Wells Fargo, headquartered in San Francisco, is one of the largest banks in the United States (and the world). It is the fourth largest bank by market capitalization, third largest by assets, and second largest by deposits. The bank was founded in the 1850s by two of the organizers of American Express (Henry Wells and William Fargo), after they could not persuade the other American Express directors toÂ establishÂ a presence in California, which was growing rapidly due to the California Gold Rush. Wells Fargo’s business practices enabled it to survive the Panic of 1855, which wiped out many of its competitors.
The company proceeded to build a short-lived stagecoach empire, and then made the leap to express services by railroad. The company’s banking and express operations were split up five years after the turn of the century (1905).
Wells Fargo later successfully weathered the Great San Francisco Fire of and the Great Depression, but the going got a little rocky in the 1980s. However, Wells Fargo survived, and proceeded to gobble up First Interstate Bancorp in 1995 (which it pursued at first with a hostile takeover attempt). In 1998, it merged with Norwest. Although Norwest technically bought Wells Fargo, it kept the Wells Fargo name and headquarters. The following year, the newly enlarged company swallowed thirteen smaller banks, entering the 2000s as a much larger institution. After the financial crisis of September 2008 hit, Wells Fargo became a suitor for Wachovia, which had been weakened by a “silent run” following the seizure of Washington Mutual. Citigroup (which had been planning to merge with Wachovia) objected, but the deal ultimately went through, creating today’s Wells Fargo.
Wells Fargo is a major beneficiary of TARP, the Troubled Assets Relief Program, more commonly known as the “bank bailout”.
By the time President Barack Obama was inaugurated in late January 2009, Wells Fargo had already taken $25 billion in TARP money.
Assets in Washington State
Wells Fargo’s major assets in Washington State include:
- One hundred and fifty two branches
- One hundred and eighty six automated teller machines (ATMs)
- Corporate offices in the following buildings:
- Wells Fargo Center, located at 999 Third Avenue, Seattle, WA 98104
- Wells Fargo Center, located at 601 West 1st Avenue, Spokane, WA 99201
- Wells Fargo Plaza, located at 1201 Pacific Avenue, Tacoma, WA 98402
Since 1990, political action committees under the control of Wells Fargo or companies swallowed up by Wells Fargo have spent more than $5 million on federal campaigns. To date, in the current cycle, Wells Fargo has slightly favored Democratic candidates for House and heavily favored Republican candidates for Senate.
The top recipients of Wells Fargo’s cash are Democratic Representative Carolyn Mahoney, Speaker Nancy Pelosi, House Minority Leader John Boehner, and Republican senatorial hopefuls John Hoeven (North Dakota) and Mark Kirk (Illinois).
Last year, Wells Fargo spent close to $2.9 million lobbying Congress at the federal level. It has already spent more than $2.3 million so far this year.
It spends additional sums lobbying at the state level.
Wells Fargo’s lobbyist in Olympia is Steve Gano & Associates. Wells Fargo’s 2009 lobbying expenses in Washington amounted to $40,800 (PDC data).
What Wells Fargo Wants
Wells Fargo, like other large financial institutions, is anxious to prevent the Legislature from ending a tax loophole that primarily benefits out of state banks. During the most recent legislative session, the House passed a budget closing this exemption. Although many senators wanted the Senate’s budget proposal to do likewise, the language was kept out at the insistence of Senator Jean Berkey, who heads the Banking Committee.
I’m receiving a lot of e-mail supporting the closure of the tax exemption that is currently granted to banks on the interest earned on first mortgage investments. This deduction, which has been in place since the early 1980’s, means that banks don’t currently pay Business and Occupations (B&O) taxes on the interest or investment earnings made from the interest from residential first mortgages.
The Supplemental Operating Budget proposed by the House of Representatives proposes to cap this deduction at $100 million, so that each bank would be taxed only on the excess over that amount â€“ i.e., if the bank earns $150 million in interest, it would pay tax on the additional $50 million. It is estimated that the cap on the deduction would garner around $59 million.
The Legislature ultimately did not close the exemption; as mentioned earlier, this was partly due to Jean Berkey’sÂ interference. However, Washington will face another big budget deficit next year, and this exemption will be one of the first things on the chopping block… unless Initiative 1053 passes. If I-1053 passes, Republicans will assert that closing tax exemptions is tantamount to raising taxes, and impossible to do under I-1053 without their permission. Wells Fargo is essentially buying itself special protection to avoid having its special tax break rescinded. See, Bank of America would rather have that money for itself, rather than chipping in like a good “corporate citizen” to save public services from being eviscerated.
In summary, profit is more important to Wells Fargo than the fiscal health of Washington State (go figure). That’s why Wells Fargo supports Tim Eyman’s Initiative 1053.
- Company Type: Public
- Traded on: NYSE (WFC)
- Contribution Address: 90 South 7th St Minneapolis, MN 55479
- Chief Executive: John G. Stumpf
- 2010 1st Quarter Revenue: $13.2 billion
- 2010 1st Quarter Net Profit: $2.4 billion
Contribution History for 2010 Cycle
|Amount||Date||Initiative/Sponsor||Committee Given To|
|$10,000||07/27/2010||1053 (Tim Eyman)||Citizens for Responsible Spending|
Total amount shelled out by Wells Fargo for electioneering: $10,000