NEW YORK (Reuters) - Before a sales scandal upended its reputation, Wells Fargo & Co (WFC.N) was something of a proud outsider in Washington and on Wall Street compared to its big bank peers.
Now the only one of 11 executive officers at the bank who did not work there before its fall from grace is a consummate insider: C. Allen Parker, general counsel, 62 years old and former presiding partner at storied law firm Cravath, Swaine & Moore.
Since he took the job in March, Parker has been trying to improve Wells Fargo’s standing with regulators, answering questions from authorities and working through a raft of lawsuits over the bank’s improper sales practices.
But Parker says his most challenging assignment is counselling top management as it seeks to replace a hard-charging sales culture with one focused on customer service.
“I want to make the legal department of Wells Fargo a beacon for other departments in ethics,” Parker told Reuters in an interview.
Faulty incentives and a decentralized management structure led the bank to create as many as 3.5 million accounts in customers’ names without their permission, and to charge others for auto insurance, mortgage features and “add-on” products they did not want.
The problems first came to light more than three years ago, but only caught widespread attention when Wells Fargo reached a $190 million regulatory settlement over the phoney accounts last year. Other issues only surfaced more recently, leading some lawmakers, analysts and investors to question whether the bank has its arms around the situation.
Warren Buffett, Wells Fargo’s top shareholder, recently compared it to a kitchen full of cockroaches.
Parker said he is aiming to tackle the problem and make sure new ones do not spread.
He declined to discuss details of his interactions with regulators and enforcement agencies, but his Rolodex of Washington contacts may help smooth relations there.
Parker has represented Beltway heavyweights like former U.S. Secretary of State Henry Kissinger, and his friendship with former Securities and Exchange Commission Chair Mary Jo White led him to suggest that she conduct a review of Wells Fargo’s board of directors earlier this year.
Within the legal department, Parker brought in Tom Trujillo as his chief operating officer. Since joining in August, Trujillo has been reviewing the hundreds of outside law firms Wells Fargo hires, Parker said.
Parker’s input on how legal tactics affect businesses, regulatory relationships and public perception has been extremely influential, said Betsy Duke, incoming chair of Wells Fargo’s board of directors.
“Allen brings an outsider perspective at a time when we are really inviting inspection,” Duke told Reuters. “He can take a Wall Street and a Washington view of things.”
As a longtime deal lawyer with no experience inside a large company – much less one battling a massive scandal – Parker might seem an unusual pick for Wells Fargo.
But as Cravath’s presiding partner from 2013 to 2016, he made principles and culture the focus of his tenure, holding “fireside chats” about ethics with CEOs of major corporations.
His experiences helping Cravath deal with a cyber attack and counselling other banks on difficult issues were also assets, according to Wells Fargo CEO Tim Sloan.
Sloan met Parker at a charity event in 2012. Four years later, Sloan was thrust into his current job after the sales scandal forced out his predecessor, and Wells Fargo’s general counsel was fast approaching retirement.
Sloan said he had many reasons to hire Parker, but one that might go unappreciated, given his legal role, is his keen business sense.
“He’s very commercial,” Sloan told Reuters. “I’ve found him to be very helpful in terms of talking about strategic business or product-type decisions that we might be making.”
Those who have dealt with Parker through his career say he is the type of colleague who remembers names and attends funerals more than most. But he is not above a good joke. One friend recalled that after Parker helped him resolve a personal dispute with a babysitting service that overcharged by $944.32, he received a bill from Cravath for the same amount.
“It is a real gift to have that good a sense of humour and yet not have hundreds of embarrassing anecdotes about you,” said Robert Baron, a Cravath partner.
Reporting by Dan Freed in New York; Editing by Lauren Tara LaCapra and Bill Rigby