Does Wells Fargo really care about Seattle’s opt out?
The City of Seattle recently opted to sever its ties with Wells Fargo bank in a symbolic action opposing the Dakota Access Pipeline. It was touted as a blow to businesses funding the controversial project.
But what does Wells Fargo think?
“To be quite candid … from our standpoint, I don’t see any impact per se,” said Mary Knell, Wells Fargo’s commercial banking CEO for Washington state.
Knell downplayed Wells Fargo’s role in the pipeline to KIRO Radio’s Jason and Burns Show.
“The total financing for the pipeline itself is almost $4 billion, of which Wells Fargo is one of 17 banks participating in the facility,” Knell said. “Our portion is roughly less than 5 percent — it’s roughly $120 million. We play a very small role in the overall financing of the Dakota Access Pipeline.”
The pipeline aims to transport oil 1,172 miles from North Dakota to Illinois — crossing under the Missouri River, particularly Lake Oahe. The Standing Rock reservation relies upon the river and the lake as a source of water. An alternative route that would have taken the pipeline another direction was previously rejected because of the potential for water contamination.
The pipeline has therefore been controversial and has resulted in months of protests. Seattle jumped on board with its own demonstration by removing its business from Wells Fargo.
Seattle and Wells Fargo
But as far as Wells Fargo is concerned, according to Knell, it’s not as much of a demonstration as the city implies.
“Our role in the pipeline itself is very small, so for that to be one of the main reasons to sever ties, we’re very disappointed,” she said.
Knell said that the city’s recently passed bill, which prevents it from renewing its contract with the bank, goes into effect in 2018 — when the contract expires. The previously boasted $3 billion being taken away from the bank, is more like $10 million. It’s a lot of money to the average Joe, but for a bank — not so much.
“The $3 billion only represents the volume of receipts,” Knell said. “The actual deposits maintained by the city are in the $10 million range. At this point, I don’t anticipate there will be any material impact. We still continue to support local businesses and to continue to hire bankers and add to our teams. Already through the middle of February, I’ve already hired nine additional people.”
In Seattle, Knell argues, Wells Fargo is a socially responsible company. Knell said that she recently gave a $450,000 grant to the UW Foster School of Business for its clean technology and innovation program. The bank also gave $2 million to provide solar power to low-income King County homeowners.
Yet the bank invests in all energy, and Wells Fargo is still a lender to the Dakota Access Pipeline.
“I frankly don’t see much of a correlation between the action taken relating to the Dakota Access Pipeline,” Knell said. “That pipeline is very far from Seattle.”