Senator Elizabeth Warren Grills Wells Fargo CEO John Stumpf During Banking Committee Hearing!

Thank you, Mr. Chairman. Mr. Stumpf, the Wells Fargo vision and value statement, which you frequently cite, says, "We believe in values lived, not phrases memorized." If you want to find out how strong a company's ethics are, don't listen to what its people say, watch what they do. So let's do that. Since this massive years-long scam came to light, you have said repeatedly, "I am accountable." But what have you actually done to hold yourself accountable? Have you resigned as CEO or chairman of Wells Fargo or the board I serve at? Have you resigned?

All right. Have you returned one nickel of the millions of dollars that you were paid while this scam was going on?

And that's not my question. My question is about responsibility. Have you returned one nickel of the millions of dollars that you were paid while this scam was going on?

Have you returned one nickel of the money you earned while this scam was going on?

I will take that as a no. Then have you fired a single senior executive? And by that I don't mean a regional manager or branch manager. I'm asking about the people who actually led your community banking division or your compliance division.

I just said I'm not asking about regional managers. I'm not asking about branch managers. I'm asking if you have fired senior management, the people who actually led the community banking division who oversaw this fraud, or the compliance division that was in charge of making sure that the bank complied with the law. Carrie Tolstedt said, did you fire any of those people?

Okay. So you haven't resigned, you haven't returned a single nickel of your personal earnings, you haven't fired a single senior executive. Instead, evidently your definition of accountable is to push the blame to your low-level employees who don't have the money for a fancy PR firm to defend themselves. It's gutless leadership. In your time as chairman and CEO, Wells has been famous for cross-selling, which is pushing existing customers to open more accounts. Cross-selling is one of the main reasons that Wells has become the most valuable bank in the world. Wells measures cross-selling by the number of different accounts a customer has with Wells. Other big banks average fewer than three accounts per customer, but you set the target at eight accounts. Every customer of Wells should have eight accounts with the bank. And that's not because you ran the numbers and found that the average customer needed eight banking accounts. It is because "eight rhymes with great." This was your rationale right there in your 2010 annual report. Cross-selling isn't about helping customers get what they need. If it was, you wouldn't have to squeeze your employees so hard to make it happen. No, cross-selling is all about pumping up Wells' stock price, isn't it?

Let me stop you right there. You say no, no. Here are the transcripts of 12 quarterly earnings calls that you participated in from 2012 to 2014, the three full years in which we know this scam was going on. I'd like to submit them for the record, if I may, Mr. Chair. Thank you. These are calls where you personally made your pitch to investors and analysts about why Wells Fargo is a great investment. And in all 12 of these calls, you personally cited Wells Fargo's success at cross-selling retail accounts as one of the main reasons to buy more stock in the company. Let me read you a few quotes that you had. April 2012: "We grew our retail banking cross-sale ratio to a record 5.98 products per household." A year later, April 2013: "We achieved record retail banking cross-sale of 6.1 products per household." April 2014: "We achieved record retail banking cross-sale of 6.17 products per household." The ratio kept going up and up, and it didn't matter whether customers used those accounts or not. And guess what? Wall Street loved it. Here is just a sample of the reports from top analysts in those years, all recommending that people buy Wells Fargo stock in part because of the strong cross-sell numbers. And I'd like to submit them for the record. No objections. Thank you, Mr. Chair. So when investors saw good cross-sell numbers, they did well while this scam was going on. That was very good for you personally, wasn't it, Mr. Stumpf? Do you know how much money, how much value your stock holdings in Wells Fargo gained while this scam was underway?

We've been through this, Mr. Stumpf. I asked you a very simple question. Do you know how much the value of your stock went up while this scam was going on?

Do you know how much it was?

Oh, you're right. It is all in the public records, because I looked it up. While this scam was going on, you personally held an average of 6.75 million shares of Wells stock. The share price during this time period went up by about $30, which comes out to more than $200 million in gains, all for you personally, and thanks in part to those cross-sell numbers that you talked about on every one of those calls. You know, here's what really gets me about this, Mr. Stumpf. If one of your tellers took a handful of $20 bills out of the cash drawer, they'd probably be looking at criminal charges for theft. They could end up in prison. But you squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket. And when it all blew up, you kept your job, you kept your multi-million dollar bonuses, and you went on television to blame thousands of $12-an-hour employees who were just trying to meet cross-sell quotas that made you rich. This is about accountability. You should resign. You should give back the money that you took while this scam was going on. And you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission. You know, this just isn't right. A cashier who steals a handful of $20s is held accountable, but Wall Street executives almost never hold themselves accountable. Not now, and not in 2008 when they crushed the worldwide economy. The only way that Wall Street will change is if executives face jail time when they preside over massive frauds. We need tough new laws to hold corporate executives personally accountable, and we need tough prosecutors who have the courage to go after people at the top. Until then, it will be business as usual, and at giant banks like Wells Fargo, that seems to mean cheating as many customers, investors, and employees as they possibly can. Thank you, Mr. Chair.

Mr. Stumpf, as you know, some of my colleagues and I sent you a letter last week about the board's plans to claw back compensation from senior executives who were responsible for overseeing this scam. Wells Fargo provided us with a response yesterday. I noticed that although we sent the letter to you, the response actually came from somebody else in the company, which I guess is another example of holding yourself accountable. I want to focus now on the mysterious circumstances surrounding Carrie Tolstedt's retirement in July. As you know, Ms. Tolstedt ran the community banking division, the division where this scam occurred, for the entire time that the scam took place. She was in charge of all of the 5,300 employees who were fired, and she oversaw the creation of 2 million fake accounts. Now, in July of this year, just two months before the settlement was announced and before those facts became public, Ms. Tolstedt retired at age 56. You indicated in the letter responding to our letter that she walks away with over $90 million in stock, stock options, and awards. Fortune Magazine says it's actually about $125 million. But here's the key part: according to Fortune, if Ms. Tolstedt had been fired instead of retiring, she would have had to forfeit as much as $45 million of that award. Mr. Stumpf, the response to our letter confirms that you knew of this scandal before Ms. Tolstedt retired. It said, and this is from your letter, "Senior management and the board were aware of the pending litigation, investigation, and discussions with our regulators relating to sales practices when Ms. Tolstedt indicated her decision to retire." Is that accurate, Mr. Stumpf? What this letter says: were you personally aware of the massive problem that occurred under Ms. Tolstedt's watch in July when she announced her retirement?

So you had some indication there was a massive problem.

Also known as a massive problem. Well, if you knew this, did you consider firing Ms. Tolstedt before she retired?

It's a simple question. You knew there was a problem. Did you consider firing her?

Seriously? You found out that one of your divisions had created 2 million fake accounts, had fired thousands of employees for improper behavior, and had cheated thousands of your own customers, and you didn't even once consider firing her ahead of her retirement?

Are you sure that those were not fake?

So you never considered firing her. So now Ms. Tolstedt has apparently retired but is also staying with the firm through the end of the year. And in the response to our letter, you state, or the person writing it states, "Ms. Tolstedt is eligible to be considered for a 2016 annual incentive award." An incentive award for doing a great job in 2016. Mr. Stumpf, that is unbelievable. You are the chairman of the board and the CEO. In those roles, do you think it would be appropriate for Ms. Tolstedt to get another bonus on top of the millions that she has already gotten as a reward for her role in this massive scam?

I don't understand that answer. You know, you and your board have already made changes. You've made changes to the compensation scheme for thousands of employees. You've sat here today and talked about that. You've removed sales quotas, I think you told us. You've reformed incentives. Why can that be done quick as a wink across the entire bank, but a question about cutting compensation for a highly placed executive who oversaw a massive fraud takes long deliberation? Why is that?

I'm sorry, if she was fired, it is my understanding she would not be entitled to large parts of her compensation. It's not just a clawback issue. We're talking about she doesn't get them to begin with if she gets fired. But you let her walk out of the door with a retirement. I don't quite understand. How do you explain this to your own shareholders?

I don't understand. You keep saying "the board, the board" as if these are strangers that you met in a dark alley. Under the bylaws of Wells Fargo, and I'm quoting here, "The chairman shall preside at all meetings of the board." You were able to make changes. Why can you not make a change here?

All right. So we'll do this your way. Our letter asked a number of questions about clawbacks of Ms. Tolstedt's and other executives' pay, including yours. Wells Fargo's answer to our letter was just basically you punted, that the decision would be up to the board. The same punt you've given here. So you're the chairman of the board. Let me ask it this way: will you personally support clawing back all or part of Ms. Tolstedt's pay?

So you have absolutely no opinion on this?

You're not going to opine? So you're going to say, "Go out there, defraud, cheat, lie, steal, and I have nothing to say about whether or not you ought to still be getting your bonus."

But you say if you do, you can count on Chairman Stumpf not to stand up and say you shouldn't get your incentive bonus.

So I guess I can ask this question again: will you personally support clawing back any or all of the pay for the person in charge of compliance, someone we haven't talked about much today, the person who is supposed to be responsible to make sure that the bank is following the law? Will you have any recommendation about that person?

You are going to have no recommendation at all, ever, at any point in this process? Whatever the board accepts and whatever they do, I will accept and I will support.

You know, you accepted all along as this fraud built up, this massive fraud, you accepted all of the performance bonuses based on the cross-selling that is at the heart of this. You watched your own stock go up by more than $200 million based in part on exactly this massive fraud. You got out and you pumped it to Wall Street, and you said to Wall Street, "Hey, we are doing such a great job cross-selling here at Wells Fargo, you should tell everybody to buy our stock." And now you turn around and say, "I shall remain passive and simply accept what Wells Fargo wants to do." You know, in 2008, Wall Street promised change, but it looks like it is business as usual. A giant bank cheats the little guys, and the executives line their own pockets. Mr. Stumpf, you make it clear that Wall Street won't change until we make it change. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Mr. Stumpf, depriving us the opportunity to raise our gaze and meet the needs of the American people. Unless you have bipartisan consensus, impeachment is a divisive issue in the country. Many people would think it's being done for political reasons. Nancy Pelosi, May 2018. And here we are in the most partisan presidential impeachment in American history. Matter of fact, when we opened the inquiry, no Republicans voted with the Democrats, and you even had Democrats voting with us in the only bipartisan vote to shut down this impeachment. And that brings us to your role, Mr. Goldman. Are you here as a partisan advocate for the Democrat position, or are you here as a nonpartisan investigator of the facts?

I'm here to present the report that we did on our investigation, which was totally and completely reliant on the actual evidence that we uncovered, the witness testimony and the documents.

Are you a partisan?

I am not a partisan, Mr. Caster.

How long have you worked for the House?

Since 2005.

And same question, Mr. Goldman. For the House?

Since earlier this year.

Mr. Caster, do you make political donations?

I don't remember any.

Mr. Goldman, same question. Do you make political donations?

I do, sir. I think it's very important.

Matter of fact, you've given tens of thousands of dollars to Democrats, right?

Sir, I think it's very important to support candidates for office.

Have you given over $100,000?

I just want to know the number. I don't really care the basis.

Have you given more than $100,000 to Democrats?

The basis? I just want the number.

So it's tens.

Mr. B, do you know how much money Mr. Burke has given to Democrats?

I don't know.

And it would surprise you? More than $100,000, Mr. Gates. I'm here to talk about this report.

So you gave tens of thousands. Mr. B gave hundreds of more than $100,000. Do you think if you'd given more money, you might have been able to ask questions and answer them like Mr. Burke did? I guess it's something you're still pondering. Mr. Caster, have you ever tweeted anything at the president?

Now, Mr. Goldman, same question.

I have made a number of tweets in my private capacity before I came to this job, when I was working in the media, yes.

Matter of fact, this is one of those tweets, right? And you said, "Nothing in the dossier is proven false." But in fact, the dossier said that there was a Russian consulate in Miami when there isn't. The dossier said that Michael Cohen had a meeting in Prague when he didn't. The dossier said that Michael Cohen's wife was Russian; she's in fact Ukrainian. And so, as we sit here today, where you, I guess, got a tweet mentioning a pee tape, presenting yourself not as a partisan hired by the Democrats to pursue the president, do you regret this tweet, sir?

I would be happy to put my investigation up with any of the nonpartisan investigations.

I just want to know if you regret the tweet, Mr. Goldman. During my 10 years as a federal prosecutor, you regret it? I hope you read the evidence and I think you can judge. You either regret it or you don't regret it, Mr. I guess you don't want to answer the question. You know what, Mr. Chairman? Earlier in this hearing, you said in your opening statement that there is nothing more urgent than impeachment right now. This is the most urgent thing we could possibly do. You know what? If you're a senior right now and you can't afford your prescription drugs, that's more urgent than this. If you're a manufacturer wanting to dominate the Western Hemisphere with the passage of the USMCA, that is more urgent. If you're a farmer who wants to open markets so that your family can survive and thrive, that is a lot more urgent than this partisan process. If you're a desperate family member watching someone succumb to addiction, solving the opioid problem probably more urgent than this partisan impeachment. If you're a member of the next generation dealing with the challenges of extinction and climate change, a budget that's out of control driving up the credit card of young people in this country and what they'll have to pay back as a consequence of our poor decisions, likely more urgent. But House Democrats have failed at all of these things. Matter of fact, I'd say the only thing under the Christmas tree for most Americans would be a lump of coal. But I think they're against coal too. The only thing under the Christmas tree for Americans would be impeachment and investigations. I've heard over and over Democrats say that this is all about the president's personal interest and that he abandoned the national interest. And it begs an analysis of how the nation is doing. In November, 266,000 jobs created, 80,000 over the average. Half a million more manufacturing jobs in the Trump presidency. 700,000 construction jobs. We are doing better than ever before. The American people are thriving. Why won't you help us move along the critical issues that are far more important than your partisan impeachment? Gentleman's time has expired.

Mrs. Celine, let me begin by dispelling the claim that Mr. Gates just made. This has been one of the most productive congresses in modern history. We've passed nearly 400 pieces of legislation that respond to the urgent priorities of the American people: driving down health care costs, raising wages for the American worker, responding to gun violence, providing equal pay for equal work, responding to the climate crisis. 275 of those bills are fully bipartisan, and 80% of those bills are sitting on the Senate majority leader's desk awaiting action. So we have, we will continue to deliver on the important priorities of the American people. But we were also elected...

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