Los Angeles City Councilmen Mitch O’Farrell, 13th District, and Paul Koretz, 5th District, on Tuesday introduced a motion to explore divesting taxpayer funds from holdings with Wells Fargo Bank, due to its financial support of the controversial Dakota Access Pipeline.

The Dakota Access Pipeline would extend more than 1,100 miles through North Dakota, South Dakota, Iowa and Illinois. In January, President Donald J. Trump released a memorandum offering support for the project.

Demonstrators attended the March 24 city council meeting to encourage leaders to divest from Wells Fargo holdings. (courtesy of Divest LA)

Opponents of the project have expressed concern that it will cause environmental devastation to the regions it crosses, including the land of the Standing Rock Sioux. Last year, the city council unanimously approved a resolution opposing the construction of the pipeline. O’Farrell said Tuesday’s motion is part of making sure the council’s resolution was not an empty gesture.

“I want to send a clear message to the financial institutions everywhere that Los Angeles must fulfill its role as a national leader on the environment,” O’Farrell said. “The actions we take locally have consequences elsewhere and we must not be complicit in a scheme that negatively affects ancestral lands or the sovereign rights of the Standing Rock Sioux Tribe in North Dakota. The city should divest its holdings from Wells Fargo in a manner that protects taxpayers’ interests, and reinvest those funds in responsible financial institutions that respect the rights of all individuals to be treated fairly and equitably. Wells Fargo needs to change its business practices, or risk losing a customer in the city of Los Angeles.”

The motion directs the city’s Office of Finance to report within 30 days on options for divestment from all holdings with Wells Fargo. The report will include recommendations for immediate reinvestment of proceeds into holdings with other financial institutions that comply with the city’s Responsible Banking Ordinance. The ordinance expresses the city’s commitment to prevent “consumer-averse practice.” The councilmen also point to May 2015, when City Attorney Mike Feuer sued Wells Fargo – which has thousands of customers who are Los Angeles residents – over allegations that the company opened accounts without customers’ consent and failed to notify customers that the accounts had been opened. The practice resulted in fees and other negative financial consequences.

Los Angeles currently holds more than $40 million in securities with Wells Fargo that have a one- to four-year maturity.

Koretz said it’s time the city stops doing business with the reckless and irresponsible people running the agencies.

“I’m proud to stand with Standing Rock,” Koretz said in a statement. “Corporations like Wells Fargo often quote their ‘fiduciary duty’ to its stockholders when approving investments in projects like the Dakota Access Pipeline. However, if they actually looked at the bigger picture and the true cost of fossil fuel investments, which are wrecking our once-livable climate, they would see they are putting not only their stockholders at grave risk, but the entire planet.”

Paul Gomez, vice president of corporate communications for Wells Fargo in California, said in a phone interview on Wednesday that the institution values its relationship with the city of Los Angeles. In defending its involvement with the pipeline project, he said Wells Fargo is one of 17 banks that have made loans to the pipeline’s developers – representing less than 5 percent of the project’s total financing. He explained the bank is obligated by contract and from a legal standpoint, it cannot walk away.

“We are a company committed to environmental sustainability and human rights, and respect all the opinions being expressed on this issue,” he said. “We hope the many works we do for our L.A. customers and communities, including the $250,000 in grants for environmental projects here in Los Angeles and $12.36 million in foundation giving, reflect a much more accurate view of Wells Fargo, rather than looking at a single loan out of the millions that we make to individual home owners, small and large businesses and local organizations.”

He also pointed to the millions of dollars Wells Fargo spends on philanthropic investments, such as $3.42 million in human services efforts in Los Angeles, including HIV/AIDS prevention, $3.29 million for education, and more than $4 million for community development and arts and culture, all in 2015 alone.

Last month, the West Hollywood City Council directed its staff to compile a list of banks that can handle the city’s portfolio after Mayor Lauren Meister said she wanted to explore the possibility of severing the city government’s ties with Wells Fargo.

West Hollywood City Councilman John Duran pointed out that Wells Fargo has supported LGBT causes for 30 years. The city should be careful about “striking and hitting … a liberal-leaning bank in a sanctuary city,” he said.

O’Farrell said Wells Fargo is terrific on “so many” fronts, and he has worked with the institution on projects in Los Angeles, such as recent community upgrades in Glassell Park. But he said that does not forgive its missteps, and that Los Angeles cannot sit idly by when the city has been an environmental leader for the country.

“We can’t look the other way,” O’Farrell said. “By definition, we would be complicit in degrading the environment.”

Chrissie Castro, vice chair of the City-County Native American Commission said cities and counties across the country are standing up for the protection of tribal sovereignty and the right of access to clean water. The Seattle City Council and Santa Monica City Council voted to break ties with Well Fargo for the same reason.

“The movement to defund the Dakota Access Pipeline is about standing up to corporate banking institutions by taking away what they care about most – their bottom line,” Castro said. “It is the responsibility of all Angelenos to ensure the city’s banking practices are consistent with our values of justice, integrity and fairness.”

O’Farrell said his office has been working on this issue for several weeks, and said he hopes Wells Fargo demonstrates that they want to keep Los Angeles as a customer.

The councilmen’s motion will be heard in the city’s Budget and Finance Committee.

Gomez said he hopes the city decides not to move forward with divestment.