If the CEO of Wells Fargo Bank thought he could get away with a mere apology to the Senate Banking Committee, he better start looking for another job. The questions fired at him by the Senators were not answered to their satisfaction. In fact, the hearing opened up more investigations of the Wells Fargo scam that impacted over 2 million customers.

Before posting this blog, John Stumpf, CEO and Chairman of the Board of Wells Fargo, resigned

Even though he told the Senators that he would stand by his bank and make good on any fraudulent charges to its customers, new issues emerged concerning potential violations of labor laws. If the rank-and-file employees working barely above minimum-wage rates were expected to work overtime at the office and on weekends, the government regulators want to know if they were properly paid for overtime. That kind of an investigation would result in additional fines and potential criminal indictments.

Another significant issue pursued by the Senate committee demanded rebates (officially called “clawbacks” in the high and mighty board rooms) by top executives of Wells Fargo of the bonuses and stock options they earned from the fake-account scandal that may go back as far as 2011. John Stumpf testified that he did not know about this customer scam until 2013. That begs the question of why he did not put a stop to it?

Wells Fargo board of directors immediately rescinded $41 million of stock options due to CEO Stumpf. That’s not a very big loss to the executive considering he already has vested $247 million worth of stock options that can’t be taken away. Stumpf will also forgo his $2.8 million base salary during the investigation and any bonus for the current year.

There’s no indication of a “golden parachute” payoff. Perhaps his retirement invalidated the severance-pay package. However, he does benefit from a generous pension worth $24 million.

The other responsible executive for the scam is Carrie Tolstedt, who already resigned her position in charge of community banking. She is eligible for a severance package of $125 million in stock and options but will forego any bonus for this year.

Now is the time for the board of directors to adopt a damage-control plan and stop having the top-ranking executives hide behind the fragile screen of ignorance about corporate strategy. Up to date, CEO Stumpf unsuccessfully tried to blame the fraud on lower-level rogue employees under pressure to reach sales quotas and bonus targets that some consider unrealistic.

A perfect example of passing-the-buck was a cartoon in the Salt Lake Tribune. It pictured the iconic Wells Fargo stagecoach rushing along while crushing people underneath. When the local sheriff (called Customer Protection Bureau) stops the coach with a warning, “You are trampling your customers!” the driver shoots “those bad horses.”

Political cartoons can tell a story in so few words.

A broader view of financial institutions’ power to disrupt the economy is again emerging. During the mortgage-loan fiasco that triggered the recent recession, critics claimed banks and financial service companies were too big to fail. That forced the government bailouts followed by more mergers by giant corporations becoming even bigger.

At the Senate hearings on the Well Fargo fraud, the “too big to fail” decree was fortified by a Senator saying that Wells Fargo was “too big to manage.”

What I want to know is where were the bank regulators while the Wells Fargo fraud was gaining momentum? For five years phony accounts were opened and closed creating millions of dollars of penalties and fees. It took an investigative reporter from the Los Angeles Times to uncover the wrongful customer charges even though several mediation claims were filed against the bank years ago. Banks cannot be sued in court by victimized customers for illegal charges under the terms of the agreement to open an account.

Apparently the government watchdogs that regulate most banking and financial organizations have been snoozing in the kennel, or looking the other way at political connections. If the Wells Fargo affair succeeds in criminal charges against corporate leaders, perhaps those bureaucrat regulators checking Wells Fargo will at least be put on administrative leave.

Round two of government investigations took place on September 29 when the House Financial Services Committee put John Stumpf through another verbal thrashing of his oversight and neglect to abolish the system that encouraged branch managers and clerks create false accounts. Again he was asked to resign by committee members. Again he defended his efforts to maintain a corporate culture that properly served customers, concluding with his statement that he served at the pleasure of the board.

The outcome of the two congressional hearings indicate that management believes the fraud against customers was not the result of the corporate culture but the fault of rogue employees who had already been eliminated. CEO Stumpf still blames those bad horses.

An ironic event happened the same week John Stumpf retired. The government agency, Consumer Financial Protection Agency created by the Dodds-FrankAct after the bank failures in 2006, was hauled into court accused of exerting too much authority by exposing Wells Fargo after the journalist watchdog published a story about the scam.

There’s an irony for you. When regulators catch a big financial company defrauding customers, it becomes the whistleblowers that are blamed. Do you suspect that government regulators and Congressmen “follow the money” so freely tossed around by lobbyists?