Beyond The County: Wells Fargo CEO accused of fraud, Air Force base fire grows |

Beyond The County: Wells Fargo CEO accused of fraud, Air Force base fire grows

Wells Fargo Chief Executive Officer John Strumpf prepares to testify on Capitol Hill in Washington before Senate Banking Committee.
Associated Press | AP

Blaze at California Air Force base grows to 16 square miles

VANDENBERG AIR FORCE BASE, Calif. — Crews are working to surround a wildfire at a central California Air Force base that forced the postponement of a weekend satellite launch.

KSBY-TV reports Tuesday that the blaze at Vandenberg Air Force Base expanded to the south as it grew to more than 16 square miles. It is 18 percent contained.

Voluntary evacuation orders are in place for about 400 residents of the San Miguelito Canyon area just off the base near Lompoc.

There is no word of any structures threatened on the sprawling base, much of which is undeveloped and rugged mountain land.

Man whose dying girlfriend wrote initials in blood sentenced

LOS ANGELES — A Los Angeles man whose dying girlfriend wrote his initials in blood after her throat was slashed has been sentenced to 26 years to life in prison.

James Duane Grzeslo (GREZ’-lo) was sentenced Monday after a jury found the former Marine guilty of first-degree murder last month.

Prosecutors say the 59-year-old killed his girlfriend in her Beverly Hills apartment on Oct. 26, 2011.

Cathy Ann Carrasco-Zanini’s throat was slashed but prosecutors say the 58-year-old mother was able to write Grzeslo’s initials with her blood before dying.

Prosecutors say Grzeslo was possessive and jealous of his girlfriend’s friendships. Witnesses testified that Grzeslo said he used to turn people into Pez dispensers by slashing their throats when he was a Marine.

Prosecutors say Grzeslo was a Marine but lied about serving in Vietnam.

Too little, too late

WASHINGTON — The CEO of Wells Fargo faced accusations of fraud and calls for his resignation Tuesday from harshly critical senators at a hearing over allegations that bank employees opened millions of accounts customers didn’t know about to meet sales quotas.

Members of the Senate Banking Committee showed bipartisan outrage over the long-running conduct, unsatisfied by Chief Executive John Stumpf’s show of contrition.

Stumpf said he was “deeply sorry” that the bank failed to meet its responsibility to customers and didn’t act sooner to stem “this unacceptable activity.” He promised to assist affected customers.

Sen. Elizabeth Warren flatly told Stumpf he should step down. “You squeezed your employees to the breaking point so they would cheat customers,” she said. “You should resign. You should give back the money you took while the scam was going on.”

The Massachusetts Democrat, one of the fiercest critics of Wall Street, also advocated for a criminal investigation by the Justice Department and securities regulators.

Stumpf, a 34-year veteran of Wells Fargo and CEO since 2007, earned $19.3 million last year. The bank does have in place provisions its board could implement to claim back executive compensation.

Wells Fargo sales employees, trying to meet targets that called for every customer have eight products with the bank, opened more than 2 million bank and credit card accounts, regulators said last week in levying a $185 million fine.

Money in customers’ accounts was said to have been moved to these new accounts without their permission. Debit cards were issued and activated, as well as PINs created, without telling customers. In some cases, bank employees even created fake email addresses to sign up customers for online banking services, the regulators said.

Wells Fargo has long been known in the banking industry for its aggressive sales goals. Stumpf bristled at Warren’s suggestion that the sales practices were a “scam.”

He defended the cross-selling of products — trying to draw customers into taking on more — as “deepening relationships.”

The senators also challenged assertions that Stumpf and other Wells Fargo senior executives didn’t become aware of the problems until 2013 — when the sales misconduct was reported by The Los Angeles Times. The practices apparently began at least in 2009.

Carrie Tolstedt, the former head of the retail banking business, announced in July that she would retire from the bank this year. She is expected to leave with as much as $125 million in salary, stock options and other compensation.

Sen. Bob Corker of Tennessee said it would be “malpractice” if the bank doesn’t institute the compensation clawbacks, and Stumpf said the board “has the tools to hold senior leadership accountable,” including himself and Tolstedt.

Questioned again by Warren, Stumpf said the bank had not considered firing her.

Peppered with criticism for nearly three hours, Stumpf appeared taken aback by the intensity of the verbal lashing. At one point he stumbled a bit over his words.

“It struck me that he was berated in a way that shook him a bit,” said Chris Kotowski, an analyst at Oppenheimer & Co. That contrasted with Stumpf’s usual “poised, deliberate” manner when speaking in other venues, he noted.

Under the settlement with regulators, it neither admitted nor denied the allegations. It later said it plans to eliminate the sales targets by Jan. 1. Some 5,300 Wells Fargo employees have been fired.

Stumpf offered some detail at the hearing about who was fired, saying “bankers, bank managers, managers of managers, and even an area president.” They ranged in pay from about $35,000 to $65,000.

Wells Fargo Chief Executive Officer John Strumpf prepares to testify on Capitol Hill in Washington before Senate Banking Committee.

Senators heap criticism on Wells Fargo CEO, who apologizes

Pipeline will soon reopen, carrying gasoline to 5 states

ATLANTA — Gasoline should begin flowing again Wednesday — through a temporary bypass on a critical pipeline — after a major leak in Alabama forced a shutdown that led to surging fuel prices and scattered gas shortages across the South, a company official said Tuesday.

The roughly 500-foot (152-meter) section of pipe serving as the bypass is now complete, but supply disruptions may continue for days, Colonial Pipeline spokesman Steve Baker said.

Here are some details related to the spill that led to long gas lines and empty service stations:


Alabama state workers discovered the leak Sept. 9 when they noticed a strong gasoline odor and sheen on a man-made retention pond, along with dead vegetation, according to a report by the Pipeline and Hazardous Materials Safety Administration part of the U.S. Department of Transportation.

The preliminary report does not identify the cause as the federal investigation continues. It wasn’t initially possible to pinpoint the leak, partly because highly flammable benzene and gasoline vapors prevented firefighters and inspectors from approaching the site for days.

The company has acknowledged that since the spill was spotted, between 252,000 gallons and 336,000 gallons of gasoline leaked from its pipeline near Helena, Alabama. That’s no more than 37 truckloads at an industry-average 9,000 gallons per tank.

But because the leak forced a critical pipeline to shut down, its impact was far greater. The pipeline section that failed, built in 1963, runs from Mississippi to Atlanta.


Colonial Pipeline Co., based in Alpharetta, Georgia, was formed in the 1960s by oil companies to transport their product along the eastern seaboard. It now operates 5,599 miles of pipelines, transporting more than 100 million gallons daily of gasoline, jet fuel, home heating oil and other hazardous liquids in 13 states and the District of Columbia, according to company filings.

The pipe that failed is one of two Colonial lines connecting dozens of refineries in Texas and Louisiana with cities from Atlanta to New York. Usually running at full capacity, it provides nearly 40 percent of the Southeast and East Coast region’s gasoline.


The EPA fined Colonial $34 million in 1973 for gross negligence — at the time the largest civil penalty in EPA history — after it spilled almost a million gallons of diesel in South Carolina, polluting waterways in four states. The company also agreed to spend $30 million to upgrade environmental protections on its pipeline system. But spills happen often in the oil industry.

Since 2006, the company has reported 178 spills and other incidents that released a combined 193,000 gallons of hazardous liquids and caused $39 million in property damage. Most were caused by problems with materials, welding or some other equipment failure, according to federal accident records reviewed by AP.


The U.S. Environmental Protection Agency said in a statement Tuesday that its water samples are consistent with the Colonial Pipeline Company water samples.

“Current sampling results indicate that the Peel Creek and the Cahaba River are currently not impacted,” the statement said.

“We averted a disaster this time,” said David Butler, an environmentalist with Cahaba Riverkeeper who has been monitoring the spill response at the site.

This aerial photo shows a pair of water retention ponds at the site of a pipeline leak near Helena, Ala.

Nigeria sues for $12B in ‘illegal’ oil exports

LAGOS, Nigeria — Nigeria is suing several leading oil companies for $12.7 billion of crude oil that allegedly was exported illegally to the United States between 2011 and 2014, officials said Tuesday.

The Federal High Court in Lagos begins hearings next week in cases filed against Nigerian subsidiaries of U.S. multinational Chevron, British-Dutch Shell, Italian ENI’s Agip, France’s Total and Brasoil of Brazilian Petrobas, according to the court register.

Oil companies did not immediately respond to requests for comment.

Nigeria was Africa’s largest oil producer until militant attacks cut production and Angola overtook it in March.

The cases could provoke new anger against oil companies already accused of polluting farmland and fishing grounds. Local frustration has contributed to an armed movement in the oil-producing Niger Delta, where militants are demanding the multinationals pull out.

Officials familiar with the cases said Nigeria’s government alleges that the companies did not declare more than 57 million barrels of crude oil shipments. That was deduced from audits of declared exports and what was unloaded in the United States.

Some shiploads registered less when they left Nigeria and more on reaching the United States, while some entire shiploads were undeclared in Nigeria, said the officials, who spoke on condition of anonymity because the cases still are in court.

The United States was the biggest importer of Nigerian oil until it began exploiting its own shale oil reserves, though Nigerian exports to the U.S. have increased six-fold this year, according to OPEC.

Calif. home sales post solid gains

SAN DIEGO — California recorded its strongest August for home sales in three years as prices climbed modestly, a research firm reported Tuesday, providing fresh evidence of sustained gains in the housing market.

An estimated 43,542 new and existing houses and condominiums sold last month, up 5.6 percent from 41,247 sales in July and up 5.2 percent from 41,387 during the same period a year earlier, CoreLogic Inc. said. It was the highest August sales tally since 2013.

The median sales price was $432,000, barely changed from $430,000 in July and up 5.8 percent from $408,500 August 2015. It was the 54th straight month that prices have increased from a year earlier, though gains have moderated over the last two years.

Southern California’s median sales price was $465,000, matching a nine-year high set in June and July and up 6.2 percent year from $438,000 a year earlier.

Gains in the San Francisco Bay area were more tempered, according to CoreLogic. Sales in the nine-county region reached 8,374 homes, up 8.3 percent from 7,729 sales in July and up 3.2 percent from 8,113 sales a year earlier.

The median home sales price in the Bay area was $675,000, a second straight monthly decline after hitting an all-time high of $710,000 in June.

The California Association of Realtors said last week that affordability constraints and tight supplies hampered sales in August, particularly in the high-cost Bay area.

The group said California had a 3.4-month supply of unsold single-family homes, well below a normal supply of five to seven months. Supplies were tighter in the Bay area.

— Associated Press

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