 Grant to University of Washington’s Foster School of Business for its Clean Technologies and Innovations program. This grant is part of Wells Fargo’s 2020 Environmental Commitment to provide $100 million to environmentally focused nonprofits and universities.
- Wells Fargo Economic Opportunity Grants for Workforce Development included:
- $25,000, Urban League of Metropolitan Seattle Workforce Development
- $25,000, Neighborhood House Education and Workforce Development
- $75,000, Ventures Small Business Lending and Technical Assistance
- In 2016, employees in Washington State donated $1.2 million of their own money to schools and non-profits as part of our annual Community Support Campaign.
The contributions above represent a fraction of the reinvestment impact that Wells Fargo makes in Seattle, King County, and Washington. Wells Fargo is providing direct investment in Seattle to assist the City and its citizens in addressing their most important social and community issues.
We are proud of our track record of client service and investing in the communities where our employees work and live. We hope the City successfully transitions to another financial services partner that can also provide the same kind of focus and impact as Wells Fargo on vital social and community issues.
Ending a long-term partnership is never easy, and we do not believe this decision is in the best interest of Seattle’s residents. But if this remains your decision, despite the information we’ve shared today, we stand ready to work with you to complete this transition as smoothly and as quickly as possible. Please let us know if you would like to discuss the immediate termination of your contract.
Phillip D. Smith
Head of Government and Institutional Banking
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