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JPMorgan’s Connections to the House Finance Committee

As CEO Jamie Dimon testifies today, we lay out JPMorgan’s ties to the committee — and just who is investigating the bank’s big losses. 

JPMorgan Chase Chairman and CEO Jamie Dimon testifies before the House Financial Services Committee on Capitol Hill on June 19, 2012. (Chip Somodevilla/Getty Images)

JPMorgan Chase CEO Jamie Dimon is on Capitol Hill again today, this time to talk to the House Financial Services committee about the bank's recent multibillion-dollar trading loss. According to his prepared testimony, Dimon plans to deliver basically the same remarks he gave the Senate banking committee last week, apologizing but giving few details.

His Senate hearing was hardly a grilling; senators mostly praised him for his "emphasis on continuous quality improvement," in the words of Senator Jim DeMint, R-S.C.

As we charted last week, JPMorgan happens to have plenty of connections to the Senate committee. The House committee where Dimon is appearing today has its own ties to the bank. Congressmen and staff from the committee have gone to JPMorgan and its lobbying firms. Members have also gotten hefty campaign contributions from the bank's PACs and employees.

The House Connections

JPMorgan has two in-house lobbyists with connections to the House Financial Services committee.

There are also three former congressional staffers with committee ties at firms currently lobbying for JPMorgan:

  • Collins Lionel is a lobbyist at Jones, Walker et al., and a former staff member on the committee. JPMorgan hired the firm this year.
  • Nicholas Leibham, who works JPMorgan lobbying firm K&L Gates, was formerly an aide to Gary L. Ackerman, D-N.Y., another committee member.
  • Bart Gordon also works at K&L Gates. He's a former Democratic congressman from Tennessee who, back in the 1980s, sat on the committee.

Data compiled by the Center for Responsive Politics also shows how representatives on the committee have benefited from the generosity of JPMorgan's employees and PACs.

In the 2012 election cycle, JPMorgan's PACs and employees have so far given $168,000 to members of the committee. About 80 percent of that came from one of the bank's PACs.

  • JPMorgan's PAC and employees have been the second-largest contributors to committee chairman Spencer Bachus, R-Ala., since 1993, donating a total of $119,000 to the congressman's campaigns — $11,000 so far this election cycle. (These numbers don't include contributions to Super PACs or other outside groups.)
  • The committee's vice-chair, Jeb Hensarling, R-Texas, has received a relatively modest $50,000 from JPMorgan since 2003. Overall, commercial banks have been his largest campaign contributor.
  • Other big Republican career recipients include Steve Stivers of Ohio, who has only served since 2010 but has already received more than $70,000.
  • On the Democratic side, JPMorgan's PAC and employees have given ranking member Barney Frank, D-Mass., $84,500 since 1989, making them his 4th biggest donor overall.
  • JPMorgan is number one for Carolyn Maloney, D-N.Y., with more than $100,000 since 1993.

Despite the hearings, neither the House nor Senate is actually conducting investigatons of JPMorgan's losses. But the Department of Justice is, along with five of JPMorgan's regulators — the FDIC, SEC, CFTC, OCC and the Fed. Lest you find that load of government acronyms as bewildering as Dimon said he did, we've also laid out their various investigations, and in a few cases, their own JP Morgan connections.

The SEC

The Securities and Exchange Commission is looking into how JPMorgan disclosed risks to shareholders. SEC chairman Mary Schapiro outlined in testimony to the House today the various kinds of disclosure the SEC can target, without going into details on JPMorgan.

JPMorgan has two former SEC enforcement heads working for them now: the company's general counsel is Steven Cutler, who headed enforcement at the SEC from 2001 to 2005. They have also reportedly retained William McLucas from an outside law firm, another SEC enforcement director who spent two decades at the agency.

The CFTC

The Commodity Futures Trading Commission is flexing new muscles gained from the Dodd-Frank financial reform. According to the Wall Street Journal, they are subpoenaing internal bank emails to determine if JPMorgan officials made deceptive statements — something that could constitute fraud or manipulation of derivatives market. The CFTC has never brought charges under the new rules, which went into effect last year.

The OCC

The Office of the Comptroller of the Currency director's testimony for today echoes what he told the Senate earlier this month. The agency is looking at JPMorgan's risk-management strategy leading up to the losses, and reviewing the OCC's own oversight of the bank.

As ProPublica's Jesse Eisinger wrote recently, this is also something of a test for the OCC under its new commissioner Thomas Curry. The agency has had a reputation for favoring light regulation — including a watered-down version of the Volcker Rule, a Dodd-Frank ban on proprietary trading that some say would stop trades like the one that led to JP Morgan's loss when it goes into effect. Curry cautioned in his testimony for today that the OCC hadn't determined whether JP Morgan's trade would have been banned under Volcker.

The Fed

In his testimony, the legal counsel of the Federal Reserve said that the agency was still looking, but had not yet turned up any evidence of weak risk controls at JPMorgan.

Jamie Dimon sits on the board of the New York Federal Reserve — something that's prompted a proposed bill from Democratic senators that would ban officials of banks that can receive loans from the Fed from serving on any of its boards. JPMorgan and 17 other banks whose execs served on regional Fed boards got emergency loans from the Fed between 2007 and 2009. A government report found no evidence of conflict of interest from the arrangement, but did raise the concern of "reputational risks" from the appearance of one.

The FDIC

The Federal Deposit Insurance Commission chair testified that the FDIC has added extra staff and has "met daily" with JPMorgan employees to take a broader look at the company's risk management beyond the unit that made the losing trades, according to their prepared testimony.

A recent appointee to the board of the FDIC, Jeremiah Norton, is a former executive at JPMorgan Securities. Before that, he was an aide to Ed Royce, R-Calif., who sits on the House finance committee.

The DOJ

The DOJ isn't testifying this morning, but they have started an inquiry into what executives at JPMorgan knew when they initially dismissed the losses. It's not clear what kind of charges could come from that investigation.

Barry Schmittou

June 19, 2012, 1:46 p.m.

I have just filed a complaint with the Senate Judiciary and House Oversight Committees regarding the patterns of crimes committed by JP Morgan and many more corporations.

Please view the evidence posted at the website below and follow the instructions seen in Exhibit B regarding contacting legislators and requesting action. Please note I have indicated the DOJ and DOL Directors appointed by Republican and Democratic Presidents have failed to uphold the law :

http://www.obamasdeadlycrimes.blogspot.com

Gunther Steinberg PhD

June 19, 2012, 2:21 p.m.

If the Supreme Court requires any evidence that the legislative branch is and has not been independent of corporate donations this so called investigation is prima facie evidence. Congress seems to work overtime to disillusion the country and the voters that they are impotent in the face of the demands of campaign fund begging needs.
  On election day, it is the corporate kitty vs. the nations voters with little choice between two men who want the Presidency, and another time of having to make a choice between who will do the least damage.
Our continued decline seems assured.

Gunther Steinberg

June 19, 2012, 2:23 p.m.

If the Supreme Court requires any evidence that the legislative branch is and has not been independent of corporate donations, this so called investigation is prima facie evidence. Congress seems to work overtime to disillusion the country and the voters that they are impotent in the face of the demands of campaign fund begging needs.
  On election day, it is the corporate kitty vs. the nations voters with little choice between two men who want the Presidency, and another time of having to make a choice between who will do the least damage.
Our continued decline seems assured.

Who do you think gets invited to the big fund-raising events. Who/Whom do we think buys those muti-thousand dollar dinner tickets. If you think they will put his feet to the fire we would have a better chance believing in fairy tales. It will be all show with no real flame!  When the smoke clears on this, he will be hiring more former regulators and they will all be drinking out of the same wine bottle again! Same old - same old - same old !

Creation of credit is a sovereign right.

It should be in the Bill of Rights, right there alongside freedom to justice, religion, speech, etc. If only we had faith enough within ourselves and our fellow citizens to come together and claim that right.

In so far as my above opinion relates to this article:
The solution is private ownership of banks, versus corporate ownership. This can be done by forming banks in which ownership is controlled by the actual depositors. Only, private depositors must be allowed ownership. Corporations may be customers, but not owners, never mind what the Supreme Court says about them being human.

Next, all of this will be a waisted exercise unless our people’s banks have the right to “create credit”, the most powerful force on the planet.

With this “force ” harnessed by the people who actually give it “power” by their “faith”, can we once more make America, and the free world great again, in a positive way.

First off, education. Cost of education and the debt bondage that results is debilitating, and working against American industry, innovation, cultural and societal harmony.

Health, Housing are other essentials to a strong society, and yet America is slipping on all these indices compared to other developing countries. The direction in which America is heading is to have its own internal “ third world”.

In a corporatist world, this is a model that works, after all, the structures now replicate imperial throwns.  Is there any doubt that present day CEO’s come off as Kings of their own empires, except without borders.
A gated world with the wealthy locked down inside and the poor outside, with all the agencies of the State at the disposal of the King and his court. 

Is this model sustainable? What has history taught us about when the balance gets to out of kilter.

The occupy movement is a manifestation of many peoples frustration. They are beaten, because they have no credible solution or alternative to the present “system”, which is the “power to create credit”, being owned by private enterprise i.e. corporations. Yes, those “heartless”entities, now judged human.

I believe, the issue of ownership or control of the power to create credit, that was once on the agenda in the early 19th century, in the form of many royal commissions throughout commonwealth counties and including the United States, needs to be brought back on to the table and once more given wide debate by the general public.

I do not believe that credit should be socialised in the way that Maj. Douglas proposed, which was I think to complicated to implement, and would have been in the hands of politicians and beurucrats, which was I think the greater fear at the time, then to continue to let private hands deal with this powerful force.
I propose that by allowing the system to continue in the manner it has, but with the one vital difference, private individual human ownership of the bank system to create credit.

There is no way to be more “capitalistic” or “democratic”, then this.


Whilst the few powerful men of the West controlled, understood and wielded this great power during time of empire and industrial revolution, our times now require this power to be brought under control, from the present out of control funding of valueless credit creation as has been witnessed by WFC. The whole WFC was brought about by misdirected application of the incredible power to create credit, to serve unsustainable financial markets and those who feed of it, rather than invest in long term sustainable solutions to environmental and societal needs.

I recently wrote my US Senator, been in the Senate a Long Long time and a Republican, he also has $1.2 million in Annual Bribes.

I told him he and the others in Congress are Corrupt with us paying him $174,000 and he collects $1.2 million from Corporations, Banks, Wall Street, Drug Companies and Health Care Providers, over $28 million over his tenure and he has 49 pages of disclosed Stock (it is OK for Corporations to give Congressment “Stock Awards” and Insider Trading is hard to prove.

I told him that people are pissed off. I went on to tell him that for years he has called anyone who wants to make the lives of the average American better with Government Programs Socialists, that the Soviet Union, because they were Socialist, was not the reason they disbanded and started over. Not Socialism, but Corruption in their Financial System.

People in the USSR could not put their money in banks as when they tried to access their savings, the money was lost, in the Computer somewhere. So they stopped putting money in the banks.

We have the same situation in our country, with “Hyper Computer Trading of our 401K and IRA stock by the Point 1%” ripping us off, insider trading, bankers who are Corrupt and risking our money, and a Congress, including him, who does nothing except accepts Bribes from those entities.

I told him that if he and his other 535 buddies don’t get their act together and straighten out our Financial System, then maybe, just maybe, we are headed in the same direction as before the Soviet Union collapsed and started over 20 years ago.

We outnumber those Corrpupted individuals in Washington, and could, if we see they are not doing a thing for us except taking Bribes and feathering their nests, we might just want to “Start Over” like so many Countries have as a result of Corruption of their Government.

I have not heard back from him.

I recently wrote my US Senator, been in the Senate a Long Long time and a Republican, he also has $1.2 million in Annual Bribes.
I told him he and the others in Congress are Corrupt with us paying him $174,000 and he collects $1.2 million from Corporations, Banks, Wall Street, Drug Companies and Health Care Providers, over $28 million over his tenure and he has 49 pages of disclosed Stock (it is OK for Corporations to give Congressment “Stock Awards” and Insider Trading is hard to prove.
I told him that people are pissed off. I went on to tell him that for years he has called anyone who wants to make the lives of the average American better with Government Programs Socialists, that the Soviet Union, because they were Socialist, was not the reason they disbanded and started over. Not Socialism, but Corruption in their Financial System.
People in the USSR could not put their money in banks as when they tried to access their savings, the money was lost, in the Computer somewhere. So they stopped putting money in the banks.
We have the same situation in our country, with “Hyper Computer Trading of our 401K and IRA stock by the Point 1%” ripping us off, insider trading, bankers who are Corrupt and risking our money, and a Congress, including him, who does nothing except accepts Bribes from those entities.
I told him that if he and his other 535 buddies don’t get their act together and straighten out our Financial System, then maybe, just maybe, we are headed in the same direction as before the Soviet Union collapsed and started over 20 years ago.
We outnumber those Corrpupted individuals in Washington, and could, if we see they are not doing a thing for us except taking Bribes and feathering their nests, we might just want to “Start Over” like so many Countries have as a result of Corruption of their Government.
I have not heard back from him.

Mike, no offense, because I agree with you in more than a few respects, but I would reply to a letter like that, either.  Chances are, it was tossed by some lackey long before it made it to his desk.  Like animals, threatening politicians provokes them.  Show support (even if only for the office or the stress of the job) and offer a hand of help, and even the environmental extremists make their voices heard contrary to industrial bribes.

It’s like what the civil liberties people say about being confronted by cops.  You have full respect for them and the job, but no, you don’t consent to the search.  Same approach, here.  Pretend they’re trapped by the bribes, and you’re giving them the way out.

As a matter of fact (and Ian touches on a little of this idea), we’re in a society where a lot of institutions are running scared.  Dimon’s testimony, to my ear, sounds like someone who’s been told he has six months to live.  “I can’t defend anything I did, but I’ll probably do it again and don’t try to stop me,” basically.  The world’s governments are increasingly seeking protection from the People.  Manufacturing and service companies are killing their bottom lines by treating the customers like indentured servants.  Hollywood is charging more for cheaper gimmicks, then blaming their failings on “piracy.”

Similarly, many of these groups has been tipping their hands.  In 2008, the banks were open about how they were making money whether or not their customers did, and would be sitting pretty in an economic collapse.  Drug companies have been trying to stamp out importing drugs to Africa to save lives, because they’re “counterfeit.”  Obama talks about WikiLeaks like it kidnapped his children.

Every institution is circling the wagons.

Personally, I think technology has done (and will continue to do) such a good job at democritizing the world that those in power are terrified that they’re becoming obsolete.  And they are, and they’re refusing to evolve along with the economy.

That makes them dangerous, but it also means they’re probably not going to get their way.  And it means that, if we’re careful about how we approach them, we might get some good work out of these people without their plunging the world into darkness out of spite.

If anyone remembers what the R.I.C.O. Act was written for this not only would have never happened if there were a few arrests , and a few jailed.