The Wells Fargo banking scandal. Cheats at Work and Corporate Myths

Wells Fargo is fined

On September 8, 2016, the Wells Fargo bank paid a $100 million dollar fine to the Consumer Financial Protection Bureau, $50 million to the City of Los Angeles and $35 million to the comptroller of the currency. These fines were incurred after Wells Fargo acknowledged that between 2011 and 2016 its branch-bank employees had opened up roughly 1.5 million bank accounts for customers and sent them 565,000 credit cards without their knowledge and permission. Some customers noticed these infractions when, for example, they received credit cards in the mail they did not request, or in more egregious cases, debt collectors approached them about accounts they did not recognize. Yet it seems as if the overall impact on the bank’s customers was limited. For example, many sham bank accounts went unnoticed because bank employees would close them shortly after opening them. Strikingly, the bank did not profit greatly from these infractions. Assessing the damages its customers incurred, the bank refunded about $2.6 million to aggrieved customers, a rounding error for a company with about $20 billion in net income. This is also why the total fine incurred, $185 million, was relatively small. For example, Citigroup payed $7 billion in fines for misleading investors about the toxic mortgage products it sold them in the run-up to the financial crisis of 2007. Indeed, Wells Fargo had emerged relatively unscathed from that crisis having avoided selling such mortgages.

Yet there was something unseemly about the fraud. The bank had betrayed the trust of everyday customers who depended on a bank to be the steward of their money. For example, some customers were told that they needed separate banks accounts for different needs, such as grocery shopping, or traveling. As one employee noted, “They would deposit their money and get hit with fees like crazy, because they got confused about what account they were using.” They would use the wrong debit card and overdraw their travel account, and then when they came back three months later, they would lose hundreds of dollars from their next check paying off those fees.” If the bank in aggregate did not steal much money from its customers, the average refund was about $25, it nonetheless did steal from them through everyday encounters. These actions communicate a disregard or even contempt for customers, particularly since these actions of petty theft or misdirection appeared institutionalized. In a sense, a single large theft, like the sale of a toxic mortgage, is egregious. But small petty thefts are corrosive.

Yet when confronted with the evidence of such infractions from at least 2008 onwards, the bank’s senior officials did not see this as evidence of any systematic flaw in the company's culture. Instead, they believed it was due to rogue employees’ misconduct. This framing was shaped party by the relatively small number of employees, one percent in any given year, who were fired for misbehaving.  As one senior executive commented, “(this number) is mind- boggling so low – I think it shows (that) our [employees] are significantly more ethical than the general population.” When in 2016 the Wells Fargo Board of Directors examined the scandal, its final report noted that, “The senior leaders did not consider that the 1% represented only employees who were caught engaging in sales practice misconduct. Moreover, even accounting for the Community Bank’s high turnover rate, firing 1% of the workforce each year meant over time that more than 1% were engaging in terminable misconduct.” The bank in fact fired 5,300 employees from 2011 to 2016.

Testifying before a senate subcommittee investigating the Wells Fargo scandal in September, 2016, John Stumpf, the bank’s CEO from 2007 to 2016, “Disagreed with senators when they described the illicit sales as part of a deliberate scheme to increase the bank’s bottom line. He said the 5,300 employees who had been terminated over the issue — many of them earning $12 an hour — deserved to lose their jobs. ‘The 5,300 were dishonest, and that is not part of our culture.’”

Cross-selling in a retail environment

Senior management’s framing of the situation - rogue employees, not our culture, was to blame- was rooted partly in their conception of the bank’s branches as retail outlets. Their primary task was selling products rather than serving customers. As the board of directors’ report notes, “The Community Bank identified itself as a sales organization, like department or retail stores, rather than a service-oriented financial institution.” What difference did this conceptualization make and how did it make a difference?  Consider the following argument. 

Beginning with the merger of Wells Fargo with the bank Norwest in 1998, the merged company under the direction of its CEO Richard Kovacevich, by all accounts a charismatic leader, developed a strategy for growing revenue and profits by “cross-selling” products to customers.  This meant persuading customers who for example only had a checking account, to take on additional products such as a credit card, a market savings account, a home equity loan, and auto insurance. The underlying conception was simple though not easy to execute. It was more profitable and less costly to sell more products to the customers you have than to acquire new ones. As one observer notes, “Kovacevich, credited with developing the bank' s obsession with cross-selling products to its customers, viewed banking as a commodity business and preferred to compare Wells Fargo to merchants like Wal-Mart or Lowe' s rather than to Goldman Sachs.”

The strategy was successful. In 2012, Wells Fargo had the largest market capitalization of any American bank ($161 billion), including JPMorgan Chase, which had twice Wells Fargo’s assets. It averaged 6 products per customer in its retail banking business; better than any rival and more than twice the industry’s average. As one observer wrote, “Wells Fargo has about seventy million customers. In the past thirteen years, during its cross-selling mania, Wells has increased the average number of products, per customer, from about four to more than six. That means it has sold a hundred and forty million more products than it would have otherwise, transferring more of its accounts from that $41 low-end toward the $1000 high-end. Wells Fargo has surely made tens of billions of dollars, and likely hundreds of billions, by employing its aggressive cross-selling approach.”

As this last observation suggests, to achieve these results, Carrie Tolstedt, the head of the community bank--the division that oversaw the branches—along with her executives and managers, put great pressure on bank-branch employees to sell products to its customers aggressively. To give an example, the Wells Fargo board’s report notes that senior management developed 50/50 sales goals for the bank’s different regions. This meant, as the report notes, “That there was an expectation that only half the regions would be able to meet them.” The report goes on to note, “Once set, the sales goals were pushed down to the regions, and ultimately to Wells Fargo retail bank branches, and at each level in the hierarchy, employees were measured on how they performed relative to these goals. They were ranked against one another on their performance relative to goals, and their incentive compensation and promotional opportunities were determined relative to those goals. That system created intense pressure to perform and, in certain areas, local or regional managers imposed excessive pressure on their subordinates.”

Similarly, bank managers used “Motivator” reports which contained monthly, quarterly and year-to-date sales goals, and highlighted sales rankings down to the retail bank district level. “Circulation of the reports — and their focus on sales-based rankings — ramped up pressure on managers, such that some ‘lived and died by’ the Motivator results. Witnesses also described that in some areas there was an extremely competitive environment, driven in significant part by regular rankings.”

Finally, the Community bank had a program called “Jump to January” which focused on branches selling products strongly in January as a prelude to meeting annual sales goals. But over time employees responded to the pressure through bad sales practices for example, by listing friends and family as targets, funding accounts customers opened with small amounts of their own money, opening accounts for customers without their knowledge but then closing them shortly afterwards, providing false phone numbers linked to new accounts so that bank managers could not check them, or withholding likely sales that could have been made in December to reach the ambitious January targets, a process called “sandbagging.”

Slippage and cheats at work.  

Senior executives were aware of such tactics as early as 2002. In that year, a “sales integrity task force” introduced a training program for branch employees, in 2005 an employee wrote to HR about the opening of sham accounts, in 2008, responding to other reports, the bank  began investigating sham accounts, in 2009 two employees complained to a Wells Fargo hotline about such practices, in 2010 management added sales quality measures in assessing branch productivity, (for example 85% of new checking accounts had to be “funded,” i.e., money was deposited in the accounts), in 2011 the bank began firing employees suspected of misconduct, and in that same year the community bank formed a “sales quality project group.”

This record of response suggests that the bank saw the problem not as an ethical one in which the bank and its employees had crossed a red line, but as a management problem which required judicious intervention to minimize misconduct rather than to eliminate it. As one senior manager phrased it, the problem was akin to “jaywalking,” an infraction one could never eliminate but one could contain.

One clue to management’s conception of the issue is their supposition that employee misconduct represented “slippage.” Those familiar with retail environments will hear the resemblance of this term to the notion of “shrinkage,” the belief that a certain percent of goods on the shelves or floor will disappear due to breakage and employee theft. As we have argued, senior managers saw the bank branches as retail outlets. This suggests that employees, by “gaming the system” a phrase senior executives used to describe employee misconduct, were not so much cheating customers as they were ripping off the bank, for example by opening accounts for family members and friends in order to meet sales objectives and win the appropriate incentive pay. This shifted management’s attention from possible customer harm to employee cheating.  

Indeed, there is a longstanding tradition in the anthropological study of work to describe and theorize criminal conduct at work. In a famous book, Cheats at Work, Gerald Mars outlines all the way people rip-off their employers, for example, cashiers not ringing sales and taking the money, or ringing up false refunds and pocketing the money, with the results showing up as inventory shrinkage.

One hypothesis is that in formulating their emotional response to the evidence of employee misconduct, Wells Fargo executives imagined that they were thinking realistically about a work-world where relationships between employers and employees are contested, and some people, when given a chance, are dishonest, particularly when they earn low wages, and feel no loyalty to their employer. Cheating in this sense is one expression of the texture of industrial relations, within which employees and employers fight over pay and working conditions. In 2012, branch employees could earn as little as $11.75 per hour.  Moreover, as the board report notes, “Community Bank leadership regularly likened the retail bank to non-bank retailers, a view that created a tolerance for high employee turnover. The community Bank-wide rolling 12-month average turnover reached at least 30% in every period from January 2011 to December 2015, and as high as 41% for the 12-month period ending in October 2012. Some Community Bank leaders did not view reducing turnover as a priority because they saw high turnover as a normal aspect of a retail business.” The board report goes on to note that Carrie Tolstedt, the community bank’s head had offered, “That there were always people willing to work in Wells Fargo branches.”

Worker stress

This veiled contempt for the “run-of-the-mill” retail worker and the realistic view that employers and their workers are at odds, probably helped senior executives turn away from the evident stresses that at least some branch employees were experiencing. Workers described these stresses to journalists. Consider these two reports.

“Managers kept a board right by the teller line where we would write how many people we had talked to, how many we had referred to a banker and how many sales were closed. At the end of the day, the manager would call out each teller in front of everybody and share their results. It was a frightening experience. If tellers did not have any sales on the board, you did not want to be that person. The last three months were hell. Even though I was reaching my sales goals, it was not enough for them. Every morning I had to sit with my boss and go over the previous day and every single customer’s relationship. I had to tell them why I didn’t force them into opening that third, fourth, fifth checking account that they could have used for Christmas, their son’s birthday, school, a pet and so on. I had to explain why I did not feel comfortable with pushing people into paying for something they did not need. I was so stressed out, I developed shingles. The last straw was when the district manager laughed at me in front of my manager because I explained that I did not feel comfortable with the sales culture and the robotic paragraphs they had us memorize.”

"We would have conference calls with regional presidents and managers coaching us on how to word our selling points so the customer can’t say no. I felt like a cheat. I started losing sleep and got nauseous every Sunday night over the start of the next workweek. 

This year, I reported a customer incident to the corporate office and the ethics line. Soon after, my district manager showed up. Not his usual friendly self, either — he just grabbed my manager and sat in the back office with the door closed. I started to feel sick.  After an hour or so, he walked out. My manager then called me into the back office to give me a performance improvement plan. Retaliation at its finest. I never had any conversation with anyone regarding my performance, or my interactions with customers, lack of sales or my attitude. I felt cornered and just low. For the first time in my career with the company, I did the right thing — and I was reprimanded for it. I almost left without having a backup plan, but then I was offered a job at a dealership. It was a pay cut at first, but is very rewarding compared to what I endured.”

Moreover, the board report notes that there was a direct correlation between sales pressure and the number of terminations and resignations. “Trends in the data show, perhaps not surprisingly, that as sales goals became harder to achieve, the number of allegations and terminations increased and the quality of accounts declined. Thus, the number of sales integrity-related allegations and associated terminations and resignations increased relatively steadily from the second quarter of 2007 and both peaked in the fourth quarter of 2013, when a newspaper article brought to light improper sales practices in Los Angeles.”

It is well known that job stress triggers turnover. This is probably why turnover reached a high of 41% in the year ending in October 2012, a period in which sales pressure was intensifying and was close to its peak.

Persuasion or deception?

There is an additional feature of the selling environment which I suggest shaped management’s response. There is a fine line between persuasion and deception when businesses offer goods or services that are not essential. Consider for example offering a bank customer separate accounts for different purposes, such as home improvement, insurance and travel. Such an offer can complicate a person's task of keeping each account balanced so as not to incur penalties for writing checks against accounts with insufficient funds. But this offer is not all that different from credit unions that offer vacation club or Christmas club accounts in which a person deposits funds but withdraws them only in specified periods.

Indeed, one finding of behavioral economics is that people engage in “mental accounting,” defined as, “the tendency for people to separate their money into separate accounts based on a variety of subjective criteria, like the source of the money and intent for each account.”  The practice is irrational in the sense that I should not save dollars for a vacation if at the same time, I have unpaid credit card debt because I financed home repairs. Better to pay down my credit card debt to save on interest payments incurred, rather than to separately save for my vacation. Yet mental accounting persists partly because people use them to control their impulse to spend money in trivial or wasteful ways that can deprive them of meeting longer term objectives or desires, for example paying tuition or going on a family vacation.

What then are the ethics of persuading people to open multiple checking accounts?  On the one hand, it fits with customers’ innate and preferred mental accounting methods, on the other, it exposes them to the risk of not funding accounts and incurring unwanted bank fees. Most likely, some Wells Fargo customers, those who could keep tabs on their checkbooks, benefited from having several checking accounts, just as others were hurt when they wrote checks against accounts with insufficient funds. 

The same fine line characterizes the sale of many banking products to a single customer; the heart of any cross-selling program.  On the one hand, it offers customers the comfort and simplicity of dealing with just one bank. On the other, it means that customers do not take advantage of better offers that competing banks or other financial service companies proffer, for example, better terms on an auto-instance policy. The classic term “buyer beware” means that it is in the legitimate interests of sellers to mask these costs and instead emphasize the benefits of their products and services. The extreme case clarifies the average ones. Pharmaceutical firms in the U.S. must reveal all the dangerous side effects of the drugs on offer, though in television ads the latter are often verbalized in a more hurried tone than the initial pitch for the drug’s benefits. But Coke and Pepsi and the purveyor of children’s cereal are not required to highlight the long-term debilitating effects of excessive sugar intake on health.

More broadly, it is standard issue advertising to persuade potential buyers by linking products or services to other represented, but not explicitly articulated, needs or wishes. A recent and deliciously witty television ad for the automobile maker Volkswagen (VW) evokes the movie King Kong, by showing the gigantic ape floating through the sky over New York City in order to follow a VW car moving along the streets below; only the car is driven by a lovely blonde woman whose puzzled and then bemused face we glimpse a few times. The reference to King Kong evokes the story of the giant ape falling in love with Ann Darrow, played by Fay Wray, in the original 1933 movie. The ad provokes the simple association that the Ape is in fact following the woman, not the car, in this way linking car buyers to the prospect of either capturing a beautiful blonde (for men) or of being pursued as one (for women). We accept this misdirection, understanding that in an economy when most purchases are discretionary, our desires for goods and services are multisided and are shaped by an underlining plasticity.

The dark side of business

Let me propose the following hypothesis. The backdrop to customer harm, employee cheating with its evident stress and resulting turnover, and the bank’s selling programs, evoked in Wells Fargo’s executives the dark side of business dealings, a side that managers in many companies, I suggest, see as realistic, if unattractive. It underlines for them the exigencies and tradeoffs of doing business, and makes the concept of ethical red lines problematic for them. Confronting what Robert Jackall calls in his seminal work, managers’ “moral mazes,” managers resort to everyday pragmatism and incrementalism, making adjustments on the margin to delimit the destructive consequences of their programs and systems while advancing their interests. As Jackall writes, “a principal managerial virtue and, in fact, managers’ most striking actual characteristic is an essential, pervasive, and thoroughgoing pragmatism.”

This explanation accounts in part for the bank’s incremental approach to addressing the issue of employees gaming the system, a process that on occasion led to customer exploitation. It also sheds some light on the banks’ treatment of whistleblowers. The pattern is clear. In 2009 six employees in Montana sued Wells Fargo, arguing that they had been fired after they complained about unethical practices and sales “gaming.” The case was settled in 2011. In 2010 two fired employees sued the bank alleging that the bank had retaliated against them for complaining about fraudulent and illegal activities. Their case was dismissed in in 2012. In 2011, a manager in Pomona California, “Notified her district manager that bankers in her branch were falsifying bank documents and fraudulently opening accounts. Soon after, she was fired for ‘inappropriate conduct,’ and filed a Department of Labor complaint alleging that she was fired for whistle-blowing. The complaint is still pending.”

This conduct, firing whistle blowers, looks egregious, but it is not without its rationale. The managerial ethic values team players, and in the context of managerial pragmatism this means valuing those who understand the exigencies and tradeoffs that managers arrive at as they bob and weave between their own and their company’s self-interest and the abstract ethical principles which they may very well treasure in their outside lives. In a sense, managers arrive at a compact to support one another in the sometimes necessary but dirty work of doing business.

This dirty work is often evident in the internal political life of a company, in the way in which managers treat each other. Consider the following. A qualified manager is unlucky enough to be associated with the leader of a failed project. He is found “guilty by association,” without anyone explicitly telling him. He soon finds that he is no longer included in certain important meetings, his peers no longer seek his counsel and advice, nor is he selected to participate in a training program for “high potentials” along with his peers. In effect, he experiences a kind of “social death” in which the signals of his demise are all indirect, partly because political coalitions that shape the competition for opportunities and advancement are sub-rosa. His peers can’t befriend him because he was on the “losing side.” A bureaucracy as Jackall notes, is in this sense less an organization for rationally linking means and ends and more a setting for the competition between clans and patrimonial alliances.

Seen in this light, the whistle blower signals that he or she is not a team player, who indicts not only a practice, but the managerial ethic of adjustment which after all imposes a certain psychological cost on those who embody it. Complying with a colleague’s social death is psychologically taxing. Tolerating harm to customers and employees, is psychologically taxing. Whistle blowers threaten to upend the compromise between managers’ attunement to their social survival, and their responsiveness to their own personal ethics. Whistle blowers are therefore isolated, if not punished, even if their charges are later considered seriously and are used to revamp bad practices, particularly those that may sully the company's reputation. I have no direct evidence that the whistle blowers’ charges triggered some of the incremental changes the bank made to deal with the problems of cross-selling products. But I suspect that they did. They killed the messenger but accepted the message.

Corporate Myths as protective defenses

Anthropology, as Abraham Zaleznik notes, “has taught us that myths are used to confront a problem and provide one or more solutions that allay anxiety, put fears and uncertainty to rest, and above all, link the individual to society.” The 19^th century novelist Horatio Alger, created the durable American myth of the plucky and honest young boy who by dint of his character and choices can rise from “rags to riches.” It was a myth in the sense that it provided hope to the poor who dreamt of succeeding, and comfort to the wealthy made anxious when viewing the gap between rich and poor. Its message of inclusion helped paper over the extremes of wealth and poverty in America’s “gilded age.” Let me propose that the myth of teams played such a role at Wells Fargo, at least for senior executives. Its salience was one measure of the psychological tax that the bank’s unethical practices imposed on managers’ consciousness, and was a signal of the discrepancy between underlying reality and conscious belief. It protected particularly senior managers who worked at some distance from the trenches, from those truths, that if confronted, could provoke discomfort, anxiety and the experience of cognitive dissonance.

Consider the following. Beginning with Kovacevich, the creator of the bank’s cross-selling strategy, the bank’s senior management has produced, refined and published a vision and values document meant to inspire and guide employee behavior. The statement emphasizes that the bank’s members are not employees but are team members, “Because our people are resources to be invested in, not expenses to be managed — and because teamwork is essential to our success in helping customers.” Describing the banks desired relationships to its customers, the document notes; “We have to earn that trust every day by behaving ethically; rewarding open, honest, two-way communication; and holding ourselves accountable for the decisions we make and the actions we take.” Linking customer relations to employee relations, the document highlights in bold, “We’re a relationship company, but our relationship with our customers are only as strong as our relationships with each other.”

We might dismiss this as simple propaganda, a discourse that is consciously understood by those who propagate it to be a lie. After all it stretches the imagination to consider employees a team when, as we have seen, close to a 1/3 of the community bank’s employees quit every year. But consider the observations of an astute Forbes reporter who visited John Stumpf the bank's CEO before he is was fired by the board in 2016. Reflecting on the banks positioning as “family friendly,” the reporter observes that Stumpf's informality, frugality and family history reflects his genial openness to employees and customers. It is worth quoting his report at some length.

“Wells (Fargo) down-to-earth approach isn't just for public show. You don’t see John Stumpf at the World Economic Forum in Davos and that’s good says Mike Mayo, an analyst at Credit Lyonnais Securities Asia. In contrast to John Thain’s (CEO of Merrill Lynch) $35,000-toilet-adorned office, Wells’ executive suite seems trapped in the 1970s, down to the orange-brown carpeting and tired-looking upholstered chairs in Stumpf’s office. During Forbes ’interview pipes clanged as the heat came up. The CEO’s credenza is cluttered with banking tchotchkes and family pictures, including one of his ­father and mother surrounded by 30-plus grandchildren. But despite his trophy-driven industry, his office is noticeably devoid of plaques or Lucite deal toys. It’s also devoid of something else you’d expect: a door. ‘Around here if you have something to say, you say it, nobody is going to be offended,’ says Stumpf of his policy of no doors on the executive floor. ‘We’ve learned how to disagree without being disagreeable. There’s no tolerance for being passive-aggressive or for having sharp elbows around here.’”   

The reporter goes on to note, “Stumpf’s father was a dairy farmer in the German Catholic enclave of Pierz, Minn., and his 10 children (Stumpf shared a bedroom with his brothers until he got married) were expected to pitch in. From age 10, when his dad added a chicken barn for 10,000 laying hens, Stumpf would rise at 4:30 a.m. to pick eggs; after school, he milked cows. ‘Even though we were very poor financially we learned the value of plural pronouns, we and ours,’ says Stumpf, who has kept his flat prairie accent. There wasn’t a lot of time for I, me and my.’”

“During the harsh winters, the family drank beer (each member had his or her own stein, says a college friend). They also played bridge. (Stumpf still plays, mostly online, sometimes partnering with Buffett’s sister Bertie against her brother or Bill Gates.) But card smarts did not translate at high school; Stumpf graduated in the bottom half of his class, and those bad grades and limited family finances netted him job as a bread maker in a Pierz bakery.”

The picture here is one of modesty, openness, frugality, and the “common touch.” Stumpf does not put on airs, is secure in his sense of self, does not dominate others, and welcomes influence and feedback. As CEO, he appears to embody the features consonant with the bank’s self-concept, as represented in its vision and values statement, that it thrives on team-work. In other words, he can represent what I am calling the myth of teams honestly, an exemplify it to his subordinates. 

To be sure my skeptical reader may counter that it is all for show. But consider the observations of another reporter. “Wells Fargo even has its own version of George Bailey/Jimmy Stewart (from the famous movie “It's a Wonderful Life,” shown on TV in the U.S. every Christmas); CEO John Stumpf, who spins out the kind of corny, homespun sayings you might find embroidered and framed on the wall of Aunt Tilly s lake cabin. ‘When we hire somebody around here, we want to know how much you care, before we care how much you know,’ he says, without the slightest hint of irony as we sit with him at his San Francisco office.”

My own instinct is to agree with this last reporter; that Stumpf held to these beliefs without irony. For example, when Carrie Tolstedt retired as head of the community bank well after the Los Angeles Times first exposed the cross-selling scandal, but before the scandal became headline news, Stumpf gave her a glowing farewell, calling her “a role model for responsible leadership” and “a standard-bearer of our culture.” Unless this statement is cynical it suggests that he saw the scandal as an aberration, the action of only 1% of the employees, and believed as he later told the senate committee investigating the scandal, that Tolstedt had in fact improved customer loyalty which was “top of class among large banks.” Moreover, as we have already noted, “Mr. Stumpf disagreed with senators when they described the illicit sales as part of a deliberate scheme to increase the bank’s bottom line. He said the 5,300 employees who had been terminated over the issue — many of them earning $12 an hour — deserved to lose their jobs. ‘The 5,300 were dishonest, and that is not part of our culture.’”

Stumpf as team coach, not leader

Consider finally the following. When pressed by the senate committee about why he was not now recommending that the board rescind some of the compensation Tolstedt had received upon her retirement (though she later had to forfeit $47.3 million), he responded “I am not part of that process. I want to make sure nothing I say will prejudice their process.” He said this even though he had been board chair since 2010.

This last statement is open to several interpretations, for example, he felt very loyal to Tolstedt which is very likely true. He regarded her as a brilliant community banker who had made good on the banks’ cross-selling strategy. Or, alternatively he was simply evading responsibility. I want to propose a third possibility linked to his idea of the bank as a team; a central plank in the bank’s vision and values statement, the locus of its myth, and the motivating idea behind Stumpf’s presentation of his roots. (“There wasn’t a lot of time (in my family) for I, me and my.”)

Stumpf inherited the cross-selling strategy from Kovacevich. The latter developed the idea while he was the CEO of Norwest and brought it over to Wells Fargo when the two banks merged. He was in essence the father of the bank’s success. Tolstedt in turn executed this strategy, and according to Stumpf, she did so brilliantly. This suggests that Stumpf saw himself more as a steward of a strategy. In team terms, he was the good coach, protecting the framework for the banks governance so that everyone else, particularly those close to the customer, could succeed.

Indeed, the bank itself was quite decentralized and the presidents of the different divisions, such as the community bank, were encouraged to run their pieces of the business as if they owned them. This was one reason why staff members of the corporate (central) legal, risk and HR divisions ultimately had little impact on the community bank, even as they suspected that its cross-selling strategy might have deleterious effects on the bank’s reputation. As the board report notes, “Corporate control functions were constrained by the decentralized organizational structure and a culture of substantial deference to the business units.”

I think the term “deference” is suggestive. As the steward of the successful cross-selling strategy he deferred in spirit to Kovacevich’s legacy as the founding father, and as Tolstedt’s supporter and cheerleader he deferred to her program of executing the strategy. This placed him at many steps removed from the ongoing and visceral experience of the strategy in the trenches and enabled him to represent with great honesty the mythological structure of the bank’s culture, as embodied in its vision and values statement. This is why he could say without embarrassment that the 5,300 employees who were fired were simply dishonest. Moreover, as the CEO, his stance provided emotional cover for other senior managers who identified with him. By internalizing his conviction, they too could take up the bank’s myths about itself as a team system, and so discount the likelihood that they too were engaged in some of the bank’s dirty business.

Myths for elites

What this suggests is that the myth was for the elites, while the “commoners” absorbed the stresses and anxieties of everyday practice. It is striking in this regard that when branch managers on the West Coast complained about punishing sales targets, senior executives saw this “as simply a cover-up for poor management; to them, sales quality and integrity issues had to be resolved through better management, not decreased goals.” In other words, the core tension at the heart of the business model, selling customers products they did not ask for was to be held and managed near and at the bottom rather than at the top of the organization. This can be one consequence of a hierarchical system. The dirty work migrates to the bottom where it creates undue stress, while the organization’s myth, suffusing consciousness at the top, protects the elite from the discomfort and anxiety that the dirty work triggers.

In sum

There is little doubt that Wells Faro exercised undue pressure on its employees to cross sell its products, a central feature of its strategy for success. The impact on particular customers was harmful, though the scale of the exploitation was not great. Individual employees experienced significant stress, many others quit while whistle blowers were fired. Yet senior executives framed the issue as a problem of rogue employees, insisting that its systems, procedures and culture promoted honest work. This happened in part because, looking at the bank as a retail operation they saw employee misconduct as the common and familiar feature of settings in which low wage employees cheat employers by gaming the system to their benefit. “Slippage in the bank was the analogue of “shrinkage” in a retail outlet.

In addition, employees and managers were exposed to the dark side of selling where there is a fine line between persuasion and deception, particularly when customers are buying discretionary goods and services. Confronting the dark side of the business-- cheating, deception, and stressed employees -- which to managers and executives appears as a realistic as against an idealized version of their experience, managers responded pragmatically to contain difficulties rather than confront them. They did not create in their minds or in practice ethical red lines which if fully implemented would have overturned the bank’s business model. Instead, they sought to manage tradeoffs for example, developing training programs, adding sales quality measures and firing rogue employees. This incremental response was consonant with a more general managerial ethic which is to juggle their personal ethical beliefs with the politics of corporate life where, often enough, colleagues are treated poorly and truth is temporized.

Yet this all took place against the backdrop of a “visions and values” statement, that has been in force for decades. The statement lauds team work, the value of every employee and ethical conduct with customers. This statement was part and parcel of a myth-making process in which senior executives believed that the bank was one big team, executives were modest, the company was frugal and its practices and purposes were down to earth. John Stumpf exemplified this myth in his personal being, but did so in part by removing himself from the company’s dirty work. He succeeded the creator of the cross-selling program, Dick Kovacevich and helped sustain its execution by supporting the brilliant community banker Carrie Tolstedt. In this sense, he was the ideal coach to the team rather than its key player. He functioned at an emotional remove from the bank and its work, and this distance enabled him to embody, with full sincerity, the myth of the bank as honest and team centered. Executives who could identify with him could gain succor from this myth’s meaning, which protected them in turn from the anxieties associated with the company's dirty work. This only served to further institutionalize the work itself by facilitating the scapegoating of the “rogue” employee and the whistleblower.

James Comey's fateful decision: rational thinking versus emotional bias

The backdrop to Hillary Clinton’s email scandal

On September 11 2012, Islamic militants attacked the U.S. embassy in Benghazi Libya killing four Americans, including the U.S. ambassador to Libya, Christopher Stevens. Hillary Clinton, a member of President Obama’s cabinet, was the Secretary of State at the time. The attack and its aftermath set in motion an intense congressional investigation into who might be held accountable for it. Hillary Clinton took responsibility for failing to secure the embassy, though as she testified, security professionals in the State Department had handled the specific security requests pertaining to Benghazi. As she said, “I didn't see those requests. I didn't approve them. I didn’t deny them.”

This disclaimer did not satisfy congressional Republicans. Investigating further, the House Select Committee on Benghazi asked to see Clinton’s emails and records “to see what she and others know about the deadly attack and the response by the U.S. government.” This was when it became public knowledge that Clinton had used a private email server rather than the State Department email system to conduct government business. The focus on Clinton now expanded to include her careless if not illegal use of a private email system for sending and receiving classified information. After all, she had exposed such information to potential hacking or to viewing by people without security clearances.

On December 14, 2014 “Clinton’s lawyers delivered 12 boxes filled with printed paper containing more than 30,000 emails while withholding 32,000 emails deemed to be of a personal nature.” As ABC news reports, Clinton’s lawyers asked her, “ ‘Do you want us to keep the personal emails?' And she said, 'I have no use for them anymore.' It's then that they issued the direction that the technical people delete them.” In total, more than 30,000 emails were deleted, because as Clinton argued, they were personal and private “about matters that I believed were within the scope of my personal privacy.” On March 27, 2015 Republican representative Trey Gowdy suggested that Clinton might in fact be covering up emails that, were they available, would show that she willfully violated security protocols. As he noted, Secretary Clinton, “unilaterally decided to wipe her server clean and permanently delete all emails from her personal server."

On July 4, 2015 the Inspectors General of the Intelligence Community and the State Department sent a note to Congress’ intelligence oversight committees that it had found classified emails in a limited sample of emails Clinton had submitted as part of the Benghazi investigation. “The report by the inspector general’s office concludes that Clinton, the Democratic front-runner for president, handled email in a way that was “not an appropriate method” for preserving public records and that her practices failed to comply with department policy. The review found that Clinton, who had said her system was secure, also “never provided security details to agency officials responsible for safeguarding sensitive government information.” The presenting question became, was Clinton guilty of violating procedures that governed how classified information should be handled, and did her behavior warrant criminal prosecution?

Comey’s announcement on October 28

These events formed the backdrop for an extraordinary moment in U.S. political history. On October 28, eleven days before the 2016 presidential election, in which Hillary Clinton lost to Donald Trump, the head of the FBI, James Comey, announced that he was reopening his investigation into Clinton’s handling of her emails. He had closed the investigation in July of that year, finding that she had not intended to jeopardize state secrets by using a private email server. He added though, that she and her colleagues “were extremely careless in their handling of very sensitive, highly classified information.”

But in October, the FBI found, in an investigation entirely unrelated to Clinton, that a close Clinton associate had backed up thousands of Clinton's emails on her husband’s computer. FBI investigators in New York City suspected that this trove of emails might contain the 30,000 missing ones, or as Comey later testified to Congress, “We may be finding the golden missing e-mails that would change this case.”

Nate Silver, one of the premier political pollsters in the United States, argues, in a carefully examined study of the data, that Comey’s October announcement tipped a close election in Donald Trump’s favor. As he writes, “The impact of Comey’s letter (as opposed to other factors-LH) is comparatively easy to quantify. At a maximum, it might have shifted the race by 3 or 4 percentage points toward Donald Trump, swinging Michigan, Pennsylvania, Wisconsin and Florida to him, perhaps along with North Carolina and Arizona. At a minimum, its impact might have been only a percentage point or so. Still, because Clinton lost Michigan, Pennsylvania and Wisconsin by less than 1 point, the letter was probably enough to change the outcome of the Electoral College.”

Two days after Comey's October announcement, 99 attorneys general, former federal prosecutors and high-ranking Department of Justice officials from Republican and Democratic administrations released a letter castigating Comey severely. As they wrote, “Justice Department officials are instructed to refrain from commenting publicly on the existence, let alone the substance, of pending investigative matters, except in exceptional circumstances and with explicit approval from the Department of Justice officials responsible for ultimate supervision of the matter. They are also instructed to exercise heightened restraint near the time of a primary or general election because, as official guidance from the Department instructs, public comment on a pending investigative matter may affect the electoral process and create the appearance of political interference in the fair administration of justice.” They argued that Comey’s unprecedented decision left them “astonished and perplexed” and that his announcement “breaks with longstanding practices followed by officials of both parties in past elections.”

Yet Comey, acknowledged by everyone to be a person of great integrity, defends his decision with great conviction. As he later testified to a congressional committee, “I had to tell Congress that we were taking these additional steps. I prayed to find a third door. I couldn't find it. Two actions speak or conceal. I don't think many reasonable people would do it differently than I did, no matter what they say today. If you were standing there staring at that on October 28, would you really conceal that?  So I spoke. Again, the design was to act credibly, independently and honestly so the American people know the system's not rigged in any way. And that's why I felt transparency was the best path in July.”

The prospect of a rigged system

One important question is what accounts for this discrepancy. What accounts for Comey's conviction, for his experience of inevitability, as if he had no choice but to reveal he was re-opening the investigation, when compared to his colleagues’ equally strong conviction that his decision was unprecedented and deeply perplexing?

His reference to the belief that the “system” might be rigged provides one clue. During the election Trump introduced the trope that the election might be rigged. This was one variant of his general attack on Clinton as representing privileged elites who were above the law. This narrative was powerfully stimulated by the right wing critique that the Clinton Foundation itself was a quintessential criminal enterprise through which Bill Clinton made a great deal of money while providing rich individuals and heads of states privileged access to Hillary while she was secretary of state. Founded in 1997 and focused on humanitarian relief efforts, the Foundation had raised some two billion dollars through 2016. Peter Schweizer developed this theme in his book, published in May of 2015, titled Clinton Cash: The Untold Story of How and Why Foreign Governments Helped Make Bill and Hillary Rich, though he acknowledged that, “We cannot ultimately…prove the links between the money they took in and the benefits that subsequently accrued to themselves, their friends, and their associates.”

In addition, as Bethany Maclean of Vanity Fair reports, FBI Agents, primarily in New York, “had been trying over the last few years to put together a case involving financial crimes or influence peddling against the Clinton Foundation. One knowledgeable source says that agents went to several U.S. Attorneys' offices, trying to get prosecutors to open a case, before finally going to the Justice Department’s public-integrity office. This person says that the agents did not have any facts that would support prosecutors taking further steps. But angry agents leaked to The Wall Street Journal.” In addition, Ronald Hosko, who was assistant director of the FBI’s Criminal Investigative Division until he retired in 2014, told Maclean that a group of agents in the FBI’s New York office were tremendously frustrated, “that someone [like Clinton] could carelessly traffic in very sensitive material and walk away unscathed, arrogantly walk away and wait for her coronation.”

These events suggests that Comey was exposed to elements of the “rigged” narrative-- that the Clintons were criminals and that Hillary could not be held accountable -- within the FBI itself. I don't suggest that Comey in any away allowed this narrative to shape his fact-finding. His integrity and his commitment to following the truth as he uncovered it were far too strong. Rather, he could experience within his own agency the power of the “rigged” narrative to shape beliefs and expectations. He was sensitized to it in the extreme. 

His response to this narrative also shaped his decision making in the run-up to his first announcement on July 5, when he told the press that Clinton’s carelessness with her email did not merit a recommendation for indicting and prosecuting her. (The right wing attacked him for this on the grounds that the law required only that he find negligence not intent. But Comey was quite clear in his later Congressional testimony that 50 years of precedent and practice required intent.) [1]

The backdrop for his July 5 announcement is important to consider. On June 25, Loretta Lynch, the Attorney General of the United States, and Bill Clinton landed by happenstance at the Phoenix airport at about the same. “Lynch was in Phoenix for a routine meeting with local police officers, while Clinton was finishing up a fund-raiser for his wife. Seeing Lynch’s airplane, Clinton walked across the tarmac and entered it to talk with her. Lynch’s staff had no chance to intervene: they had already gotten off the plane. Clinton just wanted to say hello. But he then proceeded to talk to her for nearly half-an- hour about his grandchildren, about golf and about travel according to Lynch.”

Clearly the optics here were all wrong. The FBI was investigating Hillary. Following normal procedure, Comey would recommend whether or not she should be indicted. But it would be up to Lynch as Attorney General to make the final decision. But if a substantial number of citizens believed that that the system and the election were rigged, could Lynch, an Obama appointee and a Hillary supporter, credibly decide “no indictment” and maintain her standing as an impartial judge of the facts? How could voters be sure that Bill Clinton had not persuaded her, or even tried to persuade her, to go easy on his wife?

Recounting his response to this event, Comey told a Congressional committee, “A number of things had gone on which I can't talk about yet, that made me worry that the department leadership (Department of Justice headed up by Lynch-LH) could not credibly complete the investigation and decline prosecution without grievous damage to the American people's confidence in the justice system. And then the capper was -- and I'm not picking on the attorney general, Loretta Lynch, who I like very much -- but her meeting with President Clinton on that airplane was the capper for me, and I then said, you know what, the department cannot, by itself, credibly end this.”

Institutions versus persons

Yet in announcing to the press and public that he would not recommend indicting Clinton, Comey contravened deeply held convictions about the relationship between the FBI and the Department of Justice. In a memo Rod Rosenstein, the current Deputy Attorney General, wrote on May 8, 2017-- the day before President Trump fired Comey-- that, “Almost everyone agrees that the Director (Comey) made serious mistakes; it is one of the few issues that unites people of diverse perspectives. The Director was wrong to usurp the Attorney General’s authority on July 5, 2016, and announce his conclusion that the case should be closed without prosecution. It is not the function of the Director to make such an announcement. At most, the Director should have said the FBI had completed its investigation and presented its findings to federal prosecutors.”

Rosenstein goes on to note that Comey made his announcement without the authorization of duly appointed Justice Department leaders, that in calling Clinton extremely carless he was incorrectly releasing derogatory information, that in later defending his performance on the grounds that he was revealing the truth of the situation he was commandeering the role of a jury and judge. As an investigator, Rosenstein argued, Comey’s sole role was to determine whether there was sufficient evidence to justify a federal criminal prosecution.

Rosenstein’s memo expresses powerfully what we can call an institutional perspective. The latter is based upon the idea that precedents, role configurations and the formal distribution of authority create ethical obligations that require certain conduct while disallowing others. This perspective is based on the underlying idea that there is certain “wisdom” to our inherited practices, honed as they have been by the generations that have preceded us. These practices and the institutional design that embeds them are good enough; ensuring justice and fair play not every time but most of the time. When respected they protect us from the vicissitudes of personal prejudice, ambition, and a person’s desire for fame, sex, money and standing.

One can see the limits of the institutional perspective when in fact institutions are themselves deeply corrupted. One is reminded of extreme situations, for example the case of Dietrich Bonheoffer the German pastor who challenged the Nazi Party’s legitimacy. Standing against the 1933 rigged elections for protestant church officials, which the Nazi-party affiliated “German-Christian” movement won, he founded underground seminaries for pastors opposed to the party. He joined the German resistance movement, whose members tried to assassinate Hitler in 1944, and in 1945 he was executed. Under extreme situations courageous people in dark times have reference to ethical principals that stand against institutions and draw instead on a their personal relationship to supervening ethical ideals, for Bonheoffer, his original idea of “costly grace.” The person displaces the institution.

In his testimony to Congress, Comey evinces the idea of facing extremes. Describing his choice on October 28 to announce the re-opening of the Clinton email investigation, he says that were he to “conceal” his decision “down that path lies the death of the FBI as an independent institution in America (my bold). This prospect was so extreme that Comey, as he told Congress, was willing to violate a deeply held principle that, “If you can possibly avoid it, you avoid any action in the run-up to an election that might have an impact. Whether it's a dogcatcher election or president of the United States.” As Comey notes, “I've lived my entire career by (this) tradition.”

Strikingly, Rosenstein comes to just the opposite conclusion, that in announcing his reopening of the investigation into Clinton’s emails, “the FBI’s reputation and credibility have suffered substantial damage.” If we assume that Rosenstein and 99 attorneys general and prosecutors are good-enough assessors of what actions either protect or undermine the credibility of the FBI, then Comey’s anticipation that the FBI faced its “death” as an independent institution is not so much extreme as it is grossly exaggerated. But facing this imagined consequence, it nonetheless makes sense, from Comey’s point of view, that he should act against precedents and their institutional nexus, and take a stand as a person following his own ethical compass. 

A personal valence?

Some analysts have speculated that Comey had a personal valence for acting on the basis of his own ethical instincts even if this meant contravening lines of authority. This valence would make it more likely that he would interpret situations as extreme when others might see them as more nearly normal. In the oft-repeated story, John Ashcroft the Attorney General in the (second) Bush administration was hospitalized with severe gallstone pancreatitis. Comey was deputized as Acting Attorney General only several days before “the Justice Department’s regular 45-day legal reauthorization of the secret N.S.A. surveillance programs was due.”  Comey objected to facets of the program and he told the White house counsel Alberto Gonzales that unless these elements of the program were changed he would not agree to its reauthorization. Bush told Gonzales to seek authorization directly from Ashcroft, and Comey, upon learning of this plan, raced up the stairwell of the hospital to beat Gomez to Ashcroft’s hospital room. Comey told Ashcroft not to sign anything, and when Gomez reached Ashcroft’s bedside the latter told Gomez, “‘I’m not the Attorney General. There is the Attorney General,” and pointed at Mr. Comey.’” Bush then decided to reauthorize the program without Comey’s approval. But after Comey and Robert Mueller, then the head of the FBI, considered resigning, Bush modified the program to satisfy Comey.

When Obama later appointed Comey to head the FBI he praised Comey saying, “To know Jim Comey is also to know his fierce independence and his deep integrity… He’s that rarity in Washington sometimes -– he doesn’t care about politics, he only cares about getting the job done. At key moments, when it's mattered most, he joined Bob (Mueller) in standing up for what he believed was right. He was prepared to give up a job he loved rather than be part of something he felt was fundamentally wrong. As Jim has said, " ‘We know that the rule of law sets this nation apart and is its foundation.’ ”

It is a matter of speculation as to whether or not this event and the subsequent accolades Comey received influenced his self-concept in a way that distorted his judgment. According to this way of thinking we would say in psychological terms, that he had a valence toward taking up the hero role. Indeed, Matt Miller, Comey’s close friend and a former director of Public Affairs for the Department of Justice told Bethany Maclean that; Comey believes in the salience of his integrity. “In a way that creates big blind spots, because he substitutes his judgment for the rules.” Another said, “He is a man of integrity, and he holds himself to high standards. But he didn’t see the bigger issue. All he could see was, ‘Will they question my integrity?’ I think it was his integrity he was worried about, not the Bureau’s (FBI), and the Bureau’s integrity has suffered a devastating blow as a result of his decision-making. He would have protected the Bureau by playing it by the book.” What these close friends are saying is that he was susceptible to idealizing himself, as opposed to the institutional setting in which he took up his role.

Abdication

A psychological valence is like susceptibility. It does not so much trigger a sequence of events as it is triggered by a situation. One hypothesis is that Lynch’s response to Bill Clinton’s visit to her airplane was just such a trigger. Pressed by her poor judgment in accepting Bill’s invitation to talk on her plane, she announced subsequently in an interview at Aspen that she, “expected to accept” whatever Comey recommended. This phrase, to my ear, has the hallmarks of passivity and ambivalence; ambivalence because of the word “expect,” passivity because of the word “accept” unconditioned by the idea that she would exercise judgment in either accepting or rejecting his recommendation. After all, from an institutional point of view the FBI is not authorized to decide whether or not to prosecute a person. Rather, its role is to make a recommendation to a Department of Justice attorney who then decides.

To observers, Lynch chose the worst of both worlds. If she truly felt that her credibility as an independent judge of Comey’s recommendations was undermined, she should have recused herself and appointed Sally Yates, her Deputy, as Acting Attorney general in this matter. Or, if she had the fortitude to withstand political attacks, and assured by her self-knowledge that she could review his recommendations objectively irrespective of her figure as a leading Democrat, she should have exercised her prerogative and told Comey that he could not contravene practice and announce his conclusions to the press. In doing so, she may have risked his resigning but that would have been a political price she paid, a sacrifice to her own standing, in the service of protecting the institution she represented. As one person close to the event said, “It was an unfathomable decision to make. Lynch created a situation where the FBI director could freelance.” Another added, “Lynch was more than happy to have Jim Comey take responsibility. It was complete and total abdication.”

This suggests that Lynch enacted just the situation that triggered Comey’s valence to deciding based on his personal judgment, unconditioned by his role; to become in effect a hero in a drama of his own making. After all, in her passivity Lynch was communicating that she could not stand for and represent the Justice system, which in the wake of the accusations against Clinton, was in fact under duress. She amplified rather than contained Comey’s anxiety that it was left up to him to assure Americans that the system was not rigged. And, in the end he did not convey any recommendation to her. Nor did he tell her in advance that he was about to make a public announcement about this decision. In the end, there was nothing for her to “accept.” Instead, he made the decision himself to not prosecute Clinton, contravening all established practice. This is what so angered his attorneys general colleagues. 

Influencing elections

One question remains. Why was he so willing to contravene the strong tradition of never making statements, from his role as FBI director, that could influence elections? As I have already noted he told a congressional committee, “I've lived my entire career by the tradition that if you can possibly avoid it, you avoid any action in the run-up to an election that might have an impact. Whether it's a dogcatcher election or president of the United States.”

I have already offered one hypothesis. Comey felt that the cost of people feeling that the “system was rigged” was greater than the cost of contravening established practice and potentially influencing an election.

But I am unsatisfied with this hypothesis for the following reason. Testifying to this same congressional committee he said that, “It makes me mildly nauseous (my emphasis) to think that we might have had some impact on the election.” If the thought in that moment in front of the congressional committee made him mildly nauseous, it suggests that he did not give this thought much consideration when making the decision to re-open the investigation. Otherwise, he would have had time to metabolize the emotions associated with the possibility that he might influence the election. One simple hypothesis is that he believed, like many others, including professional pollsters, that Clinton was going to win the election.

A decision tree

I found it helpful to imagine how Comey would have made his decision if he had in fact engaged in a systematic examination of his alternatives. Consider the following diagram

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In this conception of a decision tree, Comey faced two separate sequences, one if he revealed that he reopened the investigation, and one if he did not. (It should be noted that at the onset of his reopened investigation Comey believed that he could not complete it until after the election.) The column on the right hand side represents the final impact on the FBI’s reputation of any particular sequence. The term “positive findings” means that the newly discovered emails would show that Clinton knowingly violated security protocols; for example, they contained a preponderance of classified emails when compared to the original cache. (In the latter, the FBI had identified 110 out 30,000 that were classified at the time they were sent.) Such a positive finding could indicate as well that the lawyers who culled her emails before submitting them to the FBI may have obstructed justice. “Negative findings” mean that the new cache revealed nothing more than the original set, which in the end turned out to be the case.

A perusal of the decision tree shows that if Clinton won there would be only one bad outcome. This would happen if Comey concealed his decision to reopen the investigation and the second investigation resulted in positive findings. In this case the FBI would stand accused of helping to elect a president who violated security protocols and whose lawyers, or potentially herself, had obstructed justice. This could confirm that indeed the system was “rigged,” and that the FBI was part of a rigged system, an outcome that Comey feared most. The yellow links show this. This helps explain why Comey experienced his choice to reveal as inevitable, as exclusively correct. Only concealing was bad.

But if Clinton lost, as indeed happened, and the findings were negative, revealing his decision to reopen the investigation would also create another bad outcome, the outcome that actually ensued, and for which Comey was excoriated. The red links show this. If Comey had considered both possibilities, Clinton losing or Clinton winning, then revealing and concealing each posed risks to the FBI. In this scenario Comey’s decision would no longer have the force of inevitability.

Emotional biases and decision-making

Based on this analysis it seems reasonable to assume that Comey and this team, for all the vigorous effort I am sure they committed to making the best decision possible, assumed that Clinton would win. That is why, when in front of the congressional committee, Comey said that he felt mildly nauseous when considering that he could have influenced the election’s outcome. But should we forgive him for assuming what many others, pollsters included, had assumed. Did he and his colleagues have an extra responsibility to explore the widest range of possibilities in the face of the most portentous decision he was about to make? 

I am drawn here to his use of the word “conceal” in assessing his options. As Rosenstein notes in his memo, “Conceal is a loaded term that necessitates the issue. When federal agents and prosecutors quietly open a criminal investigation, we are not concealing anything; we are simply following the longstanding policy that we refrain from publicizing non-public information. In that context, silence is not concealment.” In other words, the term “conceal” is on its face prejudicial. Who would want to conceal?

Let me propose that in using the term “conceal” he was biasing his thinking emotionally, pulling himself into the drama of intervening in the political process, a role that accorded with his self-concept as someone who could alone protect the public’s confidence in the country’s system of justice. This bias conditioned his decision making so that the choice to “reveal” seemed inevitable. He had no choice but to reveal. As I noted earlier, he told the congressional committee:

“When the Anthony Weiner thing landed on me on October 27 and there was a huge -- this is what people forget -- new step to be taken. If I were not to speak about that, it would be a disastrous, catastrophic concealment. It was an incredibly painful choice, but actually not all that hard between very bad and catastrophic. I had to tell Congress that we were taking these additional steps. I prayed to find a third door. I couldn't find it. Two actions speak or conceal. I don't think many reasonable people would do it differently than I did, no matter what they say today.”

Let me suggest that his bias toward action – let’s call it his heroic self-concept-- conditioned his thinking in a way that hampered him. He did not have access to the full play of rational thinking through which he could consider his situation in the round and ask what would happen if either Clinton lost or if Clinton won. If he had, he would have come to terms with the irreducible uncertainty of his situation. Instead, he found inevitability, which satisfied his need for action and for closure. In other words, his decision process did not lead him to an inevitable choice. Rather, his bias for an inevitable choice led him to a flawed decision process. If true, this conception reminds us how formal methods for guiding decision making, like a decision tree, can support good decision-making when emotions run high.

In sum

Comey was motivated to ensure the American people that the “system was not rigged.” Facing an abdicating Attorney General, he stepped into the breach and in the process violated long-standing precedents that governed the relationship between the FBI and the Department of Justice. He also tipped the election. Reviewing his decision in front of Congress he argued that he had no choice. He had to reveal that he was re-opening the investigation of Hillary Clinton, else he oversee the death of the FBI as a credible institution. This extreme view, contradicted by 99 attorneys general and prosecutors suggests that he had a valence for taking up the hero role and a bias for action. This valence and bias distorted his judgment by foreclosing his considering the effects of his decision should Clinton lose- the situation that actually ensued. One result, according to his colleagues, is that he has severely damaged the FBI’s reputation.

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[1] Comey: In the -- for generations -- generations I think is a fair way to say it -- the Department of Justice has understood that statute to require in practice -- and I believe they think in law -- to require a general sense of criminal intent. That is not a specific intent, but a general criminal intent and a sense -- a knowledge that what you're doing is unlawful, not violating a particular statute but some general criminal mens rea. I can't find a case that's been brought in the last 50 years based on negligence, based on -- without some showing or indicia of intent. That is not a specific intent, but a general criminal intent and a sense -- a knowledge that what you're doing is unlawful, not violating a particular statute but some general criminal mens rea. I can't find a case that's been brought in the last 50 years based on negligence, based on -- without some showing or indicia of intent.