Janine Jackson interviewed William Black on Wells Fargo fraud for the September 16, 2016, episode of CounterSpin. This is a lightly edited transcript.

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Janine Jackson: Wells Fargo employees illegally opened some 2 million accounts in the name of customers who didn’t authorize them, but were still charged with fees. Employees say the bank set aggressive goals for “cross-selling” its products, goals on which bonuses and jobs depend. But CEO John Stumpf tells the Wall Street Journal, “There was no incentive to do bad things.” Well, they say the fraud was concentrated in one division, and more than 5,000 employees have been fired. But the $185 million fine from regulators is still less than the $200 million worth of stock Stumpf holds, and only a little more than the retirement package given the executive in charge of the division identified as the epicenter of abuse. So how does that incentive system work again?

We’re joined now by former financial regulator William Black. He’s associate professor of economics and law at the University of Missouri/Kansas City, and author of The Best Way to Rob a Bank Is to Own One. He joins us now by phone from Vermont. Welcome back to CounterSpin, Bill Black.

William Black: Thank you.

JJ: Adam Davidson in the New Yorker puts it together kind of tightly just by saying:

Cross-selling gained Wells Fargo enormous amounts of money—as well as praise and envy—from its rivals in the banking industry. The fines against the bank are just a tiny fraction of the profits they earned. The message seems quite clear: encourage aggressive cross-selling at all costs, even if it leads to some fraud.

Is there something missing there? Is there a reason that that is not a fairly good assessment of what’s going on here?

WB: We’d be lucky if it were only that, because there’s no historical context given. And the historical context is that we have just seen in the United Kingdom for at least a decade, and a number of people think it’s lasted at least two decades, something that was created by exactly the same kind of mechanism, where you would make much more money if you cheated, and you would get potentially fired and certainly reprimanded, lose pay, if you refused to do the wrong thing.

So in the UK what they did was cross-sell what they called payment protection insurance, and that was to regular customers. And then if you were a small businessperson, what they did was cross-sell a complex financial derivative, the insurance product. They immediately, “they” the bank, then immediately turned around and sold, and got 80 cents on the dollar immediately, and transferred all the liability to another company. It involved over £50 billion in these scam sales. It was the entire source of profits for British retail banking for at least a decade, and maybe two decades.

So this is the biggest deal in cross-selling. This is what Wells Fargo senior executives would have known would be the inevitable result of these perverse incentives. And to state the obvious, when you’re talking about over 5,000 people, and the magnitude of just complete fraud with these 2 million accounts, plus other credit cards in very large numbers being scammed, you know that it’s not a few rotten apples. And the response of the CEO of Wells Fargo, to attempt to blame this entirely on the low-level people, to blatantly lie and say there was no incentive to do this, when there were powerful incentives created by him and by his senior manager, who, as you said, is going to get a golden parachute as opposed to a jail cell, is outrageous.

JJ: And to bring it to media, I find it so galling that you can have a reporter who will quote Stumpf saying there was no incentive. The same reporter will then find employees who say there absolutely was incentive. I guess what I resent is the failure not only to then go back to Stumpf and say, look, we’ve been talking to your employees, and they say you’re not telling the truth about this, but the broader media failure to just take on board, to just integrate into the analysis, the demonstrated fact that CEOs lie. When do we get to say that companies need to be not just chided, but actually checked?

WB: Well, they need more. Right? This is not the first time this has happened. This is absolutely serial criminality from the largest, most elite financial institutions in America. And when will the reporter write, “Wells Fargo, a criminal enterprise, did the following new crime”?

JJ: Well, regulators tend to crow about fines. The $100 million exacted by the Consumer Financial Protection Bureau, they’re presenting that as historic. But a lot of people are, I think unsurprisingly, disappointed; they had high hopes for that agency in particular. What is there to say about the role of regulators here?

WB: Compared to the other financial regulators that more directly regulate banks’ safety and soundness, it is true the CFPD is — you know, in the valley of the blind, the one-eyed agency is king or queen. They are the best of a really sad lot. But as you say, it isn’t simply the dollar amount. In fact, that’s not the principal criticism. The principal criticism is that the agency did not require any admissions.

JJ: So no one had to admit wrongdoing.

WB: That is correct. And no one personally was held responsible. As you said, I was a former financial regulator, I’m a white-collar criminologist, I have negotiated these kinds of things. It’s really simple to get a settlement that has a seemingly large dollar amount. Because here’s the incentive structures of the CEO: One, I don’t go to jail. Two, I don’t lose my job. Three, I don’t lose any of my income getting clawed back because of the massive fraud. But four is, actually, I don’t want to have any of my major officers convicted, because they might turn on me and testify against me. Conversely, I’m quite willing to have money in fines, because they’re not going to be paid by me or any of the officers. We’ll all walk away rich. All the money will come from the shareholders.

So this is an easy trade-off, right, if you’re the CEO, I’ll be happy to settle to what sounds like a significant dollar amount. As the press coverage you read me and your listeners earlier said, it’s actually not even that big compared to the gains in this case, but it sounds large to the general audience. This has been the symbol of our response to this entire crisis; no one elite is held personally responsible. They walk away wealthy.

JJ: And on that note, it feels like a terrible joke being played on—you know, I started to say “banking consumers,” but unless you keep it in your mattress, it’s really every person who’s trying to hold on to and have access to their money. It seems like a joke when politicians stand up and say, “Well, let’s make sure this never happens again”—again.

WB: It does, and I really strongly recommend that people view the most recent Michael Moore movie, Where to Invade Next?, and look at the experience of Iceland. In Iceland the people said, we are not going to put up with this, we’re going to go into the streets and demand specific changes, and in two cases since the crisis, they have caused the government of Iceland to fall within 72 hours.

JJ: We’ve been speaking with William Black of the University of Missouri/Kansas City. His book is The Best Way to Rob a Bank Is to Own One. It’s out now in an updated edition. William Black, thank you for joining us this week on CounterSpin.

WB: Thank you so much.