Municipal Court Reforms Gaining Momentum, But How Far Will They Go?
St. Louis Post Dispatch - February 2, 2014, by Jeffrey Kohler - While law professors and activists call for dramatic reforms for municipal courts in St. Louis County — including getting rid of...
St. Louis Post Dispatch - February 2, 2014, by Jeffrey Kohler - While law professors and activists call for dramatic reforms for municipal courts in St. Louis County — including getting rid of them — more moderate changes are being pushed by an ad-hoc committee of municipal court officials.
The Municipal Court Improvement Committee, mostly judges, prosecutors and court officials, has introduced several proposed changes, according to a memo written by its chairman, Frank Vatterott, a defense attorney and veteran municipal court official who has been a judge in Overland since 1991.
But a rival group says the proposals do not go far enough and said the committee was “the foxes guarding the henhouse.”
The committee’s first change would be to encourage the courts to adopt uniform schedules for fines, Vatterott said. Several courts vary widely in the fines assessed for the same charge, which, he said, was unfair.
Next, the committee would push for a uniform schedule for bonds, although it still polling the courts to determine how significant the problem is.
Then the committee would make volunteer lawyers available to offer legal advice to municipal court defendants. The committee also would advocate for cities to establish municipal court fees to pay for public defenders.
The committee also proposes expanding the use of community service in lieu of fines for ordinance violations. The change could end the problem of poor people burdening their families with requests to help pay fines. The committee also proposes setting up a uniform system for allowing financially strapped defendants to pay fines in installments.
The changes would be voluntary, but in a memo to the county’s 79 municipal courts, Vatterott urged full participation. “Keep an open mind and consider the beauty of uniformity,” he wrote.
The next step would be getting courts to agree to the changes.
Vatterott said the courts should bring about the reforms, not activists, law professors or the state Supreme Court. “Our judges and our court personnel are the road warriors. We know best how to improve our courts.”
The committee’s ideas seem to have support from higher in the state courts.
In a letter to the committee, Maura B. McShane, presiding judge of the St. Louis County Circuit Court, which oversees the municipal courts, wrote that municipal court judges should support the committee “to bring integrity and fairness to the court.”
“I agree with your committee that our municipal courts should consider adopting changes voluntarily and as soon as possible wherever they need to be made to restore confidence in our courts,” she wrote.
Roy L. Richter, a judge with Missouri Court of Appeals Eastern District who serves as chairman of a committee that trains municipal judges, wrote in a letter to the committee that most municipal courts were operating properly and the media’s coverage of them has been inaccurate. But he urged court officials to make a good system better.
Missourians Organizing for Reform and Empowerment, a grass-roots group that has rallied for municipal court changes, on Monday questioned the wisdom of leaving reform to the lawyers and judges who benefit most from the money-making aspects of the system.
Jeff Ordower, executive director of the group, said while Vatterott’s committee has offered some ideas that they agree with — such as creating standard fines and allowing people who cannot pay to do community service — the proposals do not go far enough.
“It starts with the police and how they profile and then it ends with the justice system, where you have a cabal of lawyers and judges who benefit from that,” he said. “We need to change the status quo, shake it up and abolish it.”
Ordower’s group held a press conference outside the office of St. Louis County Executive Steve Stenger, after releasing its own proposals in a five-page report: “Transforming St. Louis County’s Racist Municipal Courts.”
MORE has proposed eliminating “failure to appear” charges altogether, challenging the notion that “if you roll a stop sign you’re now a hardened criminal and should be facing jail time,” Ordower said.
The group is also calling on the courts to provide “real amnesty” by eliminating their backlog of fines on old traffic cases.
And jail time should not be an option for nonviolent municipal offenses, the group argued. MORE has also proposed that fines be proportionate to a person’s ability to pay.
While Vatterott’s committee wants to bring in volunteer lawyers to advise people on court days, MORE wants public defenders appointed routinely for indigent defendants, just like in state court.
Vatterott said he did not want to comment on the MORE report.
MORE pointed out that someone can be charged with failing to appear in one municipal court even if it was because they were already locked up on a charge from another municipal court.
“If I’m physically unable to appear because I’m in the custody of another court, then there should be some kind of dispensation for that — and there’s not, and that happens to many, many people,” said Derek Laney, an organizer with MORE who said it happened to him recently.
The group pointed out that it is impossible for a person who is arrested on a traffic warrant to take care of all their outstanding warrants from multiple municipalities without being shipped from one jail to the next.
MORE wants four regional courts to handle all of the county’s municipal cases, similar to the three courts that are now used for the county’s unincorporated regions.
The group held its press conference outside Stenger’s office to pressure him to pressure the courts.
Stenger responded with a statement: “During my campaign, I talked about the need for changes in the courts located in St. Louis County municipalities. Among other things, I would like to see these courts reduce fines and costs for indigent defendants. The courts also need to give some latitude regarding warrants issued for failure to appear. I will support any reasonable state legislation that addresses the current problems.”
Some drivers interviewed Monday were unconvinced municipal courts were anything but revenue generators. Nerissa Grigsby of Olivette said she recently mailed in a check for a speeding ticket in St. Ann. She said she hadn’t been speeding, and said she couldn’t reach court officials to discuss the case. Speaking about proposals to abolish municipal court, she said, “I totally agree with that.”
Sean Bailey, 35, is homeless with a 3-year-old daughter. He just got a part-time job in the restaurant business and is staying with a friend in south St. Louis. While trying to get his life back on track, municipal court fines are both far from his mind and an unavoidable reality. He said any reforms of the municipal courts would be welcome, but they’d have to be far-reaching — like the ones MORE is proposing — to make a difference.
Bailey had tickets in Ferguson and Florissant for which he accumulated fines totaling $1,950.
Bailey said he’s tried to show up to court and pay when he could but missed court when he couldn’t and that just resulted in more fines. More recently he tried to participate in an amnesty program in Florissant, but the court “wouldn’t budge” from a $100 fee to cancel his arrest warrant.
He couldn’t afford it, so his warrant remains.
“The reason these people aren’t paying like everybody else is simply because they don’t have it,” he said. “Nobody wants to go to jail. I think a fresh start would definitely help.”
Steve Giegerich of the Post-Dispatch contributed to this report.
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Stringer nails contractor who stole $1.7 million from immigrant workers
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Stringer nails contractor who stole $1.7 million from immigrant workers
After getting away with stealing money from his immigrant employees’ paychecks for years, a major contractor who worked city projects across the five boroughs was slapped on Monday with a $3.2...
After getting away with stealing money from his immigrant employees’ paychecks for years, a major contractor who worked city projects across the five boroughs was slapped on Monday with a $3.2 million fine and barred from doing business with the city and state for five years.
A six-year investigation carried out by the New York City Comptroller’s Office used undercover video, subpoenas, union records and a city agency paper trail to uncover the kickback scheme, Comptroller Scott Stringer said in a statement on Monday.
Stringer said K.S. Contracting Corporation and its owner, Paresh Shah, cheated dozens of immigrant workers out of their pay and benefits.
Shah told the city he was paying his workers the prevailing wages required under the New York State Labor Law. In reality, however, only about half of the workers received paychecks. Those who did were required to cash the checks and then surrender the money to company supervisors. Those supervisors would take a cut and then redistribute the leftover cash to employees , including those who did not receive paychecks, paying them at rates significantly below prevailing wages.
Before getting their money, many of the workers were required to sign a paper stating that they were, in fact, being paid the prevailing wage.
One supervisor was surreptitiously filmed in the act of counting workers’ surrendered cash in the front seat of his car. (See video at brooklyneagle.com.)
K.S. Contracting reported that it paid its workers combined wage and benefit rates starting at $50 per hour (or roughly $400 a day plus benefits) but actually paid daily cash salaries starting at just $90 per day and going, in some cases, as high as $200.
Part of the paper trail the Comptroller’s Office investigators uncovered in building a case against K.S. Contracting Corporation. Photo courtesy of the Office of the ComptrollerPart of the paper trail the Comptroller’s Office investigators uncovered in building a case against K.S. Contracting Corporation. Photo courtesy of the Office of the Comptroller
Between August 2008 and November 2011, the company cheated at least 36 workers out of $1.7 million in wages and benefits on seven New York City public works projects. The majority of the workers were immigrants of Latino, South Asian, or West Indian descent.
Stringer said that the need to stand up for immigrants was especially important in the time of President Trump.
“Contractors might think they can take advantage of immigrants, but today we’re sending a strong message: my office will fight for every worker in New York City,” he said.
The brazen scheme had gone on for years; an employee first filed a complaint with the office in May 2010.
K.S. Contracting was named as one of the worst wage theft violators in New York in a report by the Center for Popular Democracy in 2015. The full details of what was going on came out at a four-day administrative trial in May 2016.
The company, incorporated in New Jersey, was awarded more than $21 million in contracts by the city’s Departments of Design and Construction, Parks and Recreation and Sanitation between 2007 and 2010. Projects included the District 15 Sanitation Garage and the Barbara S. Kleinman Men’s Residence in Brooklyn, the Morrisania Health Center in the Bronx, the 122 Community Center in Manhattan, the North Infirmary Command Building on Rikers Island, Bronx River Park, and various city sidewalks in Queens.
K.S. Contracting is not the only contractor to rip off its immigrant employees. Since taking office in 2014, Comptroller Scott M. Stringer’s Bureau of Labor Law has assessed more than $20 million and barred 40 contractors from state and city contracts due to prevailing wage violations, according to the Comptroller’s Office.
A number of workers’ rights groups and immigrant organizations praised the comptroller’s investigation.
"At a time when exploitative employers are feeling increasingly emboldened by Trump’s hateful rhetoric, it is imperative that our city's leaders are taking a strong stance in defense of immigrant workers,” Deborah Axt, executive director of Make the Road New York, said in a statement.
“Too many employers in New York City exploit minority and immigrant workers. And it’s no secret that many immigrant workers are fearful of retaliation for standing up for their rights, especially in an environment where they are afraid of being deported,” said Lowell Barton, organizing director of Laborers Local 1010, LiUNA!
By Mary Frost
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One vote will turn America’s path away from liberal socialism
WASHINGTON, Oct. 17, 2015 – What difference will my vote make? Too many will say: I am only one person. When asked why they do not exercise our constitutional...
WASHINGTON, Oct. 17, 2015 – What difference will my vote make? Too many will say: I am only one person. When asked why they do not exercise our constitutional right to vote for our governmental representatives they wonder if their one vote makes a difference.
But that is foolish as history has shown that “one person” can prevail.
It was one brave soldier standing alone during a mass protest who stopped a column of armed tanks in China on Tiananmen Square in 1989; one frail man named Mahatmas Gandhi who was the driving force behind banishing the British Empire from India; one conservative, the Rev. Dr. Martin Luther King, who was the black community’s conscience when it needed someone to articulate the horrors inflicted upon blacks by a racist Democratic South.
Even before these 20th century [peaceful] activists, back in the 1860s, there was one conservative black Frederick Douglass. Douglas stood out as a champion of an enslaved people, the fight for their civil rights.
Frederick Douglass made it his life’s mission to rally others to join in with him in the liberation of his oppressed people. Born a slave, he died a millionaire in today’s terms.
Other men and women of courage, conviction and destiny have made a difference: Harriet Tubman, Rosa Parks, Booker T. Washington, Thaddeus Stevens, Charles Sumner.
Today America is in need of such sons and daughters, born of virtue, courage and conviction to take the smallest action. They need to vote.
Many see that the United States is drifting towards the edge of ruination. At the helm is a president who happens to preside over our moral and economic collapse while pressing on relentlessly with the left-wing agenda. Same-sex marriages, illegal aliens, an under-employed America and a potential $19 trillion deficit do not bode well for our future and this country’s stability.
Barack Hussein Obama has met with numerous world leaders, many of them not so friendly to this country, either then or now.
Yet, in his adopted home city of Chicago, where gangland shootings take place regularly, where body bags fill up, by the hour, where black on black crime runs rampant, this president has yet to seriously address the issue.
As the first black president, he could have met these gang leaders at a presidential sponsored summit to appeal to them on a personal level, and to impress upon them how dangerous and detrimental their life of crime is impacting their own neighborhoods in a negative way.
How bad is it in Chicago? Just over the Fourth of July weekend of this year, alone, 10 people were killed and 55 wounded by gunfire. Shootings rose by about 40 percent during the first three months of this year, according to March statistics released by Chicago Police Department. The mayor, Rahm Emanuel, seems clueless on how to decrease these figures.
Make no mistake; this is largely black on black crime. Yet, when a white person, or a white cop, kills a black anywhere in America, the president cannot get to the podium fast enough to denounce it; neither can race baiters such as Jackson and Sharpton.
This is when the clueless come out with signs chanting “Black Lives Matter.” They ignore the subject of innocent black fetuses being aborted, thanks largely to the efforts of Planned Parenthood Founder Margaret Sanger and uninformed blacks who work for and support this organization.
Though serving his last year in office, the president has opted to focus on, and press for, immigration reform. This is an agenda that will further impact the black community in a negative way in terms of employment opportunity.
African-Americans who have achieved higher-education degrees, a key investment leading to the middle class, still find themselves more likely to face long-term unemployment than their white, Hispanic and Asian counterparts, according to the Center for Popular Democracy.
Some believe the president’s end game is granting amnesty for over 30 million illegals and resettling hundreds of thousands of Muslims here in the United States. Not surprisingly, his party supports this president’s efforts while the Republican leadership does not.
And the Supreme Court — they have been missing in action for the past three years when it comes to defending, preserving and upholding the United States Constitution and the laws of the land.
So you ask, What can we do about it?
Americans can express their dismay and anger by voting in the next primary and election. Only then can we make a difference. History has shown that one man can effect positive change. Conservatives in this country number around 45 million strong, so if all would step up and vote, there’s immense power in those numbers.
Up until now, politicians, Sunday morning news pundits and Washington bureaucrats have an open microphone to sway voters, thanks to 24-hour news programs.
It’s time for Americans to really listen to what is being said and recognizing what is unrealistic, not sell low-information voters a bad bill-of-goods.
Forbes writes (We’ve Crossed The Tipping Point; Most Americans Now Receive Government Benefits):
..perhaps 52 percent of U.S. households—more than half—now receive benefits from the government, thanks to President Obama. And Mr. Entitlement is just getting started. If Obamacare is not repealed millions more will join the swelling rolls of those dependent on government handouts.
Conservatives have long dreaded the day when the U.S. crossed the halfway mark because of all the implications for individual and fiscal responsibility. As Benjamin Franklin reportedly said, “When the people find that they can vote themselves money, that will herald the end of the republic.” They learned that from the 2008 election and turned out in big numbers again in 2012.
One popular agenda being pushed by Bernie Sanders and Hillary Clinton is free college tuition – Bernie wants it at every academic institution, Clinton is calling for free public colleges.
Remember what Franklin said above:
“When the people find that they can vote themselves money, that will herald the end of the republic.”
And college tuition is off the charts, most can agree. So maybe free college tuition is a great idea; however, no one is explaining who is going to pay for the professor’s salary, buildings, campus maintenance, food, books and the necessary technology infrastructure necessary to support a child seeking the college experience.
Look at the reasons parents choose private over public schools. They want a better eduction, higher test scores, smaller class size and more. If parents see that many [not all] public schools fail their children, why would we want to see college follow that same model?
And how many of those students taking that free college will be looking not for education but a continuation of the high school experience and a delay of entering the work force. College should be something a student works for with grades, service participation, sports and learning to be a well-rounded person – a lesson that begins in the home.
Now it is our turn to voice our opinions at the ballot box, for conservatives, independents and libertarians to band together to make a difference in saving this republic. Even if the person presented by the GOP is not the person you want over others,
…we still need to vote for the party otherwise, liberals and progressives continue to rule the day.
The path will not always be smooth and easy. Most things worthwhile ever are. Just remember this.
As former military men, George Washington fought the good fight, Andrew Jackson fought the good fight, Ulysses S. Grant fought the good fight and Theodore Roosevelt fought the good fight while serving in the armed forces.
Professional military leaders such as Adm. Chester Nimitz and Gen. George S. Patton fought the good fight, as well, and all of these men did it against overwhelming odds and all of them prevailed.
Some say, and truly believe, that the American political system is rigged, that the powers that be, like powerful fathom puppet masters, have often manipulated the results of elections so that it does not matter what the voter does, they still pull the strings.
It doesn’t matter who the president is when Valerie Jarrett is pulling the strings.
There is some truth in every urban legend, but it will take voters to weed out these myths and uproot these puppet masters and make the necessary changes to insure the integrity of our political system and our republic. We must all make a stand.
This is a nation with a history of breeding courageous fighters, and right now America needs fighters.
The next generation is counting on you showing up at the polls. including your children and grandchildren. Your decision to get involved and vote will impact their future in many ways.
That is why now is the time America. Not next time, but now!
Unless conservatives from all corners vote to change the ownership of the White House, there may not be a next opportunity to save America.
Source: Communities Digital News
NYC pagará por abogados en casos de deportación
El Diario - July 18, 2013, by Claudia Torrens - Nueva York se prepara para dar otro paso en su tradición de ayuda a inmigrantes: planea pagar los abogados de oficio que necesitan cuando se...
El Diario - July 18, 2013, by Claudia Torrens - Nueva York se prepara para dar otro paso en su tradición de ayuda a inmigrantes: planea pagar los abogados de oficio que necesitan cuando se encuentran en una corte de inmigración y enfrentan la deportación.
Algunos inmigrantes con o sin papeles en la ciudad que enfrenten la expulsión de Estados Unidos podrán a partir de finales de este año o el 2014 presentarse frente al juez de inmigración con un abogado de oficio pagado con fondos municipales, reduciendo así sus posibilidades de ser deportados porque ya no estarán solos en la corte. Activistas, un magistrado federal y funcionarios locales planean anunciar el viernes que la ciudad ha destinado $500,000 a financiar un programa piloto que ofrecerá representación legal a inmigrantes.
Brittny Saunders, de la organización Center for Popular Democracy, dijo a The Associated Press que esta es la primera vez que un programa así se implementa en una municipalidad de Estados Unidos.
"La intención que tenemos a través de este programa piloto es lograr información sobre los beneficios que la representación legal supone tanto para un individuo en detención y enfrentando la deportación como para su familia, su comunidad y la ciudad entera", dijo Saunders. "Esperamos que este programa sea un modelo para otras comunidades alrededor del país".
Inmigrantes que acaban en las cortes de inmigración y que enfrentaban la deportación no tienen derecho a ser defendidos por un abogado de oficio. Pueden contratar a un abogado privado pero muchos inmigrantes no tienen el dinero para pagar por ese servicio. Es por ese motivo que la ciudad, varios activistas y un juez federal interesado en el tema llamado Robert Kaztmann han unido esfuerzos para ofrecer ayuda a inmigrantes en esta situación.
Saunders dijo que en el estado de Nueva York una media de 2,800 inmigrantes se encuentra anualmente en proceso de deportación sin acceso a asistencia legal.
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Press Release New Report Reveals Unscrupulous Employers Involved With Wage Theft in New York
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Press Release New Report Reveals Unscrupulous Employers Involved With Wage Theft in New York
Today, Center for Popular Democracy Action releases the first major report on New York wage theft since 2009. The report, ...
Today, Center for Popular Democracy Action releases the first major report on New York wage theft since 2009. The report, By a Thousand Cuts: The Complex Face of Wage Theft in New York, identifies 11 ‘bad actors’, which are employers with a history of wage theft that is either particularly egregious or that exemplifies a broader trend in key New York sectors.
The companies highlighted in the report have a history of committing various wage theft violations, such as denying benefits, failing to pay overtime or minimum wage, making illegal deductions from pay checks, telling workers to work off the clock, and misclassifying workers as freelancers or independent contractors to avoid paying benefits.
Despite passage of the Wage Theft Prevention Act of 2010, which gives New York the strongest laws in the nation, an estimated 2.1 million New Yorkers are still victims of wage theft annually, cheated out of a cumulative $3.2 billion in wages and benefits they are owed. The report contains never-before-released testimonies from impacted workers.
Protesters from The New York Coalition against Wage Theft gathered at 11 a.m. in front of a worksite run by asbestos removal company New York Insulation Inc., one of the bad actors identified in the report.
“New Yorkers are being cheated out of their hard earned wages, and it has to stop now,” said New York City Comptroller Scott M. Stringer. “The bottom line is that an honest day’s work deserves an honest day’s pay –and if a company cheats workers out of their wages, we will catch them and they will pay. I commend Make the Road New York and the Center for Popular Democracy for issuing this new report and continuing the fight against wage theft.”
“Despite good laws on the books, wage theft continues at epidemic proportions impacting millions of workers each year. It is, in effect, a massive crime wave that costs New Yorkers billions and exacerbates poverty and inequity in our state,” says Meg Fosque, low-wage organizing director at Make the Road.
“Wage theft is a pervasive crime, rather than the practice of a few unscrupulous employers. And, companies build business strategies on the bet that they will never be called to account for stealing their employees’ wages and undercutting high-road businesses. We need robust and resourced enforcement efforts to protect workers’livelihoods and the ability of fair employers to do business,” says Connie Razza, Director of Strategic Research at the Center for Popular Democracy.
"The depth and breadth of the wage theft problem is crippling our economy. The construction industry, tax payers, and workers all equally feel the pain of wage theft. This is not a victimless crime. When responsible contractors operating within the laws of New York State are put at a disadvantage against those ignoring these same laws, we must all unite to fix this problem," says Patrick J. Purcell, Executive Director with Greater New York LECET.
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www.populardemocracy.org The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
Scam Central: Elizabeth Warren Tells Wells Fargo CEO to Resign and Get It Over With
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Scam Central: Elizabeth Warren Tells Wells Fargo CEO to Resign and Get It Over With
Wells Fargo CEO John Stumpf was on the hot seat Tuesday when he faced Massachusetts senator Elizabeth Warren and other angry lawmakers at a Senate Banking Committee hearing designed to investigate...
Wells Fargo CEO John Stumpf was on the hot seat Tuesday when he faced Massachusetts senator Elizabeth Warren and other angry lawmakers at a Senate Banking Committee hearing designed to investigate the bank’s widespread rip-off of its customers.
Warren told Stumpf, who earns $19 million a year: “You should resign... You should be criminally investigated.”
Wells Fargo is the nation’s fourth largest bank by assets and its leading home lender.
Warren’s verbal assault on Stumpf generated considerable publicity. But this issue wouldn’t have surfaced in the first place without the hard work of several grassroots community and labor organizations, especially the Committee for Better Banks, that first brought the scandal to the attention of the media, elected officials and regulators.
Warren demanded both the Department of Justice and Securities and Exchange Commission criminally investigate Stumpf for Wells Fargo’s practice of pressuring its low-level employees to create over 2 million unwanted checking and credit-card accounts without consumers’ knowledge or permission in order to grow the bank’s stock price. Warren reminded Stumpf that during the years Wells Fargo engaged in this “scam,” Stumpf’s own portfolio of company stock increased by $200 million.
She urged Stumpf to return the compensation he received while these practices went on.
“So, you haven’t resigned, you haven’t returned a single nickel of your personal earnings, you haven’t fired a single senior executive,” Warren told Stumpf. “Instead, evidently, your definition of accountable is to push the blame to your low-level employees who don’t have the money for a fancy PR firm to defend themselves. It’s gutless leadership.”
“You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket,” Warren said.
Wells Fargo’s official line is that the employees were acting on their own to skim extra pay from the bogus accounts. Warren questioned Stumpf about the fraudulent accounts, asking how such an operation could have occurred without the knowledge of top management.
Wells Fargo employees say they did so because of what they call the bank’s “sell or die” quota system, which put pressure on employees to engage in these practices in order to keep their jobs. They said it was a routine practice employees referred to as “sandbagging.”
Activists are up in arms over Wells Fargo’s double standard in dealing with its employees. After the scandal was exposed by grassroots advocates, the media, and government regulators, the bank fired at least 5,300 employees and refunded millions of dollars to customers. But bank reform activists are skeptical that so many employees could have acted on their own without the knowledge of higher-up bank executives.
Meanwhile, in July, in the wake of the scandal, Carrie Tolstedt, Wells Fargo’s director of consumer banking, the operation that opened the fake accounts, abruptly left the bank where she had worked for 27 years. She took with her a $124.5 million bonus. After her retirement announcement, Stumpf praised Tolstedt as “a standard-bearer of our culture” and “a champion for our customers.”
Warren criticized Stumpf for failing to withdraw Tolstedt’s bonus (a practice known as a “clawback”) in light of the revelations about her division’s behavior. Stumpf said it was up to the bank’s compensation committee, comprised of board members, to decide whether to rescind Tolstedt’s bonus.
“If you have no opinions on the most massive fraud that’s hit this bank since the beginning of time, how can it be that you get to continue to collect a paycheck?” Warren asked.
Moreover, activists say that the problem goes well beyond Wells Fargo and is an industry-wide scandal.
Ruth Landaverde, a former employee at both Wells Fargo and Bank of America, said the pressure from her supervisors at both banks was so intense she developed a tic in her eye and had trouble sleeping. She told the Associated Press that in order to keep her job she was required to sell four credit cards and four auto loans each week in addition to three home mortgages or refinances.
“I wasn’t going to do something unethical, but the sales pressure was very real,” she said. “I can see why some employees did what they did.”
Landaverde is now a member of the Alliance of Californians for Community Empowerment, a statewide advocacy group that works on housing and banking issues and is a member of the Committee for Better Banks, a coalition of community and labor groups. In an email this week to ACCE members and supporters, she wrote:
“When I worked for Bank of America, I felt uncomfortable when I was given a list of bank customers and told to call them and push new accounts and credit cards that could end up sticking them with unnecessary fees and debt. What’s worse, we were targeting customers in low-income communities of color much more than the customers in more affluent zip codes.”
Landaverde said that “there are still many more banks that have not committed to stop requiring their employees to push unnecessary products in order to keep their jobs. And now, Wells Fargo CEO John Stumpf is throwing his own employees under the bus rather than accepting responsibility for the outrageous high-pressure sales culture that he and other Wall Street executives are creating!”
“I know first-hand that predatory sales exist across the U.S. banking industry,” said Cassaundra Plummer, a former teller at TD Bank and member of the Committee for Better Banks. “At TD bank, sales goals made it impossible for frontline bank workers to help customers find the financial products best suited to them. My manager would encourage customers to take out home equity lines to go on vacation which is the worst financial advice I’ve ever heard. We need to end predatory sales goals across the industry, not just Wells Fargo.”
Last year the Committee for Better Banks delivered a petition signed by more than 11,000 people to Stumpf, along with a letter noting that workers faced “pressures to meet sales quotas under strict monitoring and threat of losing their jobs, often forcing them to push unnecessary products and fees on to their customers, causing them stress and financial hardship,” and that loan servicing departments have been using similar tactics to push consumers toward riskier products they can ill afford.
The group has now launched another petition asking elected leaders in Los Angeles and other cities around the country to ban all city business with banks that force their employees to meet sales goals for high fee products such as credit cards, new accounts and home refinance loans. They say that these incentive programs create a system where bank workers are forced to engage in predatory practices against their professional and ethical beliefs.
“Wells Fargo’s action to eliminate sales quotas is a hard-won victory for front-line bank workers who have been denouncing abusive sales goals for over two years,” said Reuben Traite, an organizer with Committee for Better Banks. “The fact that Wells Fargo turned a blind eye is appalling. But these high pressure sales goals are rampant across big banks and we need to end it across the industry.”
Activists with the Los Angeles chapter of ACCE brought the issue to the attention of the Los Angeles Times, which broke the story in 2013. Once it made the papers, Los Angeles City Attorney Michael Feuer conducted his own investigation and then sued Wells Fargo. All that got the attention of the Consumer Financial Protection Bureau, the federal agency created by the 2010 Dodd-Frank bank reform law.
Last week, CFPB director Richard Cordray, Comptroller of the Currency Thomas Curry, and Feuer announced that they had reached settlements with Wells Fargo over its “major breach of trust.” Wells Fargo agreed to pay CFPB $100 million (the largest fine the agency has ever imposed) in addition to $50 million to the city and county of Los Angeles and $35 million to the Office of the Comptroller of the Currency. Wells Fargo did not admit any wrongdoing in the settlements, although it issued an apology to its customers, promised to revise its sales practices, and agreed to refund consumers for fees assessed on checking and credit cards accounts they didn’t authorize.
Activists point out that the fines being levied against Wells Fargo are a drop in the bucket compared with Wells Fargo’s 2015 profits of $20 billion. It is even less than the more than $200 million in company stock that Stumpf owns. He serves on the board of directors of Target Corporation and Chevron Corporation, and until recently, on the board of the Financial Services Roundtable, a powerful industry lobby group.
The bank’s apology and refunds won’t make the issue go away. Many consumers are suing the bank as are former employees who say they were fired (or forced to resign) when they refused to engage in the fraudulent practices in order to meet the bank’s unrealistic sales quotas.
The issue first emerged in 2013 when the Los Angeles Times uncovered Wells Fargo’s illegal practices. In response to the Times story, Feuer initiated his own investigation and sued the bank, alleging it had “victimized their customers by using pernicious and often illegal sales tactics,” including unattainable quotas that pressured bank employees to “engage in fraudulent behavior.”
The CFPB undertook its own investigation and discovered that Wells Fargo employees opened as many as 1.5 million checking and savings accounts, and more than 500,000 credit cards, without consumers’ knowledge or permission.
The LA and CFPB investigations, the resulting media coverage, and Wells Fargo’s attempt to blame its lower-rung employees for the scandal led five Democrats on the Senate Banking Committee — Sherrod Brown (Ohio), Jack Reed (R.I.), Robert Menendez (N.J.), Jeff Merkley (Ore.), and Warren — to push its Republican chairman, Richard Shelby of Alabama, to holdTuesday’s hearings. They sent Strumpf a letter last week expressing concern that consumers and low-level employees will bear the burden of the bank’s misconduct “while senior executives walk away with multimillion-dollar awards based on what the company later finds out are fraudulent practices.”
The San Francisco-based Wells Fargo has long been a target of bank reform activists for its troublesome track record of risky and reckless behavior. For more than a decade, grassroots groups have challenged Wells Fargo’s racially discriminatory lending practices and aggressive foreclosures. They have picketed at the offices and homes of the bank’s top executives, sued the bank for violating laws against racist mortgage lending, and testified before Congress, state legislatures and city councils demanding that they investigate and rein in Wells Fargo’s troublesome practices.
The activists have primarily been bank consumers and residents of neighborhoods harmed by Wells Fargo’s redlining and other practices. But the two-year-old Committee for Better Banks is comprised of bank employees as well as consumers, representing a new and potentially powerful coalition. Not surprisingly, the Committee for Better Banks is now part of the broader movement to raise wages for service-sector employees like bank tellers to $15 an hour.
The CBB is aligned with the Center for Popular Democracy, a national network of local activist groups that work on housing, banking, and workers rights issues. CPD helped set the stage for the current campaign with its study of bank workers. The CPD report revealed that some of the nation’s largest banks, including Wells Fargo and Citigroup, pressure front-line employees to engage in fraudulent practices to keep their jobs. According to the report, the bank employees try to serve customers responsibly, but feel pressure from higher-ups to meet the quotas.
A report last year by the National Employment Law Center on banking industry wages found that almost three quarters (74.1 percent) of U.S. bank tellers and almost half (44.2 percent) of bank customer service representatives earn less than $15 an hour. The median hourly wage for bank tellers is $12.44. A study by the UC Berkeley Center for Labor Research and Education found that nearly one-third of the families of all tellers are on public assistance. In New York City, the capital of the nation’s banking industry, 39 percent of tellers and their family members are on some form of public assistance program.
Other groups involved in the better banking campaign include Move On, the Communication Workers of America, New York Communities for Change, ACCE, Jobs with Justice, Make the Road, and Americans for Financial Reform, a DC-based watchdog group.
GOP presidential nominee Donald Trump has called for dismantling nearly all of the Dodd-Frank reforms. In contrast, Democratic nominee Hillary Clinton last week touted the Consumer Financial Protection Bureau's “forceful response” to the Wells Fargo scandal, adding that it was “a stark reminder of why we need a strong consumer watchdog to safeguard against unfair and deceptive practices.”
Lisa Donner, executive director of Americans for Financial Reform, a DC-based watchdog group that has played an important part in defending the CFPB from its opponents, said, “The current Wells Fargo scandal reveals why we need a strong regulatory agency that has the backs of bank consumers as well as employees.”
“Wells Fargo’s action to eliminate sales quotas is a hard-won victory for front-line bank workers like me who have been coming together in the Committee for Better Banks and working to end to high-pressure sales goals that hurt our families and communities,” said Julie Miller, a former Wells Fargo branch manager and a member of the Committee for Better Banks.
“Wells Fargo got into this scandal because it turned a deaf ear to the alarms sounded by consumers and its own workers, and its experience proves that these sales goals have no place in the consumer banking industry,” Miller said. “Predatory sales goals are rampant at big banks across the country, and we will keep on working and organizing to make sure Wells Fargo makes good on its word and that other banks follow suit by implementing fair business practices for workers and customers.”
By Peter Dreier
Source
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