SEATTLE – Wells Fargo has offered the city of Seattle the chance to break its contract now, after the city council voted to cut ties with the banking giant over its role as a lender to the Dakota Access pipeline project as well as other business practices.
Councilmembers voted unanimously Feb. 7 to direct officials to end the city’s contract with the San Francisco-based bank once it expires at the end of 2018.
Supporters had urged the council to send a broader message to oppose the pipeline, stand with indigenous people and find a bank that aligns with the city’s social values. Some hoped it would set an example for other cities to do the same.
Phillip Smith, head of government and institutional banking for Wells Fargo, called the decision disappointing in a letter Tuesday to Seattle Mayor Ed Murray and two councilmembers. He said it could have unintended consequences for taxpayers by limiting the city’s banking choices.
Smith also pointed out that other state-approved banks that bid for the city’s banking contract in 2012 are also involved in financing the pipeline. Wells Fargo has said it is one of 17 involved in financing the pipeline and is providing $120 million of the $2.5 billion.
“I see this move as questionable governance and a dangerous precedence for taxpayers,” Smith said in an interview.
Through a representative, Councilmember Tim Burgess, who co-sponsored the measure, declined comment Tuesday.
State law limits which banking firms the city can hire. Those restrictions and other requirements limit the banks that can provide banking services to the city to a handful of the nation’s largest banks, according to the city’s Department of Finance and Administrative Services.
Wells Fargo offered in its letter to break the city’s contract immediately and without any related fees. The bank also said it has been “a responsible corporate citizen in Seattle” and paid substantially more in local taxes than it has earned on its banking contract.
Local journalism is essential.
Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.
Subscribe to the Coronavirus newsletter
Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.