Some time ago my colleagues agreed to a suggestion I made about having staff put our banking services contract out for bid. While the then-current provider, Wells Fargo, had been providing services for enough years that it was good practice to re-bid the service, there was a more important reason to do so. At least for me.
Because it was Wells Fargo, and they’d been caught opening millions of fake accounts in order to make money off unsuspecting customers.
At last Monday’s Council meeting staff presented the results of the bidding process, recommending the Council award a five year contract (with renewal clauses) to…wait for it…Wells Fargo.
I was, needless to say, pretty disappointed in this recommendation. Consider the following quotes from various news reports about the scandals at Wells Fargo (emphases added):
- “…[Wells Fargo] paid out more than $4 billion in settlements and fines since September 2016…”
- “…Wells Fargo branch employees opened perhaps millions of fake accounts without customer knowledge.”
- “…much of it stemming from problems that came to light following the sales scandal [i.e., the opening of those fake accounts].”
- “…problems have emerged in nearly every major business in the bank.”
- “…it sold unnecessary insurance coverage to auto-loan customers and charged improper fees to mortgage customers.”
- “…[Wells Fargo is] in the process of refunding customers tens of millions of dollars related [insurance products], which also include pet insurance and legal services [geez, pet insurance?!? how low can you go??].”
These are not the signs of one-off mistakes or a small group of rogue employees. These are the signs of deep-seated, pervasive unethical behavior (note: I am not arguing that every Wells Fargo employee was behaving unethically — just that enough were to call into question the ethics of the entire organization).
Interestingly, the reason Wells came out on top of staff’s analysis is because (a) the ranking criteria did not include any consideration of unlawful or unethical behavior and (b) bids had to be “plug compatible” with the way the City currently handles its financial activities (i.e., requiring changes to existing procedures and processes was a down check). Which, as an aside, kind of gives a leg up to whoever happens to hold the current contract.
The Council voted 4 to 1 to accept staff’s recommendation, and award the contract to Wells. That decision may or may not be reversible (many of our decisions have to be voted on twice, by law, to come into force, but I don’t know if this is one of those). But even if it can be changed, it’s unlikely to be reversed without public outcry.