Divesting millions of dollars from Wells Fargo will take Santa Monica more than a year, according to a new report from the City’s director of finance.
Less than two weeks after the City Council endorsed a plan to break ties with the bank over past fraud scandals and the financing of the Dakota Access Pipeline, the City’s finance department is working diligently to withdraw funds, terminate contracts and sell investments. Yearly transactions with the banking behemoth tally around $1 billion including deposits and payments, according to the City’s public information officer.
The finance department has already begun drafting a new request for proposal, or RFP, to recruit a different bank and expects to issue the request as early as next month. Once a new bank is selected, the City will have to transfer funds and make changes to direct deposit accounts that flow in and out of the City’s massive account.
The City has already stopped using Wells Fargo as a broker for investments. Immediately selling current bonds with the bank valued at $4.6 million resulted in a loss of $120,000.
A spokesman for Wells Fargo’s West Coast division says the divestment is an empty gesture.
“Focusing on one out of millions of loans the bank makes to homebuyers, small businesses and companies in Santa Monica and beyond may generate some politically symbolic media coverage, but it highly unlikely to have any impact on the building of the pipeline,” Paul Gomez said.
A total of 17 banks provided credit to build the pipeline, including Wells Fargo, Bank of America, JP Morgan Chase, Compass, HSBC, Citibank and Morgan Stanley. Wells Fargo contributed $120 million out of $2.5 billion in financing, or less than 5 percent of the total funding, according to Gomez.
“We have also banked the Standing Rock Sioux and some 200 other Native American Tribes across the country,” Gomez said. “In fact, we have met with the Standing Rock Sioux leadership a number of times, including earlier in February, in order to better understand their concerns.”
With several West Coast localities like Seattle, Davis and the entire University of California system divesting hundreds of millions of dollars and terminating contracts with Wells Fargo, the battle lines over the Dakota Access Pipeline have shifted from frigid protests intended to physically block construction to balance sheets and paperwork.
Since August, a camp — known as Oceti Sakowin — near the Standing Rock Indian Reservation has been the main site for demonstrators trying to thwart construction of the final section of the $3.8 billion pipeline. The Standing Rock Sioux and Cheyenne River Sioux, whose reservation is downstream, say Dakota Access threatens their drinking water and cultural sites.
Dallas-based pipeline developer Energy Transfer Partners disputes the protestors’ claims. When complete, the pipeline will carry oil through the Dakotas and Iowa to a shipping point in Illinois. Army Corps of Engineers Col. John Henderson says taxpayers will fund cleanup of the protest site, which could take a month and total as much as $1.2 million.
As Santa Monica took a fiscal stand, about 150 protesters marched out of the soggy protest camp in North Dakota Wednesday, singing songs and playing drums as they packed-up under Federal orders to leave or face jail time. Once home to thousands of protestors, the camp has officially been shut down.
Thursday morning, National Guardsmen and law officers entered the protest camp and arrested about two dozen people, placing them in vans headed to jail. Most protesters peacefully left the camp on Wednesday, setting fire to makeshift structures left behind in a ceremonial final act of defiance.