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| Wells Fargo CEO John Stumpf testifying in Congress last week. |
One of SEIU-UHW President Dave Regan’s closest CEO buddies -- Lloyd Dean, CEO of Dignity
Health -- is neck-deep in the
scandal that’s rocking Wells Fargo.
In fact, Dean -- who serves on Wells Fargo’s Board of Directors -- may have
used insider information at the bank to improperly line his pockets, according
to SEC records not been previously reported.
The episode
offers another glimpse at the harmful effects of Regan’s collaborationist
approach with corporations.
Headquartered
in San Francisco, Dignity Health is the fifth largest health system in the
nation and is the largest hospital company in California. In 2014, Dignity paid
Lloyd Dean $8.1 million, according to the company’s federal tax returns.
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| Lloyd Dean's 2014 Compensation at Dignity Health: IRS Form 990 |
Dean, in
addition to his full-time job at Dignity, has plenty of time to work well-paid gigs
on the side … like serving on Wells Fargo’s Board of Directors.
At the bank,
Dean headed the “Corporate Responsibility Committee,” charged with monitoring
“customer service and complaint matters,” at the same time that Wells Fargo was
quietly setting up 2 million phony accounts for customers, according to proxy
statements cited by Fortune Magazine. The fake accounts -- which forced bank
customers to pay service fees on debit cards, credit cards, and other accounts
they never authorized -- boosted Wells Fargo’s profits.
Here’s an
excerpt from the Fortune Magazine article
published last week (“The
Wells Fargo Board Committee in Charge of Stopping Phony Accounts Rarely Met”):
A review of board records in Wells Fargo’s annual proxy filings of the past few years suggests that, even as scrutiny of Wells Fargo’s consumer practices was ramping up outside the bank… officials at the highest levels of the company, who were most responsible, did little—that is, the absolute minimum—to address the bank’s growing problem.
None of that, though, or the aftermath, appears to have curtailed the payday of the board members involved…
The bank’s board formed the corporate responsibility committee in 2011. It was first headed by Lloyd Dean, another Wells Fargo board member, who now heads the committee that oversees compensation. Dean was paid $346,027 in cash and stock last year.
Dean’s role as
chair of Wells Fargo’s compensation committee is important to note given that
the bank’s aggressive sales quotas and financial incentive programs are at the
heart of the fraud it perpetrated on millions of customers.
In recent
weeks, Wells Fargo agreed to pay more than $200 million in fines. Some
executives may face criminal charges. Meanwhile, Wells Fargo’s CEO John Stumpf was forced to give back $41
million in compensation due to public pressure.
But don’t
cry for Stumpf.
He’s still
sitting on $247 million in Wells Fargo stock, according to SEC records.
Earlier this
week, Congresswoman Carolyn Maloney
(D-NY) ripped Stumpf a new one during a hearing on Capitol Hill. She presented
evidence that in October 2013, Stumpf appeared to have used insider
information to sell $13 million of his own shares of Wells Fargo stock just
before the bank’s fraud became publicly known.
Why is the
timing of Stumpf’s stock sell-off significant?
During Stumpf’s
testimony before a Senate panel on September 20, 2016, he said he first learned of his
bank’s fraud in “late 2013.”
Here’s a
video of Rep. Maloney interrogating Stumpf.
Did other
fatcat insiders dump their stock at the same time?
What about,
umm, Dignity Health CEO Lloyd Dean?
According to
SEC disclosure forms, Dean carried out the same stock-dumping transactions just
a handful of days after Stumpf did.
In early
November of 2013, Dean sold Wells Fargo stock worth more than $520,000. Dean
had acquired the 12,330 shares through a special stock purchase option program
available to the company’s Board of Directors.
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| One of Dean's SEC Forms 4 |
In March 2016,
Dean and his family trust sold another $327,051 worth of Wells Fargo stock,
according to SEC records.
See below
for copies of Dean’s and Stumpf's SEC Forms 4.
What’s SEIU-UHW
President Dave Regan’s relationship to Lloyd Dean?
Dave “Wall
Street” Regan, who favors “partnerships” and secret backroom deals with CEOs,
has worked hand-in-glove with Dean for years.
In 2008-09, Regan
secretly conspired with Dean to carry out SEIU’s trusteeship against
California’s militant healthcare workers union, then headed by Sal Rosselli.
In an
apparent payback, Regan then delivered hundreds of millions of dollars to Dean
by negotiating massive wage and benefit cuts affecting SEIU-UHW’s 14,000
members at Dignity hospitals in California.
In 2010, for
example, Regan eliminated SEIU-UHW members’ defined-benefit pension plan,
delivering Dignity a
$217 million windfall, according to the company’s financial statements.
In 2012,
Regan allowed Dignity to
freeze SEIU-UHW members’ wages and to implement more benefit cuts... even
though the company was making massive profits.
In 2015 and 2016,
Regan negotiated more cuts for workers.
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| SEIU-UHW's Dave Regan |
And in 2014,
Regan famously signed a secret partnership deal with the California Hospital Association, Dignity Health, Kaiser Permanente, and other
corporations. The deal, which was designed to institute “a new model of labor
relations,” included bans on worker strikes and implemented a gag clause that
blocked SEIU-UHW and its members from supporting any regulatory action,
legislation, or ballot initiative adverse to the interests of Dignity Health
and the California hospital industry.
The secret
pact’s provisions, which were eventually made
public through litigation, also prohibited SEIU-UHW -- California’s largest
healthcare workers union -- from “raising concern about... executive
compensation in health care."
With the
stroke of his pen, Regan silenced SEIU-UHW and its members from voicing any
criticism of Dean’s outrageously high salary at Dignity Health... not to
mention his apparently gold-plated insider trading at Wells Fargo.
