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tv   US House of Representatives Special Orders  CSPAN  September 29, 2016 7:00pm-9:01pm EDT

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you had members of the united tates senate, some 28 of them, deep letter expressing concern about the potential impact of the bill they just passed. by some in the senate is that they didn't know what they were voting for. they didn't understand the negative consequences. of the bill. that's a hard suggestion to take seriously, when you had letters from president bush's attorney general an national security advisor warning about the -- and national security advisor warning about the consequences of the bill. you have attorneys from our closest allies in europe expressing their concerns about the impact of the bill. you had a letter from the -- some of america's business
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leaders, including chief executive of g.e., warping about the potential -- warning about the potential economic consequences of the bill. you had letters from the director of the c.i.a., the chairman of the joint chiefs of staff, the secretary of defense and the commander of chief all warning about the potential impact of the bill. aum of that communication was made public before congress cast the first vote to put this bill into law. yesterday. so the hard to take at face value the suggestion suggs that somehow they were unaware -- suggestion that somehow they were unaware of the consequences of their vote. even if they were, what's true in elementary school is true in the united states congress. ignorance is not an excuse. particularly when it comes to our national security and the safety and security of our diplomats and our service members.
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i'll also say that it's a little hard to take that suggestion seriously when the arguments that are being made in this letter and in the public statements from some members of congress are precisely the same arguments that senior administration officials have been making for months. we first discussed it in this room back in april. the president was asked about it in a nationally televised interview in april. and the argument that he made in the context of that interview is exactly the same argument that members of congress are making now. is that a coincidence? it's a remarkable one. if that's what it is. what it mostly is is an abject embarrassment. because i think the american people and certainly our men and women in uniform, some of whom the president had the opportunity to meet with sterday, expect better
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service and leadership from the men and women that they elected to represent them in the united states congress. i'll stop there. i've got more if we want to discuss it further. [laughter] reporter: do you sigh the action around this bill, the voice vote, the override, lawmakers now coming out and saying -- [inaudible] -- as another example of what people don't like about washington? mr. earnest: i think you can describe it faithfully as exhibit a. in the kind of dysfunction that very poorly serves the country and leaves people very dissatisfied with the united states congress. that the coincidence standing of the united states of the among members voting public are at or near historic lows. and an episode like this is not
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going to improve it. reporter: two questions quickly on the president's -- [inaudible] -- does very a speaking role at the funeral tomorrow? then, do you also have names of some of the members of the delegation that are traveling with the president? mr. earnest: the president has been invited to speak at the service. those remarks are being written as we speak. so i can't give you much of a detailed preview. but i think the personal nature of the presidential statement that we issued on the night of president perez's death i think should be -- should give you a good indication of the president's thinking as he considers his remarks at this historic moment. with regard to the delegation, we'll have the specific names out shortly. but it includes a number of senior white house officials, a number of members of congress in both parties, and even some national security officials who don't serve in this administration, but served in the previous administration.
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i think it's a testament to the bipartisan commitment that exists in this country for the strong relationship that the united states enjoys with israel, strong alliance, i should say. and i think it's clear that leaders in both parties here in the united states worked closely with president perez to strengthen that relationship and to strengthen that alliance . i think that's evident in the individuals who on short notice are rearranging their schedules so they can be present and pay tribute in person to the life and legacy of mr. perez. reporter: back to the 9/11 bill. senator corker said he had tried to find a compromise and wanted to meet with the white house officials this past weekend, before the vote. but that that meeting was declined or turned down by people at the white house. i'm wondering if you can speak to that at all, did that
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happen, why was it dedeadlined -- declined or turned down? what can be done now, if there is this remorse as you describe it, is there -- what's the path forward for dealing with some of the concerns? mr. earnest: i'm not going to get into private conversations. but i will make a suggestion to senator corker that he get his story straight. because he spent most of last week suggesting he hadn't heard from anybody in the administration. and now he's suggesting that his repeated request to members of the administration were not given their due attention. a hink the also curious that number of members of the united states senate, including senator corker, would suggest that they voted for a bill that they knew had negative consequences for america's national security, because they felt snubbed by the white house. i think our men and women in uniform can expect a lot more
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than that from the united states senate. reporter: i don't know if that's what he was suggesting or not. i didn't -- [inaudible] -- but -- earnzi i didn't see his -- mr. earnest: i didn't see his comments today. reporter: did he reach out for a meeting and was it denied? mr. earnest: i'm not going to get into individual conversations. for a number of days senator corker was suggestsing that he'd never heard from anybody in the administration. that clearly is not true. i guess now by his own admission. so -- reporter: he's saying no one replied to his request. mr. earnest: oh. he's suggesting -- reporter: he reached out, he wanted a meeting but people here said no or didn't reply to him. i'm not sure. mr. earnest: i'm not going to get into the nature of the conversations. what i can tell you is that senior white house officials and senior officials in the administration were in touch directly with senator corker and his office. about this specific legislation. that much is true.
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i'm not going to get into the nature of those conversations. but i think he's going to have explain to his constituents why he supported a piece of legislation that he claims to harbor significant concerns about. reporter: what can be done now for people who have concerns or to address some of the concerns the president expressed yesterday? what is the path forward? mr. earnest: i don't know what the path forward is. i know there are some members of congress who are interested in trying to clean up the terrible mess that they've made . the president has take an principled position on this issue from the very beginning. and if there are members of congress in either party, frankly that want to join him in that principled position, the president would welcome them to that kind of discussion . but the awfully late -- but the
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awfully late. i'm sure there's -- but it's awfully late. i'm sure there's a colorful express that could be used here -- expression that could be used here but i'll leave that to others. reporter: a quick follow-up on this. two things. one, related to what you said on the plane yesterday, can you really not think of anything more embarrassing that the congress has done in 30 years? and, two, -- mr. earnest: why don't we start there and we'll let you get to number two. in the last 24 hours i've been reminded of a variety of very embarrassing things that congress has engaged in in the last couple of years even. we can go through a few of them if you'd like. the kind of a nice stroll down memory lane. we've got the tortilla coast gambit. which is a real highlight. you've got the leading investigator in the house of representatives into secretary clinton's private email system passing out business cards with a private email address on it. you've got the all but
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anoinlted house speaker -- you a point ined house speaker s-- anointed house speaker saying that the benghazi investigation is motivated to drive down secretary clinton's poll ratings. you've got republicans bringing the united states to the brink of default for the first time in our history, so close to default in fact, that the credit of the united states was downgraded for the first time. separate from that, you have one republican in the united states senate engineering a government shutdown. that lasted for 2 1/2 weeks that didn't result in any change. in government policy. you've got republicans who will four square against even considering the nomination that the president's put forward of a candidate that they have described is a consensus nominee to the supreme court. you've got an individual who is a financial expert who served in democratic and republican administrations alike who has been waiting for more than a year to be confirmed by the
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senate to serve at the treasury department and administer the tough financial sanctions that the united states imposes on countries around the world. i could go on but i'll stop there. ll of these are also embarrassing. but you got to admit that the situation that took place yesterday on the floor of the united states senate stands out . to vote for a bill that members f the senate know would have a negative impact on our national security, and before they've even left the well of the united states senate they've circulated a letter to their colleagues urging them to figure out a way to fix the problem they've just made? that's deeply embarrassing too. reporter: clearly you were ready for that one. the second is sort of a follow-up to that which is, you know, there might be people that would understand the desire or the impulse to gloat and to call members of congress
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kindergarteners and the like and all the stuff you've done in the last 24 hours. but is that, given that you've had them express a desire to fix this in a direction that you guys would like to go, do you think that the kinds of rhetoric that you've offered in the last day has been helpful in some future period of time actually getting these people to come together and fix it? the way you wanted it to be fixed? in other words, that seems like the language that you've been using is counterproductive to the extent that you actually would like to take them up on this offer. ok, maybe you're having second thoughts and let's sit down and try to figure this. mr. earnest: again, i don't think the fair to say i've been gloating in this situation. i don't think that would be evident. typically you gloat after a win. reporter: gloating is using your own words. mr. earnest: the american people have been dealt a setback by the united states congress. despite the president's principled position to try to
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prevent that from happening. that is deeply disappointing to the president of the united states. i think it's deeply disappointing to the american people. and based on the reaction in the last 24 hours from members of congress, i think they find their own conduct deeply embarrassing. they should. reporter: you don't want to offer any sort of outreach to them say, ok, fine, let's talk about it and maybe we can undo it? mr. earnest: we've been trying to persuade them to do that since april. reporter: do you think the language you used in the last day is going to help that? mr. earnest: mike, i think it is hard to persuade a member of congress who isn't willing to vote their conscience. members of congress say and now publicly admit that they're deeply concerned about the impact that this bill will have on our national security, but yet they voted for it. i don't really know what sort of elective -- legislative strategy or set of negotiations is going to persuade a member
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of congress who is not willing to put the national security interests of the united states first. and that's unfortunate. if there are members of congress, to be clear, if there are members of congress that have had a change of heart, are now prepared to take a principled position, we would welcome a conversation about that. we would welcome action to solve the problem that they have created. here's -- i guess this is the other perspective. there are plenty of problems that we believe that congress should be taking up right now. secretary king was here talking about some -- how additional funding for college and financial aid or for early childhood education would address a problem that we see in our education system. there are a variety of things that we could do to strengthen our national security or strengthen our economy, invest in our infrastructure, make our tax code more fair. there are plenty of problems to solve. without congress going around and creating more. but yesterday that's exactly what they did.
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and for a congress -- a republican congress that has refused to do its job, it's ironic that they're only adding to their to-do list. reporter: misrepresenting senator corker, i think i'm going to try to refine what his point was and try to get your reaction to it. i think the way republicans on capitol hill have described this is they wanted to take action on behalf of 9/11 families. the bill was sort of championed y senator schumer, had broader implicationsen this than -- than they would have liked -- implications than they would have liked, which is why they wanted to sit down with senator schumer, the democratic leadership of the white house, and hammer out some sort of compromise that could have attended to the 9/11 families but also satisfied at least some of the foreign policy concerns that you or others have raised. i think when you say, well, i'm not going to talk about the
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conversations, the question here, getting to the core of it is, why wasn't the white house negotiating in a way that the senate seemed open to on a version of this bill? i think they're depicting you as saying, this is a bad idea, we're putting our hands up, don't do it. you're jumping off a cliff. -- that's wrong mr. earnest: that's wrong. reporter: what's wrong? mr. earnest: there were extensive negotiations and extensive consultations from senior administration officials at the white house and throughout the president's national security team with members of congress in both houses and both parties. that's a fact. those conversations were substantive. and we were trying to prevent congress from creating a significant problem, by their own assessment. they've acknowledged this is a significant problem. we were interested in having that conversation. so, again, senator corker started out this week by saying that he hadn't heard from anybody at the white house.
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and that's just not true. it wasn't true then, it's not true now. but let me give you one other example. we also have a conversation here, back -- we also had a conversation here, back in the spring, i will acknowledge, i didn't remember this. there was a conversation about one tweak that had been made to the bill. at the request of the administration. to the request or the tweak the bill was one that we welcomed, that was based on conversations with the administration, but was not sufficient to satisfy the significant concerns that had been raised by white house lawyers, that had been raised by republican national security experts, that had been raised by european officials, that had been raised by american business leaders, about the potential unintended consequences of this bill. so, the fact that there were some changes that were made early on is evidence of the kind of ongoing consultation that's been taking place.
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but the changes that were made, as i said back in the spring, were insufficient. so i think that is pretty good evidence that there was a good-faith effort on the part of the administration to bring about these changes. but they were insufficient to address the concerns that were raised by experts in both parties. and some of the closest allies of the united states. reporter: i think maybe that's the crux of it. which is, you know, you guys have said, maybe your extensive negotiations with congress, and the hard to say if you're not going to show your work, or to say there's no version of this bill that's going to satisfy the requirements. the reason that i think, at least i'm particularly skeptical of the notion that there were these extensive negotiations is it's not just, you know, republican leadership that's saying this.
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a close ally of the white house said, didn't hear from you guys the entire week. there's a number of other democrats who have been really frustrated and vocal about the white house outreach on this. mr. earnest: the response to that is vote for a bill they don't support? reporter: they want to do something for the 9/11 family. you guys at a certain point became unwilling to negotiate. this is the bill that was in front of them. mr. earnest: we've talked at great length and i'm happy to do it again about what the president has done to show his strong support for 9/11 families. the president is somebody who got justice for the 9/11 families by order the mission to take osama bin laden off the bat -- off the battlefield. the president is proud of our men and women in uniform and the intelligence community who accomplished that mission. and demonstrated tremendous bravery and courage in getting it done. the president is also somebody who is a champion of ensuring that our first responders and others who were working at ground zero got the health care
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benefits they deserved. the president is also somebody who has spoken eloquently and powerfully about how 9/11 families serve as a personal inspiration to him. so, when it comes to doing something for the 9/11 families, the president's already done a lot for our 9/11 families. and the president believes that we should continue to show support for them. factor nk the other that has gone unmentioned so far is we're six weeks before an election. i suspect that that's what had a lot more influence over members of congress than anything else. and i guess to go back to your question, maybe after the election passes, maybe we will see some more principle on display in the united states congress. reporter: last one on this. this is a campaign that you've been undertaking, as you've said, since april.
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this is actually how we got into the 1983 question yesterday. what does it say either about your legislative affairs office or the power that the president holds at this point that members of congress were unwilling or unable or didn't e the long litany of consequences -- [inaudible] -- mr. earnest: first of all, they feigned ignorance so that's on them. ignorance is not an excuse. the concerns that they have now cited after passing the bill are exactly the same ones that we've cited. again, i think that's a real tough argument for them to make. they can either say they were ignorant of the consequences of the bill, because they didn't read it. they were essentially unaware of what they were voting on. or they can say they carefully our ered the opinions of and t allies in europe
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ash carter and barack obama and overrule them and considered -- and relied more on their own judgment than they did on all that bipartisan group of national security experts. but they had to get their stories straight. i think when you see this kind of thrashing around that we've seen in congress, i think it's an indication that they're pretty uncomfortable with the position they're in. i don't blame them. if i were them, i would be deeply embarrassed. reporter: on deutch bank. [inaudible] i just want to ask, i mean, their shares have spiraling over the -- sparled -- spiraled over the last couple of days large by laws -- largely because the justice department has requested $14 billion -- [inaudible] -- that's almost the entire market value of the bank. it's creating ripples through the financial markets but also
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a political headache for angela merkel back in germany, a close ally of the president. has therein there been conversations between the -- has there been conversations between the white house, the germans about this, is there anything the u.s. can do to, i guess, help shore up that situation and provide greater clarity to investors? mr. earnest: i don't have much that i'm going to be in a position to say about any sort of justice department actions or conversations that they've been having with one entity or another. what i can tell you is that the president did have an opportunity to talk with chancellor merkel today and their conversation was actually focused on the situation inside of syria and the shared deep concern about the increase in violence there. also had an opportunity to discuss the situation in ukraine as well. nd the continued violation of
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ukraine's territorial integrity by the russians. i don't have more detailed readout of that conversation to share beyond that. reporter: has the president been briefed about the train crash in hoboken. do you have anything to add on the investigation? any potential cause? has he reached out to governor christy? mr. earnest: the president is aware of the crash in hob ombing ken -- hoboken. the investigation is being led by the transportation safety board. the federal railroad administration is involved as well. and has personnel onsite. they're collecting as much information about what happened as they can. and the president will be updated on that situation as they learn more. i'm not aware of any conversations with governor
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christie's office at this point. white house officials have been in touch with the mayor of hoboken and i would expect that open line -- that live communication to remain open -- line of communication to remain open and we'll do our best to keep you apprised of any conversations with the governor's office. reporter: after the train derailment -- failed last week, there was talk about it. none of new jersey transit trains are fully equipped for it. the deadline keeps getting pushed. it's now 201 to get this installed. is that -- 2018 to get this installed. is that a mistake? mr. earnest: hat this point it's too early to -- at this point it's too early to tell what impact the deployment of the positive train control system would have had in this situation. i actually don't even know as we're standing here whether or not there is positive train control in that part of the system. so we'll collect more facts to determine what exactly happened and my colleagues at the ntsb will keep you apprised of that. reporter: what do you make of the libertarian candidate, gary
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johnson's, inability, what he calls a brain freeze, when asked if he could identify a foreign leader from any country or any continent that he admires. what do you think that says about the level of preparedness and discussion in his presidential race? mr. earnest: listen, in the same way that i'm -- i don't regularly put myself in a position of responding to claims or reactions from the republican nominee for president, the same thing would apply to the libertarian nominee. i think what i can add to this conversation is that one of the things you've heard the president say on many occasions is that one of the reasons that he's a strong advocate of secretary clinton is she is somebody who has -- is as experienced as any other nonincumbent to seek this office. part of that is based on her extensive experience in effectively representing the united states of america around the globe.
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the president believes that that kind of experience, that kind of track record, is relevant, as people consider and make a decision about whom to support in the upcoming election. reporter: do you think there's a dumbing down of the issues or the discussion -- level of discussion in the presidential race? mr. earnest: i'll let others comment on that. the president believes that a vigorous debate and discussion around the issues is important. that certainly is going to improve the ability of voters across the country to make an informed decision. if the candidates are talking about important issues. the president's certainly hopeful. reporter: has the c.r. arrived at the white house and will president obama sign it before leaving for israel? mr. earnest: i'm told it has arrived at the white house and our intent is to have the president sign it before he departs. we'll keep you posted on that. reporter: on the override, has
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there been or will there be any outreach to saudi arabia to discuss the veto override, explain what happened to them? mr. earnest: -- reporter: if explanation is warranted. mr. earnest: i don't know if there's explanation that's needed. obviously my colleagues at the state department are in regular touch with their counterparts in saudi arabia. obviously they have been in ecent weeks, given the onsequences for this bill. i can't speak to any specific conversations. you might want to check with the state department. reporter: was the phone call with chancellor merkel the reason the president was late to the olympic event? mr. earnest: my understanding, the reason he was late is before the event started the president had an opportunity to shake hands with all of the olympians. the president and first lady really enjoyed that opportunity . it took a little longer than was allotted on the schedule. i think primarily because the president and first lady enjoyed the opportunity to
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visit with the olympians one-on-one. reporter: do you know if he met with john carlos and tommy smith? mr. earnest: i don't know. we can check on that. reporter: that's it. reporter: i have two questions. syria. the situation in aleppo has been described as a living hill. the administration came under immense criticism from u.s. that you relied too much on the russian image. everybody knows that the intention was to prop up the regime. what real options do you have now to stop the carnage in aleppo? apart from -- [inaudible] earn we're obviously deeply dis-- mr. earnest: we're obviously deeply disappointmented at the refusal of the russians to use their influence with the assad regime to reduce the violence in aleppo and around syria for sustained period of time.
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the goal of reducing the violence was essentially twofold. e first is to allow for more and more regular deliveries of humanitarian assistance. and to kick-start discussions about a political transition inside of syria. it's difficult for either of when things to take place innocent syrians are under fire. and there has been a shameful strategy implemented by the assad regime and aided and abetted by the russians to try to bomb civilians into submission, by targeting hospitals and refugee camps and even underground playgrounds. the appalling -- it's appalling.
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the situation in syria does continue to worsen. and it's deeply concerning. our focus has been on trying to bring an end to that violence and we've engaged diplomatically with the russians who have significant influence with the assad regime, to try to bring that about. but thus far that's not worked nearly as well as we would have liked. reporter: how can a superpower like the united states, it seems to be in a position of complete impotence, of even delivering aid to besieged people, mainly children and women in a city like aleppo, while ban kim moon described the act as war crimes. do you support that president assad should be indicted as a war criminal and taken to the haig -- hague? mr. earnest: the united states has been supportive of efforts
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at the united nations security ouncil to refer cases to the i.c.c. unfortunately russia has used their veto on the security council to block those reform -- those referrals. that's been deeply disappointing. as i mentioned, what the assad regime has done inside of syria and in aleppo in particular is shameful. it's deeply imimmoral. nd it's caused the kind of widespread bloodshed that's difficult to even read about. it's tragic. it's one that the president's deeply concerned about. reporter: it was reported saying he asked the president's security team to come up with new options that we have not heard before. can you elaborate on that? share some of these options? mr. earnest: the president is regularly urging his national
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security team to evalue wage wait the situation -- evaluate the situation in syria, to consider our strategy, and look for ways to refine it and improve it. and lead to more positive results. much of that strategy and much of that strategy discussion has been focused on degrading and ultimately destroying isil. we've got substantial progress to show for effort that has been directed against isil. we haven't made as much progress in trying to address the political situation inside of syria and we certainly haven't made as much progress as he would like in sustaining a cessation of hostilities. that's been deeply disappointing. reporter: [inaudible] mr. earnest: as long as there are innocent people being targeted by their government and killed in attacks by barrel bombs and chemical weapons,
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that's going to be a problem that's in need of more attention. the president's been distressed by the reports. in the same way that i think everybody in this room has been. based on the news conference of the situation there -- coverage of the situation there. the president is going to continue to push his team to look for and evaluate additional options that we can undertake to try to reduce the violence, increase the flow of humanitarian assistance and kick-start the kind of political transition talks that everybody acknowledges are necessary to address the root cause of the situation in syria. reporter: one more. one person has been -- [inaudible] -- two-state solution. many believe he didn't do enough to advance the cultural peace, including respected israeli writers. he said mr. perez supported the building of israeli
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settlements, occupation. he never believed palestinians were equal. the president described him and his achievement -- [inaudible] -- can you tell us exactly what did he do to advance the cause of peace? mr. earnest: there are people that know a whole lot more about the history of this situation that are in a better position to offer their own commentary about the legacy of shimon perez. president obama deeply admires shimon perez. not because he's a perfect person, but because he's somebody who dedicated his life to championing the israeli people and advocating for peace. president obama's enduring respect and admiration. president obama will have the opportunity to talk about that at the memorial service, of course. i'll leave it to others to do the careful detailed evaluation
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of president perez's legacy. reporter: a couple on syria. we'll move back to jasta in one sort of random subject, if you don't mind. president obama stated at the pat al -- at the presidential town hall last night that he brings in critics of his syria policy for consultationing with him. can you identify any of those critics? mr. earnest: the president's consulted with a wide variety of individuals. some of whom used to serve in this administration and nadia cited in her question. but, listen, i'm not going to -- i think the point that the president is making is that he's open to a wide variety of views. that includes members of congress. some of them have better informed views than others. but many of them have not hesitated to be critical of the situation inside of syria. and the president is open to the point of view of people
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with a variety of perspectives. in part because, i know that you've spent time looking at this too, it's not fazz there's anybody -- it's not as if there's anybody sitting out there that we're aware of that has the magic key to solving the situation inside of syria. reporter: identify people he was referencing. if not, that's fine. mr. earnest: i'm not going to go through individual names. when you consider people who have written about this but don't serve in government, or individuals that used to serve in the administration, or members of congress who have strongly held views, the president has had an opportunity to talk to people who have fit those kinds of broad descriptions. that's who the president was referring to. reporter: secretary kerry work shved hard with foreign minister -- worked very hard with foreign minister laverove to set term-terms and conditions for a potential ceasefire that would be followed by other measures. as we've seen, the ceasefire didn't hold. russia is now engaged in arkses, -- actions with
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secretary -- which secretary kerry this very morning described as inexcusable. in response to all of this, the administration has threatened to sever all communications with the russians related to syria. and i just wonder if there wasn't a lack of planning on the part of the administration for the prospect of a complete breakdown of the ceasefire and the kinds much actions we have seen from russia, because as a response you're left threatening to do something. i just wonder if -- why the administration didn't have in place a plan for how to go about its business in the event we saw this kind of default. mr. earnest: the president's national security team is always thoroughly evaluating contingency plans. that's work that often takes place behind the scenes. it's often something we don't talk about publicly. in some cases because we don't
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want to undermine the ongoing efforts by discussing what the alternative would be. and some cases -- in some cases those cases are classified and not something we can talk about publicly anyway. i also think that in talking about this over the last several weeks, even this new effort that in the first few hours showed some promise was something we were deeply skeptical of. there was never a sense that this was a guaranteed solution. in fact, there is skepticism about whether or not it would work. the president made the case, i think rather persuasively, that it would be irresponsible to not even try. reporter: so the default setting on the part of the administration was, if this thing collapses, let's move to a threat to secretary ofer communications? that was your plan b? if this fell apart? mr. earnest: no. i think what i tried to convey is that there are a variety of contingency plans that the president's national security team is always considering and in some cases we won't discuss
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those because we're invested in trying to make the original plan work. in some cases we're limited in discussing these plans because they haven't been cleared for public discussion. reporter: on jasta. given the historic nature of the outcome yesterday. can you tell us how the president learned of the outcome and what instant reaction -- [inaudible] mr. earnest: there's no surprise. i guess in terms of scriping it as historic, -- describing it as historic, it was obviously the first time the congress had voted to override president . ama's veto president obama, i would point out, went deeper into his presidency than any president since lyndon johnson before his vote was overridden. and the president's success rate at sustaining vetoes is over 90%. that's a percentage that's higher than president george w.
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bush, president reagan, president ford and president nixon. reporter: there's a scale probably. mr. earnest: there is a scale. i think it is -- but again, i think that would speak to the effectiveness of the president and his team. reporter: [inaudible] mr. earnest: the president learned about it from public reports. reporter: was he watching the vote take place? mr. earnest: no, the president was on road yesterday. reporter: who told him about it? mr. earnest: i think he read it himself in news reports. reporter: you mentioned in your discussion of jasta earlier that ignorance is not an excuse for lawmakers. does that same maxim, ignorance is not an excuse, apply to secretary clinton professing to have been unaware of the classification markings on her private email? mr. earnest: i'll let secretary clinton and her team talk about what she was thinking about and what she was aware of in the use of her email. reporter: last question, different subject. during the presidential town hall last night, a woman rose from the audience to ask the
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president a request. she described herself as -- question. she described herself as a widow of somebody who had, she said, had been misdiagnosed by a particular doctor in the v.a. system. the president at the end of that exchange vowed to learn more information about that case. number one, did he learn more information about that case? mr. earnest: the president has asked his team to collect more information about that case. i don't know that he's been updated on it today. reporter: given that this was a nationally, perhaps internationally, televised forum in which this exchange was held, it seemed to me that not knowing the specifics of the case it was quite possible that this doctor who was referenced by the woman and who is now the subject of presidential focus may or may not have been guilty of misdiagnosing the individual in question, and i just wonder if we can use this venue to establish that the white house takes no particular view on that subject as of now. doesn't seek to prejudice the case as it were.
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mr. earnest: of course we're not seeking to prejudice the case. but the president and everybody who works at the v.a. holds themselves to an extraordinarily high standard. accountability is important. and i think this administration has demonstrated that, including at the v.a., on a number of occasions. reporter: even this position has a right to -- physician has a right to innocent until proven guilty -- innocence until proven guilty, correct? mr. earnest: right. the president was not familiar with the details of this case but asked his team to try to learn more about it. reporter: the train incident. is there any suggestion or any sign that this might be terrorism? mr. earnest: at this point, i'm not aware of any evidence that hags been uncovered that -- has been uncovered that would draw that kind of linkage. but this is something that the national transportation safety board is continuing to look at. so i think the too soon to rule that out. but at this point i'm not aware of any evidence that would raise those kinds of concerns at this point. reporter: on the veto horizon.
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is he talking about potential unintended -- you keep talking about potential unintended consequences are there any specific cases -- consequences. are there any specific cases, statements, actions by any foreign government or entity anywhere that are evidence of hese unintended consequences actually happening now? it's such a vegas notion that these things -- vague notion that these awful things could happen. are they happening anywhere? mr. earnest: let me answer your question by -- in two ways. the first is that our lawyers at the state department will tell you that the concept, the principle of sovereign immunity is something that is routinely invoked by the united states to protect our country and to protect our service members and diplomats. this is not some esoteric, rarely used part of
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international law. this is actually one of the central principles of international law. that does more to protect the united states than any other country in the world based on the u.s. involvement around the globe. so, this is a critically important principle and one president, again, and national security experts in both parties believe is worth protecting. reporter: i understand conceptually. but again, is there a specific example, as much as this happens routinely, where this concern of yours, the administration's, as a practical matter, you can tell us exactly where this is happening or your fear in the coming days? mr. earnest: the concern is that the bill went into law just yesterday. our concern is that other countries around the world will see that change and begin to initiate -- reporter: has that happened? this is not a surprise.
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is there a legislature or a parliament somewhere where you see this happening? mr. earnest: this is something that the e.u. warned about. so we've got our european allies who are suggesting that this is a cause of deep concern. i'm not aware of any specific legislative actions that have been taken by another country as of today. but that risk now exists today in a way that it didn't yesterday. and that does expose our diplomats and our service members to enhanced risk. reporter: given the 9/11 families, the intention to pursue lawsuits now, does the administration anticipate -- do you feel so strongly about what's at stake that the administration can see itself potentially intervening in those cases legally to try and stop them from proceeding because you're so concerned about the unintended consequences of these legal cases proceeding? mr. earnest: a decision like that, i'd actually refer you to the department of justice. it may be a little hard for them to comment on a court case
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that doesn't exist yet. they may be able to discuss what potential role the federal government could play in a legal proceeding like that. reporter: principles and ideas. is that -- do you think it's an idea, a principle that would be so crucial that it would be worth defending or fighting for in that context? mr. earnest: again, i don't know if the possible for the federal government to play that kind of role in a private lawsuit. i'm also not an attorney. the department of justice may be able to give you a better sense of what potential role the federal government could have in a to potential lawsuit down the road. reporter: lastly. with the passing of former president perez in israel and the president's deep concern peace, process, how it's broken down, there were some questions to you the other day about the possibility of him, before he leaves office, essentially laying out his view of how things should happen there, after a respectful
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period of time passes, given what's happened in the passing of the former president, do you think it is more likely or possible that the president may now see that this is a moment where he should, given the fact that he's leaving office, and his depth of concern about this issue, explain more or lay out a plan that he sees as viable and what should happen there a what his predecessors -- path they should pursue? the rnest: listen, president obviously earlier in his presidency expended a lot of energy, as did secretary kerry, in trying to bring the palestinians and israelis together to the negotiating table, to facilitate an agreement that would bring peace. those efforts were ultimately unsuccessful. because the kinds of difficult decisions that must be made in
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the context of those negotiations can't be imposed by the united states or even by the international community. ultimately it's the leaders of the party it's themselves that have to make -- parties themselves that have to make those kind of decisions and make those -- reporter: given this moment and where we are in his time in office, does he feel like this is a moment where he feels like he should do more than he would have done previously? mr. earnest: i can't speak to any sort of potential future actions. what i can speak to is a principle that we have -- a reality that we have acknowledged from the beginning. which is that the united states or the international community or other otherwise forces cannot impose a solution and a solution will only come when leaders on both sides monstrate a willingness to make very difficult decisions. to find a compromise. and that's difficult work.
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it's certainly tricky, when you consider the politics involved. but the also tricky when you just consider the deeply held principles involved. i think that's why when president perez pursued this kind of peace through negotiations in his career, that effort was so difficult that his efforts were recognized with a nobel prize. the president would be the first to acknowledge that the kinds of questions that are facing israeli and palestinian leaders are extraordinary. and they're difficult. and they're complicated. emotion re filled with very estions that go to
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basic principles related to identity and religion and so this is complicated stuff. at the end of the day, it's precisely because of the nature of these questions that ultimately it will be the leaders of the israeli and palestinian people to decide how to move forward and how to pursue this peace. the united states is going to continue to play the historic role that we have played. in encouraging both sides to come to the table. reporter: two brief questions. first, on friday, you issued a very strong endorsement from the podium of the role of the consumer fraud protection bureau in the investigation of wells fargo and the phantom accounts that were there. jeb hensarlinging, chairman of the house financial services
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committee, said, and it's been widely quoted now, that the cfpb did not go far enough in its investigation, was completely uncooperative with his committee, and was stonewalling. and he wants to bring officials of it before his committee for further investigation. there's obviously a different interpretation of the role of the cfpb here. mr. earnest: obviously. chairman hensarling is somebody who has repeatedly tried to undermine the effectiveness of the cfpb. questioning their independence, trying to cut their budget, therwise questioning the reason for their existence. hearing this criticism from him is not particularly surprising. but it's hard for me to speak to in a lot of detail about the work that the cfpb has undertaken in the context of the wells fargo investigation because they're independent.
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i'd refer you to the cfpb for an explanation about what kind of things were considered in the context of their investigation into wells fargo. reporter: my other question is about libya. the president himself has expressed his sorrow about the inability to form a government. in recent weeks receive seen eld help in her increasingly gain control over key areas of oil. he's charged with his mission by the parliament. does the administration feel thanks good sign and is he someone that we feel comfortable with in a future libyan government? mr. earnest: the united states has indicated our unequivocal that t for the government was formed under the auspices of this u.n. process, and the situation in libya continues to be complicated and the security situation there in particular
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continues to be challenging. challenged this newly formed, newly created government to succeed in unifying the country. but they certainly undertake that work with the strong support of the united states and the rest of the international community and the united states has at the invitation of the government taken some steps to help them counter the terror threat that they face, i think that's an indication of the united states ' investment in the success of that independent government in libya. reporter: the u.s. considers hepner part of that independent government? mr. earnest: i don't think the independent government canners him a part of that
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government. we'll see if we can get somebody to give you more detailed accounting of the situation there. reporter: thank you. reporter: yesterday the indian government said it carried out -- [inaudible] -- in its fight against terrorist groups coming from pakistan who are trying to -- [inaudible] -- what do you have to say about that? mr. earnest: what i can tell you is that we've seen some reports from the region, those reports include that india, indian and pakistani militaries have been in communication with one another. and we encourage continued discussions between india and pakistan to avoid escalation. ambassador rice yesterday had an opportunity to speak with her indian counterpart, national security advisor duvall, and in that call ambassador rice made clear that the united states continues to be concerned by the danger that cross-border terrorism poses to the region. and the united states fully expects that pakistan will take effective action -- action to combat and de-legitimatize
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u.n.-designated terrorist individuals and entities. the united states is firmly committed to our partnership with india and to our joint efforts to combat terrorism and we're prepared to deepen collaboration on u.n. terrorist designations. at the same time, we continue to be in close contact with pakistan and we continue to value the important partnership that we have formed with them on a range of issues, including security issues. reporter: strong cooperation -- [inaudible] -- was a condition between india and the u.s. on this? earn i can tell you that -- mr. earnest: i can tell you that ambassador rice had an opportunity to be in touch with her counterpart but i can't speak to specific coordination on this issue. reporter: richard burma was his nd he rushed back to other public engagement. is he carrying a message from the white house? mr. earnest: not that i'm aware
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of but you can check with him to see if -- to explain why he rushed back. chris, i'll give you the last one. reporter: thanks. today is the deadline to file an am cuss brief in the case before the -- amicus brief in the case before the second circuit court of appeals alleging anti-discrimination in the workplace. [inaudible] the prohibition ognjen description -- [inaudible] -- also provides sexual orientation discrimination. is the position of the dministration that that law, you haven't said anything about whether it also applies to lesbian, gay and bisexual people. there was a brief of this case. as a constitutional lawyer, has president obama ever expressed a view that anti-gay discrimination is prohibitted under federal law? mr. earnest: i don't know that i've heard him express a view even in private on that precise
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topic. what i can tell you in general is the principle you've heard me give voice to on a number of occasions. that simply is that the obama administration is opposed to trying t are focused on to take freedom away from people. we've been concerned about laws that in some cases seem focused mostly on legitimatizing one form of discrimination or another. that's why you have seen the justice department take some of the actions that they've had, to try to protect those freedoms. i can't speak to any specific action at the department of justice, but as it relates to the specific question you've raised, i'm sure they can talk to you about it. thanks, everybody. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit] [captions copyright national cable satellite corp. 2016]
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>> c-span's "washington journal" live every day with news and policy issues that impact you. come up friday morning, committee for responsible federal budget president on her group's efforts to educate voters and lawmakers on the fiscal impact of the nation's growing debt. and author talks about his latest book, "supremely partisan" which argues the supreme court is becoming increasingly partisan and that politicized cases threaten to undermine public confidence in the court. c-span's "washington journal," live beginning at 7:00 a.m.
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eastern friday morning. join the discussion. >> today on capitol hill, the c.e.o. of wells fargo before the house financial services committee. recently come also before the senate banking committee talking about the problems with wells fargo's banking procedures. we will be showing the entire testimony coming up. just a moment here on c-span. we will also be taking your phone calls. we went to take a look at some of the details. the new york times reporting that some of what the ceo has done so far in terms of changing the actions of the bank and even giving back some of his own earnings may not go far enough. he is orbiting at least $41 million -- forfeiting at least $41 million and dropping their sales are prompting bankers to
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set up illegal in the amount authorized accounts -- unauthorized accounts. meeting at a hearing today before the house financial services committee, nobody was impressed. that is from the new york times. you can read more there and join us at about 9:40 p.m. eastern time. we will take your phone calls during the hearing. the hearing lasting about three hours. we want to hear what you think about what you heard today or if you did not hear it earlier today, we will show it in the entirety. and 6:40 eastern time p.m. pacific. we will show this right now. here it is from the top, house financial services banking committee. >> the chair is authorized to
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declare recess at any time. hearing entitled holding wall street accountable. investigating wells fargo's opening of unauthorized accounts. organize myself for five minutes. today because millions of americans were ripped off by their bank and let down by the government. aud.d is flawed -- fr theft is theft. federal a whole host of laws were potentially violated. including the truth in savings act,fair credit reporting truth in lending act, electronic funds transfer act, securities and exchange act of 1933 buddhists are cuties exchange act of 1934 and the act of 2002. all charges must be thoroughly investigated. culpable individuals must be
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held accountable. the fines wells fargo's book pay, roughly 3% of the rank second quarterly profits is tiny fly wall street standards, the harm caused to consumers and employees is not. to the factory worker who just ed, her credit score ding the cost is big. the waiter at the look of better living paycheck to paycheck you had to pay fees associated with a fraudulent account, the cost is big. the wells fargo employee with kids to support who lost their job because she refused to participate in this game, the cost is big. those who werere betrayed by wells fargo are not forgotten. it is on their behalf that our committee has launched an in depth investigation of your banks activities. today's hearing is just the beginning of our investigation. it is not the end.
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our committee is gathering thousands of pages of records and documents from both wells fargo and the relevant federal regulators. was margo questioning executives. if necessary, i will not hesitate to issue subpoenas because we will do what is necessary to get to the bottom of the matter. stumpf, we don't know what you knew or pointing at him. we know it happened on your watch. for theyou accountable answers to why this happened. at last week's senate hearing, you are uncertain of any matters. in the into many days, we trust that you have had a chance to refresh your recollection to review your records. will provide complete answers today. we need to know exactly when and how you and other executives at wells fargo found out about this
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fraud. we need to find out today what you directed others to do about it when he found out. toneed to know the day administrative held accountable. we know that as far back as 2009, former wells fargo employees started filing wrongful termination lawsuit alleging fraudulent accounts and improper sales tax taking place. 5300 wells fargo employees were fired because of these improper sales practices and as many as 2 million unauthorized accounts were fraudulently opened. we will also be asking serious questions of our regulators in the course of this investigation. if occ had examiners on site at wells fargo during the time when these caps on accounts were opened and the cf. pp was conducted regularly examinations, why did it seemingly take the l.a. times to
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expose the fraud? when exposed, why did it take on mistaken months for them to initiate a supervisory review. know the answers to the questions. perhaps our federal regulators deserve a pat on the back or they deserve a swift kick on the backside. we will find out which. launch this -- because it is our job to hold wall street and washington accountable and protect consumers from the excesses of both. true consumer protection with the preservation of competitive, innovative, free market that are vigorously policed for forced fraud and deception. , i know that wells fargo represents an iconic band. i know that your bank has a rich heritage. i know that you have hundreds of thousands of good employees who had nothing to do with this affair. you do good work in building the
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commission. -- communities. trust markets and individual companies. i regret of a mortgage with your bank. i was i did not. if i was in a position to pay off, i would because you have broken my trust and the trust of millions of others and it will be a long time to earn that trust back. i now recognize the ranking member for five minutes. >> thank you very much. i thank you for agreeing to hold this hearing so that we can examine the fraudulent activity that occurred at wells fargo. , the game start today's -- stop today. borrowing a customer's money without permission is not a sales practice violation, it is dealing. using customer social security number to open credit cards without the consent is not
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wrongful sales behavior, it is identity theft. let's call it what it really is. some of the most egregious rod we have seen since the foreclosure crisis. for five years, wells fargo has pushed they'll goals for low-wage employees that were so unrealistic and so unattainable that some felt pressured to commit crimes just to keep their jobs. it may have happened over 2 million times. fact, we have two former wells fargo workers, julie ladronverde.uth they have suffered from your choices. your senior management, board of directors and -- encouraged and bragged about behavior nothing to widespread fraud. it's today, -- today, i hope you came prepared to explain both how and why.
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you personally told me were prepared to take full responsibility, we have seen your testimony in front of the senate banking committee and there are still answers that need to be given. the testimony that we have witnessed in the senate trying to expect what happened is not satisfactory. we still do not have all of the information we need to understand how this happened, when the sales culture turned toxic and who knew about it and when. despite your statements to the contrary, any legitimate investigation shows that eitherves at wells fargo knew or should have known much earlier than 2013 that these practices were taking place. i think that the executive conduct at wells fargo deserves a thorough investigation by the department of justice.
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someone is responsible for the broken culture that led to this behavior and is to be held responsible. employees that have been left to bear the weight of the mistakes that have been made. this issue is personal for me. fargo's of wells footprint in california means that many, if not many of the employees and customers were victimized by this and they are my constituents and neighbors. they do not deserve to have their trust violated by wells fargo. no one did. i'm still receiving calls in my office complaining about wells fargo and one color described how he went to the bank, complained about excessive accounts that he knew nothing about, the employees called the police on him. he was arrested. trust to the public drive up profits is what wells fargo did.
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in the senate hearing, it was revealed that you benefited from that. your own bank account benefited. you said you take responsibility for these practices. and that you are conducting your own investigation and that you and other managers are for growing some of your compensation. that is welcome. it is not enough. unfortunately, this is not the first time we have seen abusive practices at wells fargo. we thought you were working on ago. practices six years your mortgage executive said reassure subcommittee that you are committed to fixing ands fargo's forgery of -- yet we cannot in the problem fixed. we have seen migrate to another part of your bank. i hope we can hear from you because the american public deserves to know what happened that wells fargo and why
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customers were ripped off. you can also rest assured that this is just the beginning and we will be demanding more information until we get to the bottom of this and come of course, i urge your cooperation and i'm a type that i've known you for a while, i've communicated with the at times you have been very helpful to my constituents. i'm very disappointed. we must get to the bottom of this. i want to be up to receive the documents and information that we requested in. it is in your best interest to come forward with those documents. yield back. >> we will receive the testimony of mr. john stumpf who is the chairman and ceo wells fargo and company. here's how the number of senior management positions at wells and his predecessors where he has worked for 34 years. would you please rise and raise
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your right hand. do you solemnly swear or affirm that the testimony you are about to give will be the truth, the whole truth and nothing but the ?ruth please be said to -- seated. the witnesses written statement and we made part of the record. you are recognized for five and is to give an oral presentation of your testimony. members and members of the committee, thank you for inviting me to be with you today. i'm the chairman and chief executive officer of wells fargo where i worked for nearly 35 years. it is my privilege to lead this company which was founded over 164 years ago and played a vital role in the financial history and development of our country. sorry that we failed
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to fulfill our responsibility to our customers, our team members and the american public. i am fully accountable for all ourhical sales practices in retail banking business. i fully committed to fixing this issue, strengthening our culture and taking the necessary steps and actions to restore our customers trust. we should have done more center. -- sooner. we will not stop working until he get this right. this morning, i will update you on a number of steps taken to address our retail bank sales practices problem and make angst customers who may have been harmed. fargo, we have new leadership in our retail banking business focused on ensuring that all team members provide the best service to our customers. secondly, we recently announced the limitation of product sales
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goals for everyone in retail banking effective january 1. i'm announcing that we are accelerating the process and ending on product sales goals affected at the end of this week. we want to make sure nothing gets in the way of doing what is right for our customers. out to allw send customers a confirmation e-mail approximately one hour after opening a savings or checking account and an acknowledgment letter after a customer applies for a credit card. we are also making it right for customers. we have begun contacting the customers with open credit cards identified by pricewaterhousecoopers to determine whether they wanted these credit cards. it is early in the process but so far we have reached more than 20,000 of these customers and talk to them about the credit card accounts.
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fewer than 25% have told us they either did not apply for the card or they cannot recall whether they applied or not for the card. for those customers who want the card, the card will remain open. for any customer who does not want the card, we are closing the account in informing the credit bureaus. any fees these customers may have paid already has been refunded and we are developing a process to deal with any other forms of harm. customers, we have refunded fees and are contacting every single one of them across the country to ensure that we have a full understanding of every customer affected by this problem. in addition, we are voluntarily expanding the scope of the reviews we have done to go back in time to 2010 and 2009. while these issues we will discuss today are deeply
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disappointing and will take time to repair, they do not represent the true culture and nature of wells fargo. some have suggested the problem was cross-selling. that is not the case. at its core, cross-selling is all about deepening customer household relationships with products they want, hughes and value. and value. is not about crating unwanted accounts. care of our customers, they will deepen the relationship with us. that is good for customers who benefit from lower costs and cross-selling done the right way. in closing, i would like to talk about my commitment to accountability. when i say i'm accountable, i'm referring to the actions our board took at my recommendation
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to forfeit the stock awards that are the largest part of my compensation for the past three years and any bonuses this year as well as my agreement to work without seller until the board completes its investigation. i respect and accept the boards decision. when i say i'm accountable, i leadingn for it -- wells fargo. thank you for this opportunity to testify today. >> the chair yields himself five minutes for questions. , this american people feels like deja vu all over again, some institution is found engaging in terrible activities, there is a headline, fines, and no one seems to be held accountable. the fire has been assessed to you is probably a rounding error in your quarterly earnings reports.
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is, with as many as 2 million fraudulent accounts over the course of five years, 5000 dismissed employees, it is just beyond the credibility that didbody up the food chain not order this, condemn this or turn a blind eye to it. my question to you is, who is the highest ranking official at who has been dismissed because of these activities? >> thank you for that question. or maybe you-- don't know, within the 5300, they were managers and managers and managers of a manager, we are doing a full review of. >> release branch managers -- were these branch managers? nobody above the branch managers? >> and a manager above the branch manager.
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we're doing a full review of other control functions within the company. that has begun. the board is going to be involved. management will be involved. as i mentioned, -- >> when will your own internal investigation be complete to hold management accountable? >> i can't give you a specific timeframe. i will tell you, we are moving directly and we will get to the bottom of this. anybody at the bank holding company level being held accountable? >> people will be reviewed across the board. at holding company, corporate activities, anybody who is involved in promoting or supporting this behavior. >> holding people accountable, the settlement agreement that was entered into with the occ, cfp be and l.a. city attorney office, no individual admits guilt. is that correct?
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not commit ordid deny. that fact there are the fact that we agree to. let's go back to 2011 and i think is the first year we know for a fact that these fraudulent activities were taking place. the records you have shared with us show that 939 employees were terminated from the retail banking sector for improper sales practice. does that comport with your memory? >> yes it does. 2011, isn't it true that you entered into a consent order with the federal reserve that required us to cease and desist from certain practices in the mortgage lending department and that you paid an 85 nine dollars civil penalty --$85 million
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civil penalty? >> that is true but different business area. >> wells fargo internal controls were not adequate to detect and prevent instances when certain of sales personnel in order to meet sales performance standards and receive incentive compensation altered or falsified income documents and inflicted prospective and comes thatalify those for loans they would not have otherwise been qualified to receive. this sounds like the retail banking division. fed understand it, the required was fargo to submit a plan to investigate and to change policies and procedures. i think you testified on the senate side that you were not personally aware of the problems in the retail banking division until 2013. surely you are aware of the
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mortgage lending division in 2011. corrected? >> that is correct. we so that the vision down. if you solve a problem in one area of the business, why did you not thoroughly investigate the others? >> there is no question that we should have done more sooner. that five years later, your bank is being fined for exactly the same transaction and again, it's it feels like deja vu all over again. i hope -- please tell me these are not the cost of doing business for wells. >> it is not a cost of doing business. this is a series trust issue with our customers. there want to say that are 250,000 people who came to work this morning at wells fargo trying to do the very best to serve customers and they do it
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wonderful every day. i don't want our culture to be defined by these mistakes and we take accountability. >> it appears to be a little late when you get caught in it writers go and caught doing it once again. somebody has to be held accountable. high-yield. yield.-yield -- i >> mr. stumpf, he upset you are not aware of this widespread fraud. you were not aware until late in 2013. it appears that there were activities going on that indicate you may have known much earlier than that. 2007, just months after he became ceo, the sales quality manual for the community banking with youras updated guidance as a manual, it states
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that that cells got reminded employees of what should have been obvious. they need to obtain a customer's consent before opening accounts. am i to understand that you discover that there was something going on and there was any for you to do this? the manual also said that sales practices that showed questionable activity would be set high priority to bank executives. it appears that you do something in 2007. unauthorized accounts were a big enough problem that you had to correct your employee manual. as silly as 2008, i have documents from court filings showing your employees for contacting your ethics hotline report and bank fraud and complaining to managers over unauthorized accounts. it looks as if you knew in 2008. frome your consent order
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2011 that puts your company on watch for sales quotas and compensation schemes that pushed employees to break the law. does this sound familiar? acknowledge that we had a 2011 order from the federal reserve. we have always so that any sales organization, you will have to be diligent because not every team member will do everything right every day. we have controls built-in. ethics lines. that you put people to work every day and mistakes are going to happen. it was not until 2013 i learned that this problem had been growing and more prevalent in a certain part of the country which happens to be in the wonderful part of california which you live.
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these are things we have been working on. aroundour strategies training team members which get two weeks of classroom training before they go out into a branch is about doing things right, ethics. i also want to remind the committee that the vast majority of our people who had the same opportunities, same training, same goals did it right every day for our customers. our customer wrote scores loyalty scores are the highest they've ever been. out some other activities that should sound familiar to you. >> while you are under the consent order for the mortgage arm of wells fargo, this fraud ing.searching -- surg
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you or did you know in 2011 that perhaps your sales were driving this broad? -- fraud? >> i knew that of the senate today that we should have done more sooner but maybe, some of our people, it is 1%, but that is a big number. any time we have 100,000 people in our branch network and if 800 people or use this as a way to be dishonest and rake our code of ethics and do something wrong for our customers and for us, that is why we are moving sales goals. they will be gone as of this weekend. we don't think they are important for us to row anymore. -- grow anymore.
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>> some people assume he changed your asthma agreement to add force arbitration clauses and checking causes and that these clauses choose -- are used to dismiss multiple customer lawsuits. >> arbitration does make sense. in this case, for any customer that might have been harmed in the situation, we are also paid for the addition process them immediately. -- they have a mediator. >> my time is up. i yield back. recognizes the gentleman from texas. chairman of our financial institutions subcommittee. >> thank you. you serve but the chairman and ceo of the wells fargo, is that correct? >> correct. >> section 9, 72,. frank
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requires an issuer to disclose statements, the reason why the issuer has chosen to allow the same person to serve as board chairman and ceo. well states that your role is the result of your extensive experience and knowledge and provides the most efficient leadership of the board and company. do you think it is a good idea for the chairman to the chairman of the board and ceo? have 14r company, we outside directors. we have a lead director. all directors are new york stock exchange, independent by their standards. not a member of any standing committee of that board. andindependent directors
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lead director help set the agenda for the boards. they always have meetings that are executive session without me. as you probably read about what happened this weekend because we filed an 8k yesterday about actions that they took as an independent board, i was not part of that. it acts independently. you read clues to yourself from the decisions -- reclused yourself from the board decision? >> i'm not part of that. i serve at the pleasure of the board. >> you can make good idea how the board is structured. do you think that is a good idea for the ceo to be also the the board and- start shareholders be better served if there was some
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separation in that area? >> for our company, i believe we have the right structure. i serve at the will of the board and the board can make a decision on that. >> you you testified -- testified that you learn of these violations in 2013. when did you inform the board that this was an issue? >> the board had high-level lines, comments or questions, or high-level kinds of activities around people who left the company in voluntary terminations. the 2011-2013 timeframe. the board was having some
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discussions as early as 2011 about this? reports at a get committee level at a high level about ethics lines requests or level.tion as a company >> you did not find about it until 2013? >> i became aware that there was an issue in the southwestern part of the country and by 2014, this is late in the year, we started to provide more information to more committees of the board and by 2015, the report ona complete that issue. >> as chairman of the board, when did you tell the board we have a problem? >> 2015 that we had a full report.
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testimony, 2014 we were starting to get more information that this was a risk area for the company to focus on. >> did you ever disclose this issue on a 10k filing? q filings are circumstances of what we knew at the time. as recently as art second quarter -- our second quarter this year, disclosure teams and compliance teams to look at this issue, the circumstances were not material. settingat for congress the corporate structure, but i do think there is some question whether the company would be better served with those roles been separated.
8:35 pm the gentlelady from new york. ms. maloney. >> we know that whistleblowers first contacted the consumer financial control board about the fraud at wells fargo in mid-2013. you said in your senate hearing leslie that you first found out about -- that you first found out in 2013. the first article was published in december of 2013. your form forre filing which i would like to submit to the record. it shows that on october 30, 2013, you sold $13 million worth of wells fargo stock on the open
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market. that is by far the largest open market sale of most part of stock that you made in your nine years as ceo. my question is, did you don't -- dump $13 million of wells fargo stock which he did your family trust right after you found out that your bank had been fraudulently opening hundreds of thousands of scammed accounts ripping out your customers? >> thinking for the question. first of all, the vast majority of our people go to work every day. >> that was not my question. dumuestion was, did you p the stock after you found out about the fraudulent accounts? it seems that the timing is very suspicious and raises serious
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questions. i did not sell shares at the time. i help four times as many shares as i'm required. >> did you sell these shares as -- or not? >> i sold that with proper approvals with no view about anything going on. it's -- >> it seems very suspicious about your largest sale was after your $1.8 trillion bank school forinto a scoundrels. you are knowledge to that your bank fired over 500,000 -- 5300 people who got caught willfully defrauding your customers and a recent lawsuit alleges that you tired even more people because they refused to hopefully the willfullyomers -- fraud customers and many blame
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the low-level people and fire them. you make profits and then you dump the stock. it seems that when he found out about the fake accounts, instead of helping your customers, you first help yourself. stumpf,ight along, mr. you said that wells fargo is conducting a review of all accounts going back to 2009 in order to identify any scam accounts. last week you are asked if you periodxtend the review to be four 2009. you refused to commit to extending the review period back to early. -- earlier. if you are presented with hard-core evidence that wells was engaged in some of these
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practices, these illegal scams prior to 2009, would you change your mind about extending the review? >> we have agreed with the regulators going back to 2011. we voluntarily said last week we will go back to 2010 and 2009. i told our team to leave no stone unturned. if we find a situation where customers harmed that goes back to prior than that, we will make a right for that customer. >> i have the evidence right here. i would like to submit to the record a court case in montana in which six wells fargo employees were fired, among other things, ordering that the cards for customers without their permission which is clearly illegal. and according to the court documents, these illegal sales go back to 2007.
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we have evidence of illegal sales practices going back to 2007. would you agree to extend the review. 2007 to cover this evidence a minute today -- submitted today? >> we will go back and contact every customer. we thank you for going back to 2009. my question is, we have clear evidence that goes back to 2007. will you live up to your commitment of helping your customers that were defrauded with clear evidence back to 2007? back.will go if we find any evidence of any customer harmed in 2007, he will take care of each customer. the chair recognizes the gentleman from north carolina. as chairman of our committee.
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>> thank you. i have the honor of representing charlotte, north carolina. its north carolina had an incredible aching culture over decades. charlotte, first union, homegrown bank, whether challenging times during the crisis as you know. before that time, they teamed up with the bank based in winston-salem. what cobia. -- wakovia. the pitch was that your culture from california is very similar to this north carolina culture. as you well know, john grimes midland, a great chairman,
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imbued in them this culture that a banker is a civil servant as well. 's obligation to society they have in the community. you eulogize this. they attribute that culture. i want to think about that culture. what is so sad to me is that does not conform with my experience with my constituents in north carolina. conform what i know about first union, what a know about what cobia -- wakovia and this cultural pitch you had in acquiring them. and that you have a huge headcount. we are grateful for that. what is said to me is the impact of this on them and those employees we have north carolina. i want to look at your code of conduct. your code of ethics and business conduct.
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you said in your message as ceo, we are all responsible for maintaining the highest possible ethical standards and how we conduct our business. has our codethics applies to all members including officers. it also says we are all accountable for applying with the code as well as policies and applicable laws. finally, critical that all team members have a solid understanding of art could of ethics in business conduct an understanding that noncompliance with the policy may result in disciplinary action including termination of employment. you clearly have failed. you have clearly failed in your own ethical standards internally. you have broken into copy has broken long-standing law. your broken long saying ethical
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standards. this has nothing to do with this debate about. frank or anything else. you have broken a long-standing law and the fraud your customers. how can you rebuild trust? how can you get through this thing? what standards are you calling yourself to that sends the message to the rest of these folks in your organization that look to you for leadership and guidance? >> thank you. the culture of the company is strong. that whenard to say you are before congress for the you wasime and behind all the settlements you have had relationshipsc with your customers. law andcontrary to the ethical standards. this great that you say you have
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a strong culture but yreka today -- why are we here today? >> with respect to culture, we have 260,000 people who have made their life's work and careers out of helping customers. there are people today -- >> that is why rate raised this in the way that i do. severe disappointment. you broke the law. we make the long congress. this is not new stuff that all of a sudden we changed some rules and you can't have your employees create fake accounts and take money from customers unknowingly. not an ethical ok. you say the culture is ok, this seems to me that you are just conduct. one deaf.- t and you have to think about the
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impact you have not safely under institution of the wider conversation on how my consumers can access credit. and the implications of what you have done and your leadership has done has a broader societal impact that is very negative. >> the gentlelady from new york. >> now that you are on the senate side when he testified and the senators ask you whether or not the 5300 wells fargo employees that were fired for their misconduct, how many of them were fired because they quotas?o meet failed now that a week has passed and you have had a chance to consult
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your records and speak to your staff, are you prepared to tell us how many employees were fired for failing to meet their sales goals? aboutthe 5300 which is 1000 people per year out of our team come i don't want to minimize it, it is 1%. people through the investigation were terminated because of their unethical behaviors. we found them. we decided that we can't have them here. they are not consistently with our culture and ethics. shall >> out of that 5000 300 employees, were there any employees that were fired because they did not meet their sales quota chu?
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>> about talking about the 5300, outside of that. >> my understanding is that forle should not be fired missing sales goals. i'm not saying it did not happen. >> how should i trust that that was the case? we are doing a review. if your review shows that there were employees fired because they did not meet their sales quota, would you rehire those individuals? >> we don't have sales quotas. we have goals. there are people also have as part of their performance management. we are reviewing that. we going to try to make it right for every team member. >> i'm sure you are aware that wells fargo is the most active
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lender in the country. >> correct. >> as ranking member, i am very concerned that the legal practices uncovered on the consumer side may have spread to the small business side. frontline employees under similar -- similar pressure? >> thank you. we are the nations largest small-business lender. i'm very proud that we do a lot of work helping men and women across this country. i don't know of any product sales goals -- we have eliminated in a retail bank in that business. >> the seven a program is just a fraction of the overall small
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business lending. can you provide us today with assurances that this illegal practice did not affect any of your small business clients at wells fargo? don't have that information. i am happy to work with my staff and get back to your staff and cooperate on it as best i can. that youthe fact lack the leadership to give us assurances that this was not the so thatwill be writing they could review all of the portfolio to make sure that we protect the small businesses as well as the taxpayers. now that you have decided to end product sales goals, have you considered raising the sellers of your retail banking employees
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in order to make up for this loss and compensation? -- in compensation? >> we are working on a new incentives program. we want to make sure our team members are totally aligned with our customers and we want to make sure that competition for our team cannot hurt. -- compensation for our team is not her. >> it is very difficult for any person in this country to live with $25,000 salary. -- >> gentleman from new jersey. >> thank you. by making an observation. do,t, i find it, as we all extraordinarily troubling as i
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looked through the history and timeline of the scandal. it stretches over years. event testified, 5000 wells fargo employees dismissed for involvement in opening unauthorized accounts. also interesting and troubling that the fire did not happen all at one time. roughly 1000 employees per year. extraordinaire health -- extraordinary how wells fargo did not stop the activities after the first 100 or 500 or 1000 employees hired. it is beyond me. the fact that it was allowed to go on and on and on for years is apparently a failure of corporate government and of your management. it is to protect the
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customers who trust you. what concerns me more is that it appears that most of the 5000 employees fired were low level or mid-level employees. the highest level was a branch manager. it does not include those that reside to to the culture. -- resigned due to the culture. no senior executives have been held accountable in the same manager -- manner that a low level would. i will not be surprised if the number of those people lose their homes or going to massive debt after dismissal. i'm not defending the actions good i'm just making the point that we have a problem where it would seem that the orl-connected on wall street well-connected. seem toon, the elite play by different set of worlds -- rules. as in a you just lost $41
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million of your salary, but if i understand greatly, that is only quarter of your pay over the last decade. he will forgive all of us if we don't feel sorry. doctrine, wells fargo remains eligible for taxpayer bailout going forward under title ii should you run into trouble going forward. moneyers have artie spent bailing out poorly run firms. you andrected at constituents and others around the country is not just over the actions of the employees, the fact that they seem forever on the hook to underwrite what kind activities large banks engage in. we passed a bill out of his committee which will ensure that if was fargo runs into trouble
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again, its shareholders and management would pay the consequences and the taxpayers will no longer be on the book. -- hook. once again, the financial regulators were completely asleep at the wheel as this massive fraud was occurring. one of those regulators, they and they completely blew it. it took a reporter from the l.a. times to undercover -- uncover what was going on. in the time remaining, let's get to the security's questions. the securities exchange act requires public coming to keep disclosure in place. requires them to attest to financial segments. you referred to some of that. are you saying that all of those quarterly reports you filed, the information you had, not the
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material was material? , we've gotime accurate reports and did not believe it was material. when was that? >> 2015. >> as soon as you had that come has that been filed? we consider the facts of the circumstances and believe that not to be material. >> it is not material. why not? the material looked at 93 million accounts that we opened over four years. they cannot rule out through a large data and analytics about 1.5% of the accounts. that is still a lot because of the size of the organization. material, thisot
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occurring over five years, a systemic problem of the organization. i don't know what is. >> the chair recognizes the gentleman from california. >> the american people need thisance that cross-selling mania that has afflicted wells fargo is not to be found at the other behemoth banks. i would urge you to have hearings where we hear from the others.the until then, i hope that you would join with me in a letter of inquiry to ask what new account opening quote as they have for their bank dollars. how many people they fired for not needing -- meeting their quotas. we have wells fargo before me. i don't think you should be alone in this joyous experience.
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your colleagues should come forward with some assurance. it's we are now engaged in an whereant national ritual the ceo comes before the representatives of the american people to apologize and take full responsibility and do so humbly. stumpf, welcome to washington. what plaintiff you plan on? >> virgin america in. >> when you can to the senate? >> united. >> it shows you have learned something. thank you. you have a sports arbitration clauses. they can have mediation. some of them won their day in court. are you going to hold them to
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these forced arbitration clauses and screw them again out of the day in court or are you willing to waive those closet and save your conduct in this, you get your choice of whether you have arbitration or not? i believe in arbitration. i think it is a fair way to -- >> the customers may want something else. >> we will not deprive a home that -- of that. when they want their day in court, please grew them out of that? -- will you screw them after that? will you let them go to court? >> no but with the next donation. >> no, but. that is a no. this was not an attempt to steal a few million dollars. you could say that a few million dollars was not material. what was material is the price
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of your stock. you opened 2 million funny and -- itnd then went had to be material because were bragging about it to the people investing in your stock. that you had higher penetration rates, more accounts per customer, that the number of bank customers that had credit cards had growing from the mid-20% of the 42%. it had to be material you are talking about. the peak firings according to your own documents was 2013. you knew you had a problem that. why did you not tell shareholders that are penetration rates are phony and when we tell you we are keeping our relationship with our customers, we are doing so by putting them through the ringer. what internal audit system did you have that assured you that you did not have a material problem? >> i have to push back. this is the behavior of


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