In light of the recent revelations of Wells Fargo’s customer defrauding and its massive financial investment in the destructive Dakota Access Pipeline project, Councilmember Kshama Sawant (District 3, Central Seattle) unveiled legislation to better able the City to contract with socially responsible banking institutions. Additionally, Sawant has introduced a City budget amendment to close a $2 million corporate tax break that has allowed international investors to drastically underpay their City Business and Occupation (B&O) tax for the last seven years.
“After years of scandals, Wells Fargo, the bank that the City of Seattle currently contracts with, has just been caught defrauding millions of people. Wells Fargo has fired 5,300 of the bank’s lowest-paid workers over the fraud, but not a single senior executive has been held accountable,” said Sawant.
Wells Fargo manages depository services for more than $3 billion of the City’s money. Wells Fargo’s five-year contract with the City is scheduled to end in 2018. Rather than renewing the Wells Fargo contract, Sawant’s legislation aims to amend the Seattle Municipal Code to greatly increase the City’s ability to contract with those institutions that engage in fair and socially responsible business practices.
“Elected officials need to respond to the legitimate public outrage by working to terminate the City of Seattle’s relationship with corporations like Wells Fargo that shamelessly exploit working people, especially the most vulnerable amongst us,” said Sawant. “This latest scandal comes on the heels of revelations that Wells Fargo had systematically charged African American and Latino customers higher fees or pushed them into subprime loans.”
Wells Fargo is also one of the financial corporations bankrolling the Dakota Access oil pipeline running through the region around the Standing Rock Sioux Reservation in North Dakota.
“With its nearly $500 million invested in the pipeline, Wells Fargo’s insatiable thirst for profits implies an utter disregard for native sacred land, water, and the planet’s future. Thousands of courageous tribal and environmental activists are protesting at Standing Rock, in the face of militaristic repression and crackdown. Elected officials have a moral obligation to stand with them,” Sawant added.
Sawant has also separately introduced an amendment to the 2017 City budget that would end the B&O tax break for corporations engaged in international investment management services. Closing this tax break would generate an estimated $2 million that could instead be used to support Seattle’s homeless population, provide services to survivors of domestic violence, support enforcing tenants’ rights, and other urgent and socially necessary causes. Approximately 40-50 companies are beneficiaries of the corporate tax break.
“It’s outrageous that wealthy companies doing international investing in Seattle pay a lower tax rate than a small independent coffee shop. They get a tax break while people sleep on our streets. The Council passed this corporate tax break unanimously in 2009. I hope the Council will join me unanimously in ending this blatant corporate welfare,” added Sawant.