WELLS FARGO DIRECTORS' LOBBYISTS: COVERED BY D&O INSURANCE, OR SHAREHOLDERS?

A Labor Day Special.

In a first-of-its-kind development, the directors of Wells Fargo report that they paid for lobbyists to lobby for them personally, over and apart from the bank's own lobbying fees.  Directors have not ever done this before now, not the directors of any corporation, ever.  Before now.  See Gretchen Morgenson, "Fair Game / Wells Fargo's Testimony Left Some Feeling Shortchanged" (New York Times online, posted on Thursday, August 31, 2017), also available at https://www.nytimes.com/2017/08/31/business/wells-fargo-testimony.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business&region=rank&module=package&version=highlights&contentPlacement=12&pgtype=sectionfront (subscription may be required).

This development has not been reported much.  In fact, I have not seen it reported elsewhere.  Many other developments at, with, and by Wells Fargo have gotten all the publicity, it seems.  The other developments are also discussed in the linked column by Gretchen Morgenson.

Wells Fargo, JPMorgan Chase, Citigroup, and Bank of America collectively spent about $22,200,000.00 on lobbyists during the 18 months through the quarter that ended on June 20, 2017, adding up their separate figures provided in the column.

The Wells Fargo directors have independently spent some $450,000.00 on lobbyists during one-half that period, or during the last 9 months that ended on June 30, 2017.  Id.

Ms. Morgenson asked Wells Fargo directly what value these director's individual lobbying expenses have to the shareholders, and what disclosures about this spending are being provided to shareholders.

Ms. Morgenson also reports that she asked "whether the lobbying expenditures were covered by directors' and officers' insurance or by shareholders."  Good questions.

 Wells Fargo's spokesperson "declined to comment" on any of these questions, Ms. Morgenson also reports.

Since there are no answers yet from Wells Fargo, what are your answers to these questions?  In particular for our purposes here, do you think that director's individual lobbying expenses are generally covered by the usual provisions found in a corporation's directors' and officers' insurance policy?

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