When environmental activists persuaded the City of Seattle to divest their multi-billion-dollar portfolio from Wells Fargo in retribution for funding the Dakota Access pipeline, they didn’t celebrate the victorious conclusion to their campaign. They celebrated the beginning of a new front in the financial assault against the oil and natural gas industries.
According to an article in The Nation, the 350.org-led activists planned from the start to use the Seattle campaign as “the spark that might ignite a nationwide divestment drive.”
Since that victory, “hundreds of activists around the country have contacted us by e-mail or social media or on the phone,” said Seattle City Council member Kshama Sawant, who led the divestment initiative. “They are asking us: How did you win this? What did you do to build this movement? They want to know what they can do in their cities.”
And when they ask, they are directed to a website created by the activists that gives them step-by-step instructions on “How to Divest Your City from DAPL.” In addition to the seven-step process, this site features talking points, form letters (both courtesy of 350.org), and even a copy of the Seattle divestment bill itself “to help you draft your own.”
Aided by 350.org and the Sierra Club, these crowd-sourced divestment campaigns are popping up in San Francisco, Los Angeles, New York City, Raleigh, and even Berlin. And these newly deputized activists don’t seem to be content with just attacking banks that fund DAPL. The Raleigh activists, for example, are seeking an ordinance that would “prohibit city contracts with businesses that support the fossil fuel industry.”
And therein lies the problem with these crowd-sourcing citywide divestment campaigns: the entire process is predicated on appealing to people’s emotions rather than facts. Starting, of course, with the pointless nature of divestment itself.
Oil and natural gas companies (and projects) are critical to the health, economy, and security of our country. As such, they make great investments. When one set of investors choose to sell their stocks in these companies (or in the banks that earn great returns on lending to these companies), these stocks are immediately purchased by other investors. Divestment actually ends up hurting those who rely upon the returns from financial investments, whether they are students, pensioners, or taxpayers who must subsidize politically-based financial decisions.
And that’s not all, as Seattle will soon learn.
In his letter to Seattle Mayor Edward Murray, Wells Fargo’s Head of Government and Institutional Banking Phillip Smith wrote, “changing banks is often a very complex process, and can include the potential for incurring unnecessary costs for the City and its taxpayers from other banks for transferring accounts, payments and disbursement services, payroll, merchant card processing, investments, and higher priced, ongoing services.”
In addition to the additional costs, Seattle may find it incredibly difficult—if not impossible—to find a replacement bank because, Smith wrote, the “approved financial institutions that have responded in the past to the City’s RFP for Bank Depository Services, or that are currently providing the City with services, also are involved with the financing of the Dakota Access Pipeline project.”
The elected officials in the other targeted cities would be wise to take into account these uncomfortable truths, and turn a blind ear to the politically-driven divestment campaigns that ignore reality in favor of extremist “Keep It in the Ground” agendas.