Seattle Divestment: A Defense of the Environment, Integrity in Banking

The Seattle divestment pulls more than $3 billion in city funds from Wells Fargo as a result of the bank’s role in DAPL and other bad banking practices.

The Seattle City Council vote on February 7 to pull more than $3 billion in city funds from Wells Fargo was a rebuke against the bank for its role in financing the Dakota Access Pipeline, as well as a statement about sovereignty, the environment and ethics in banking. The same day as the Seattle divestment from Wells Fargo, Mayor Ed Murray and City Councilmember Debora Juarez, Blackfeet, issued statements in opposition to President Trump’s executive order clearing the way for pipeline construction.

Environmental advocates oppose the pipeline route through the historical territory of the Standing Rock Sioux Nation, citing risk of drinking water contamination and disturbance of land containing ancestors’ remains and cultural sites. Pipeline construction was blocked by the Obama administration but has the support of the Trump administration.


Juarez said Trump’s executive order “unlawfully deprives Native peoples of their rights of due process and meaningful consultation. This action single-handedly ignores the supreme law of the land – the 1851 Treaty of Fort Laramie – waives due process, and undermines American democratic principles of transparency and public accountability.

“At the President’s direction, the Corps’ order to halt the EIS process and approve the pipeline has added insult to the very real injuries suffered by the Standing Rock Sioux, and by extension, the rights of indigenous Peoples everywhere.”

Murray said the Trump administration’s reversal on the environmental impact statement by the Army Corps of Engineers “is clearly a political decision made with complete disregard for the impacts of the Dakota Access Pipeline” on Native lands and the environment. He said Trump’s decision “continues a historic pattern” of violating treaty rights of Native Nations.

Seattle Divestment: ‘We, as allies, must add our voices’

Issues related to the environment and the sovereignty of Native Nations are local issues.

Seattle, population 684,451, is the largest city in Washington and the 18th largest city in the United States. It is within the historical territory of the Duwamish people and is named for Si’ahl, or Seattle, the 19th century leader of the Duwamish and Suquamish peoples and first signer of the Treaty of Point Elliott of 1855, which made land in this region available to newcomers.

Seattle is a neighbor to 29 federally recognized Native Nations that have been fighting to protect their lands and waters from the risks posed by coal trains and increased oil transport. In Seattle, the Duwamish River – altered and industrialized since the post-treaty era – is a Superfund cleanup site. The killer whale population in the Salish Sea is approximately 80, down from a historic level of about 200 in the late 1800s, according to the National Oceanic and Atmospheric Administration. Some 90 percent of salmon caught in the Salish Sea originate in hatcheries, according to the Northwest Indian Fisheries Commission and the state Department of Fish and Wildlife.

Trump’s executive order on DAPL “shows no respect for the right to clean drinking water for all,” Murray said. “We, as allies, must add our voices and put a stop to this injustice. [Standing Rock Sioux Tribe] continues to fight this battle in court and the City of Seattle continues to stand behind them.”


Bank: ‘Legally required to lend if qualified’

Wayne Thompson, a communications consultant for Wells Fargo, wrote that Wells Fargo is not the lead bank on the project, but is one of 17 banks that have loaned money to the developers of the pipeline. “The company is lending $120 million — 4.8 percent of the total financing — to the project’s $2.5-billion credit facility,” Thompson wrote. “The additional $1.28 billion required for the project is being funded by the pipeline’s owners.”

Regarding Wells Fargo’s loans to the pipeline developers, Bart Schouest of Wells Fargo’s Energy Corporate Banking Group was quoted on the bank’s website as stating that the bank “is legally obligated to satisfy the requirements as a lender if all conditions of the credit agreement are met.”

Thompson pointed out Wells Fargo’s record as a lender to clean energy and Indian country.

Since 2012, the company has invested more than $52 billion in environmentally sustainable businesses, he wrote, and in 2015, projects owned in whole or part by the company produced 10 percent of all solar photovoltaic and wind energy generated in the U.S.

“At the same time, multiple Wells Fargo banking units also have been serving Native American tribes for more than 50 years … To date, Wells Fargo has loaned $2 billion to tribal entities, and made $44 million in tax credit investments, including financing Low Income Housing Tax Credit projects in nine states and sponsoring Affordable Housing Plan subsidies for tribal housing projects. Since 2013, Wells Fargo has also provided more than $11 million to tribal nonprofit organizations, and in 2016 announced a three-year, $3 million educational grant to benefit students from both federally and state-recognized tribes.”

Leading to the Seattle Divestment: ‘Deplorable banking practices’

Councilmember Juarez said before the vote that the Dakota Access Pipeline was only one reason for the Seattle divestment.

She said Wells Fargo employees’ creation of unauthorized bank and credit card accounts in customers’ names, for which the bank received unwarranted fees so they could hit sales target, betrayed the trust of Seattle taxpayers.

“From the beginning, Wells Fargo employees have willfully and deceptively left many of their customers with poor credit scores and miniscule bank accounts — some of the very same people we were elected to represent,” Juarez said following the Seattle divestment, adding, “The City must trust the practices and integrity of the institutions that handle our public funds.”

Wells Fargo fired 5,300 employees for enrolling customers in online banking services without authorization, and CEO John Stumpf resigned. But he did so with a full wallet. According to Fortune magazine, Stumpf owned 2.4 million shares in the company worth $109.9 million, had $19.9 million in his pension account, and was entitled to $4.4 million in deferred compensation.

In October, the city cancelled a $100 million bond with Wells Fargo. With the February 7 Seattle divestment, Juarez said, “we can put our trust in a new institution with whom we do business and hope that other cities will follow suit and show Wells Fargo, and other socially irresponsible banks, the door.”