Four years ago, my daughter obtained a mortgage loan from what I will call The Stagecoach Bank, a bank that does a lot of business in the North Bay. In addition to her regular monthly payments, she made extra payments to further reduce the principal amount owing on the loan. But she noticed that The Stagecoach Bank wasn’t crediting the extra payments.
Thus began her year-long nightmare of trying to get The Stagecoach Bank to properly reflect the principal amount owing on her loan. Of course, she had to provide all of her payment records—repeatedly. She wanted to reach a person at the bank who had the authority to examine her paperwork, acknowledge the bank’s failure to keep track of her extra payments, adjust her balance and issue corrected statements. But she had trouble connecting at all with A Real Live Person, and, when she did, that Person always had an excuse to pass her on to someone else. She spent hours on the telephone and nearly wore out a fax machine. When she relayed this story to me, she said, “Dad, it looked to me as if the bank just wanted me to give up and go away.”
That rang a bell for me. The Stagecoach Bank is accused of surreptitiously setting up bank accounts and credit cards not requested by customers, going back to 2002. There were thousands of customer complaints. There were reportedly more than 700 whistleblower complaints. A 2004 report to the board of directors said that employees were gaming the bank’s new-business incentive plans to avoid losing their jobs. And yet no action was taken.
My question is: What if my daughter’s problem was just another aspect of the bank’s business plan? My daughter found that there was always an excuse for why the mistake, which happened repeatedly and which favored the Bank financially, wasn’t yet remedied. Was this intentional?
Speaking of excuses, have you been called for jury duty lately? I’ve gotten the summons about six times over the last 25 years and have observed a steady increase in the percentage of potential jurors who try to get out of serving. There are endless claims of hardship, inconvenience, lost wages, personal connections to cases, conflicting vacation plans, transportation issues, irritable bowel syndrome and dozens of other excuses. It takes almost as long to sort through the excuses as it does to seat a jury.
But really nothing beats the nuttiness that seems to accompany every major public works project, where excuses and a “fool-the-public” strategy just pile on one another. A BART janitor got paid more than $200,000 in overtime in one year, but investigative reporters discovered that he spends much of his time in a locked office. Will there be punishment? Dream on. According to the janitor, it’s homeless people who create so much work for him. According to BART it’s cheaper to pay overtime than to hire more janitors. Don’t you love the juxtaposition of those two excuses?
The Bay Bridge seismic retrofit project had an initial cost estimate of $250 million but came in at over $6.5 billion instead. Will anyone lose his or her job as a result? Of course not. There’s a long list of excuses that make the cost overruns no one’s fault, not even the Asian steel company whose poor welding and brittle anchor bolts made the news.
The SMART train is three years overdue and tens of millions of dollars over initial budget, even though the rail line completed to date is only 60 percent of what was promised to voters. Will anyone have his or her pension accrual docked as a result? Of course not. There are excuses for every cost overrun and delay. The one I’ve heard the most is, “It’s the [federal] government’s fault.”
The most honest comment on public works projects is attributed to a very high-profile Bay Area politician, who reportedly said, “In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”
There’s honesty for you. Consider the big holes created with projects like high-speed rail to Southern California and, in a neat parallel, the tunnel project that will carry more Northern California water to Southern California. There may be no way to predict how many hundreds of billions of dollars will be needed to fill those holes. Maybe The Stagecoach Bank could make us a loan.