Seattle Takes Steps to Divest $3 Billion From Wells Fargo Over Standing Rock
Over the past few months activists opposed to the Dakota Access pipeline have ramped up pressure on the pipeline company’s financiers, and now the city of Seattle is showing what kind of weight a large municipality can add as it looks at taking $3 billion in city business away from Wells Fargo.
The city of Seattle is showing what kind of weight a large municipality can add.
Wells Fargo is one of 38 banks offering financial support to the pipeline and its parent companies, according to research by Food & Water Watch, but it’s one of only 17 banks that have directly financed the pipeline construction by Dakota Access LLC. And one of only seven banks financing all of them with significant lines of credit offered to parent companies Energy Transfer Partners, Energy Transfer Equity, and Sunoco Logistics.
Seattle City Council member Kshama Sawant introduced legislation that would end the city’s contract with Wells Fargo, which handles $3 billion worth of city government business, including employee payroll. It was unanimously approved to go to a full vote in January. Wells Fargo’s contract with the city has another year to go, meaning no big changes right away, but the legislation could have broader implications as it proposes rules to ensure that the city does business with socially responsible businesses. In remarks introducing the bill December 12, Sawant said the city “can make a strong commitment to environmental, economic, and racial justice” by moving its business to an institution with a reliable social justice record.
“What we’re trying to accomplish is to establish a guide for the city of Seattle, a guide for socially responsible banking practices,” said Seattle activist and Standing Rock Sioux tribe member Matt Remle, a major backer of the proposal.
The action comes at a critical time for the Standing Rock tribe protesting the pipeline. The water protectors say the oil pipeline crossing the Missouri River endangers their water supply and violates sacred grounds. After months of standoffs and confrontations between water protectors and militarized police, the Army Corps of Engineers recently chose not to approve the current path of the pipeline. But many fear that a Trump administration will overturn that and the pipeline will be completed as currently routed.
Wells Fargo’s loans and investments in the project reach nearly half a billion dollars, according to the Food & Water Watch report. And while numerous banks have large investments in the pipeline, including Citibank, Wells Fargo is a strategic target not just because of its relationship with the city. Recent scandals have made it vulnerable to pressure.
“It’s really clear that banking with Wells Fargo is not aligned with the values of the city of Seattle.”
The Seattle City Council bill cites how the company “directed employees to fraudulently create more than 2,000,000 unauthorized bank and credit accounts during the past five years, negatively affecting the credit ratings of millions of customers,” and terminated 5,300 “of the corporation’s lowest-paid workers” without firing a single senior executive. As a result of that scandal, Seattle City Light in October ended its $100 million bond financing relationship with the bank.
Remle said that he has heard little opposition to the bill and is confident it will pass next month. In September, the city council issued a resolution in support of the water protectors. Remle said he hoped Seattle’s new bill would segue into further direct action against the banking giant. Minneapolis, which like Seattle has a sizable Native American population, is considering similar legislation to divest from Wells Fargo.
“My immediate goal after this is to work with some of our local gaming tribes, especially the ones in the Interstate 5 corridor,” Remle said, referring to tribes such as the Tulalip and Puyallup. “Some of those tribes near the major urban centers do pretty well, and I know of a few that are banking with Wells Fargo. I’d like to turn to them next.”
Meanwhile in downtown Seattle, activists organized by the local chapter of 350.org are staging daily demonstrations in support of the measure outside of the bank’s Seattle corporate office until January 5, when a group of deposit holders will one after another close their accounts and voice opposition to the bank’s investment in the pipeline.
“People seem very supportive of our attempts to move the needle on it,” said 350seattle.org organizer Alec Connon. “It’s really clear that banking with Wells Fargo is not aligned with the values of the city of Seattle.”
In a statement in response to Seattle’s proposal, the company said that it is “proud of the support it has diligently and professionally provided the city of Seattle as its operating bank since 1999.” In regard to the pipeline, it acknowledged that it is one of “17 financial institutions involved in the financing” of Dakota Access and that the “loans we have provided represent less than 5 percent of the total.” That does not include the credit lines given to Dakota Access’ parent companies.
Early this month, Wells Fargo reportedly reached out to Standing Rock tribal elders for discussions after a DAPL-related protest took place outside the bank’s Minneapolis corporate office.
Connon noted that while a resolution in support of Standing Rock was adopted by the city, Sawant’s bill was a necessary escalation. “We need to see them pass this ordinance, because we need to see actions and not just words.”