Wells Fargo Revamps Lobbying Operation

Bank seeks to boost D.C. footprint amid recent political and PR problems

John Stumpf, left, former chairman and CEO of the Wells Fargo Company, listens to questions during a House Financial Services Committee hearing Sept. 29, 2016, on Capitol Hill. (Mark Wilson/Getty Images file photo)
John Stumpf, left, former chairman and CEO of the Wells Fargo Company, listens to questions during a House Financial Services Committee hearing Sept. 29, 2016, on Capitol Hill. (Mark Wilson/Getty Images file photo)
Posted May 2, 2017 at 5:01am

Wells Fargo is overhauling its lobbying and political operation in Washington, as the big bank seeks to rehabilitate its image and policy agenda after months of hits nationwide and on Capitol Hill. 

David Moskowitz, a lawyer and executive with Wells Fargo for 24 years, has taken the reins of the expanded shop. He will oversee federal government relations and regulatory affairs as well as the company’s political action committee, its public policy development, and all state and local lobbying.

“The goal is to bring together all of that under one roof,” Moskowitz said last week. “It’s a work in progress.”

Wells Fargo’s recent head of federal government relations, Anita Eoloff, is retiring after 23 years with the bank, but the rest of the half-dozen government relations team members are expected to remain, Moskowitz said.

He plans to make additional hires along with shifting existing employees to focus on government relations and policy.

The revamp is a recognition that Wells Fargo’s six-person footprint in the nation’s capital needed a boost amid political and public relations problems.

The bank in September agreed to pay $185 million in fines to federal regulators and to the city and county of Los Angeles, though it neither admitted nor denied allegations that it had fraudulently created up to 2 million bank and credit card accounts.

The Senate Banking and House Financial Services committees quickly held hearings where former Wells Fargo CEO John Stumpf admitted that the bank’s incentive systems had encouraged employees to open accounts without customers’ knowledge.

Rep. Jeb Hensarling, the Texas Republican who leads the Financial Services panel, did not mince words at the time, telling Stumpf his bank had engaged in fraud that affected him personally. “I have a mortgage with your bank. I wish I didn’t. I wish I was in the position to pay it off because you have broken my trust as you have broken the trust of millions and it’s going to take a long time to earn it back,” he said. 

Stumpf has since left the company.

Wells Fargo’s new CEO, Tim Sloan, said the reorganized lobbying and policy structure reflects the bank’s “ongoing commitment to engage with policy makers and leaders on issues important to our customers, the financial services industry and the U.S. economy.”

Moskowitz noted that part of Wells Fargo’s new slogan of “building a better bank” includes investing more in “good relationships in Washington.”

“You will probably see Wells Fargo executives much more prominently than in the past,” he said, adding that the company has taken major steps to repair its image, including refunding customer money, settling a class action lawsuit and eliminating sales goals.

“We have to re-establish our reputation,” Moskowitz said.

Seeking consistency

David Stevens, who runs the Mortgage Bankers Association of which Wells Fargo is a member, said he’s worked with Moskowitz for nearly two decades, including once when the two were at odds while Stevens was president of Long and Foster, the real estate company.

“He’s a very honest broker,” Stevens said. “He understands the issues of the financial services industry, and he is highly trusted by everybody who works with him. I don’t think they could’ve picked a better person for this role.”

Bringing the policy, lobbying and political operation under Moskowitz will help Wells Fargo develop policy positions across its 90-plus businesses that include consumer banking and mortgage lending, Stevens said.

“Consolidating this under one leader will likely create more consistency in terms of their advocacy and policy priorities,” Stevens said, noting major policy matters such as possible overhauls of tax law and of government-sponsored entities like Fannie Mae.

Moskowitz, who is 61 and has not worked on Capitol Hill, said he intends to keep on retainer the bank’s existing K Street consultants, which include Covington & Burling, the Podesta Group and the Lugar Hellmann Group, according to congressional lobbying disclosures.

In the first quarter of this year, Wells Fargo reported spending $910,000 on federal lobbying, down from all four quarters of last year where it ranged from $1.1 million to $1.3 million. The company’s PAC reported bringing in nearly $1.6 million during the 2016 cycle, according to campaign finance reports.

Moskowitz said it was too early to tell whether Wells Fargo’s revamped advocacy operation would result in an increase in its federally reported lobbying expenditures.

“Some of these things are works in progress and will require us to add staff,” he said. “Our first and foremost goal is to build out and lead the best-in-class public policy organization.”

Doug Sword contributed to this report.