Caricature of JPMorgan CEO Jamie Dimon.
By MICHAEL SMALLBERG
Amid a sweeping overhaul of Wall Street regulation, JPMorgan Chase, the banking powerhouse, has often deployed former government officials to represent it in Washington.
In a November discussion with Treasury officials, its team included a former assistant secretary of the Treasury, according to government records.
In at least four meetings or conference calls with Federal Reserve staff since December, its representatives included a former official of the Federal Reserve Bank of New York.
And in at least 36 contacts with federal regulators since August 2010, JPMorgan was represented by a former staff director of a Senate Banking subcommittee who is registered to lobby on the bank’s behalf.
Many of the meetings and phone calls focused on the biggest rewriting of Wall Street rules in decades—the implementation of the Dodd-Frank Act, which was adopted in response to the financial crisis of 2008 and has profound implications for banks, investors, and financial consumers.
JPMorgan Chief Executive Jamie Dimon’s recent appearances on Capitol Hill to explain a multi-billion dollar trading blunder at the bank have cast a spotlight on the firm’s political connections. News reports by American Banker and ProPublica have described a roster of former congressional aides who now work for JPMorgan, the nation’s largest banking firm, as well as extensive political contributions from JPMorgan employees and political action committees to members of Congress.
Federal records reviewed by the Project On Government Oversight (POGO) present other dimensions of JPMorgan’s Washington ties. They show that the bank has enlisted former regulators as well as former legislative aides, and they describe specific contacts between those government alumni and current federal regulators.
POGO reviewed disclosures that several federal agencies post about their contacts with outside parties, typically concerning regulations that the agencies are drafting. Information about the background of the former officials was drawn from federal lobbying registration forms, company press releases, news reports, online profiles such as LinkedIn pages, and other sources.
The former officials identified in the agency disclosures are not all registered lobbyists for JPMorgan. But whether or not former officials register or are required to register as lobbyists, they may still be able to play a significant role in the regulatory dialogue.
In some cases, JPMorgan’s government alumni have conferred with regulators as part of groups that included representatives from other firms. In other cases, they participated in discussions limited to regulators and JPMorgan representatives.
JPMorgan’s press office did not respond to requests for comment. Former federal officials who have represented the bank in discussions with the government either did not return calls or declined to discuss the subject.
But Dimon, testifying before a House committee Tuesday, discussed federal rulemaking and the role of lobbying. “Lobbying is a constitutional right, and we have the right to have our voice heard,” he said.
Some discussions are best held in private, he added.
“I have lost this argument publicly many times, but I’ll make it again: Regulation is not binary. It’s not left or right. It’s not Democrat or Republican. These are complex things that should be done the right way in, in my opinion, closed rooms. I don’t think you can make a lot of progress in an open hearing like this.”
JPMorgan's team included these seven former U.S. government officials and one former UK official:
Scott Albinson served as a managing director of examinations, supervision, and consumer protection in the Office of Thrift Supervision—a Treasury Department unit that oversaw the savings and loan industry until it was disbanded under Dodd-Frank. He left OTS in January 2007. A LinkedIn profile describes Albinson as a managing director at JPMorgan.
He has met with Treasury and Federal Reserve staff on behalf of JPMorgan to discuss capital and liquidity issues, according to agency records.
Gregory Baer served as Treasury assistant secretary for financial institutions. Before that, he served as a managing senior counsel at the Federal Reserve Board. He returned to the private sector in 2002, according to a law firm press release. A LinkedIn profile describes Baer as “General Counsel Corporate Law & Global Regulatory” at JPMorgan.
One of the issues he has handled is the Volcker Rule, which would restrict the bets that federally insured banks place in the financial markets.
Baer has discussed the Volcker Rule in meetings with staff from the Treasury Department, Securities and Exchange Commission (SEC), and Federal Reserve, according to government disclosures. He has also conferred with staff from the Federal Deposit Insurance Corporation (FDIC) to discuss the agency’s orderly liquidation authority and supervision of large banks, among other issues.
Adam Gilbert spent over ten years working at the Federal Reserve Bank of New York, according to an online profile, and also served on the Basel Committee on Banking Supervision, an international body that coordinates banking supervisory matters. He joined JPMorgan in 1997. The Stanford Finance Forum’s website describes Gilbert as “Head of Regulatory Policy in the Corporate Risk Management Group.”
He has participated in discussions with staff from the Federal Reserve, Treasury Department, and SEC regarding issues such as the oversight of derivatives trading and the use of credit ratings.
In December, Gilbert was one of several JPMorgan representatives who met with Federal Reserve staff “[a]t the invitation of the Federal Reserve” to discuss a stress test designed to evaluate how well firms could withstand a period of severe economic turmoil, according to a brief Federal Reserve description of the meeting. Topics discussed “included the implications to JP Morgan Chase & Co. of publication of the results,” the Federal Reserve synopsis said.
Valerie Rainford served as a senior vice president of real estate and general services at the Federal Reserve Bank of New York, according to a 2006 annual report. An online profile describes her as “Chief of Staff to the Head of Global Compliance” at JPMorgan.
In December 2010, she participated in a conference call with Federal Reserve staff to discuss Dodd-Frank provisions that are intended to encourage safer mortgage lending, according to government records.
Naomi Camper served as a staff director of a Senate Banking subcommittee and as an aide to Sen. Tim Johnson (D-SD), the current Chairman of the full committee, which held a hearing last week to examine JPMorgan’s multi-billion dollar trading loss. She was registered as an in-house lobbyist for the firm at least as early as 2005, according to federal lobbying records.
She has since participated in meetings with staff from the Treasury Department, Federal Reserve Board, and FDIC to discuss the implementation of Dodd-Frank, according to agency records. In October 2010, for instance, she accompanied Dimon and other JPMorgan executives to a meeting with then-FDIC Chairman Sheila Bair and other agency officials to discuss capital issues, consumer protection, and the FDIC’s expanded authority to dismantle large failing firms, among other issues.
Katherine Childress served as a staff director of a Senate Banking subcommittee and as a senior advisor for Senator Charles Schumer (D-NY), who is a member of the Banking committee. The full committee writes banking legislation and oversees various financial regulators, while the subcommittee oversees economic and monetary policies. She has been registered as an in-house lobbyist for JPMorgan since 2008.
POGO has identified 36 contacts made by Childress on behalf of JPMorgan to discuss Dodd-Frank regulations.
These include meetings or calls with staff from the Treasury Department, Federal Reserve, Commodity Futures Trading Commission (CFTC), and SEC to discuss issues ranging from the Volcker Rule to the regulation of swaps and derivatives.
When Childress met with the SEC to discuss Dodd-Frank rules that were intended to bring comprehensive oversight to the over-the-counter derivatives market, she was occasionally accompanied by Annette Nazareth, a former SEC Commissioner who left the Commission in 2008 and is now a partner at the law firm of Davis Polk & Wardwell.
Nazareth said, “If you review the public records of meetings with outside persons it will be clear that the overwhelming majority of meetings are with persons who have no prior government affiliations. The regulatory agencies neither favor nor discriminate against persons with previous government experience.”
Thomas Koonce served as a legislative director for Rep. Brad Miller (D-NC), a member of the House Financial Services Committee, which held a hearing Tuesday with Dimon and the heads of the major banking and financial regulatory agencies. He has been a registered in-house lobbyist for JPMorgan since 2010, according to lobbying records. A LinkedIn profile describes Koonce as vice president of federal government affairs.
He has conferred with staff from the Treasury Department, Federal Reserve, CFTC, and SEC to discuss issues ranging from interchange fees to the Volcker Rule, according to agency disclosures.
Sally Dewar served as a board member and managing director of risk at the UK’s Financial Services Authority (FSA). In 2010 she announced she would be leaving the organization. The following year, JPMorgan announced that Dewar would be joining the firm as a “senior member of its company-wide Risk team.”
In May 2012, she conferred with Federal Reserve staff to discuss issues related to financial market utilities, which “exist in many markets to support and facilitate the transfer, clearing or settlement of financial transactions.”
FDIC spokesman David Barr said the agency “routinely meets with outside groups that request meetings on a variety of regulatory and policy issues.” He added that “part of what we do as an insurer and a regulator is we have meetings with individuals.”
CFTC spokesman Steven Adamske said his agency is “not qualified to answer a subjective question about any meeting participant’s prior employment” and its potential influence on the rulemaking process.
Federal Reserve Board spokeswoman Barbara Hagenbaugh noted that government ethics laws spell out what former officials can and cannot do.
SEC spokesman John Nester said, “As you know from your private meeting with the SEC staff, we meet daily with a wide range of public and private individuals on a host of issues. One’s past employment doesn’t provide special access.”
Treasury spokesman Anthony Coley noted that Obama political appointees are subject to increased restrictions on their post-government lobbying activities.
In his congressional testimony Tuesday, Dimon said that JPMorgan has good reasons to participate in the policy debate. “We have as much a vested interest in having a safe and good financial system as anybody else, and we’ll do anything we can to be part of a process to make it healthy and safe,” he said.
Michael Smallberg is a POGO investigator.
Image by Flickr user DonkeyHotey.
Our only hope is these people are moral and ethical. However, the world seems to be leaning more and more to greedy pigs making the rules. The only way to slow this trend down is to make the penalties tougher for the criminal element that is moving into the policy making world. Until the pigs see that the penalties for their crimes outweigh the profit they will flurish.
Posted by: Rick | Jun 25, 2012 at 07:37 PM
Excellent work Michael!
By his own admission, JPMorgan CEO Jamie Dimon testified at a U.S. Senate Banking Committee hearing in June that the Dodd-Frank law has not solved problems facing Wall Street, but instead has created a confusing new regulatory system for banks. “What we set up is a system with more and more regulators. We don’t actually know who has jurisdiction over many of the issues we are dealing with anymore. I would prefer a simple, clean, strong regulatory system, with real intelligent design, but that's not what we did.”
When elites are held in check, typically by effective legal mechanisms, everyone else in society does much better and sustained economic growth becomes possible. But powerful people - kings, barons, industrialists, bankers - work long and hard to relax the constraints on their actions. And when they succeed, the effects are not just redistribution toward themselves but also an undermining of economic growth and often a tearing at the fabric of society.
Please sign the petition to the U.S. Senate Banking and House Financial Services Committee asking for improved oversight of federal banking and market regulators.
To read more about what we’re trying to do and to sign the petition, click here:
http://www.change.org/petitions/u-s-senate-banking-and-u-s-house-financial-services-committees-use-technology-to-provide-oversight-of-u-s-banking-and-market-regulators?share_id=HTpDoOQNJgpe=d2e
It'll just take a minute!
Posted by: Mark Rome | Jun 23, 2012 at 10:03 PM
Thank you for the information. Now what are we going to do about it?
From your research can you provide a simple list of names? I will also forward this link to Senator Sanders via Twitter. Please get in touch with him if you're not already.
I think he is the only person in both houses of the US Congress who is not bought, paid for and owned by these criminal banks. Jamie, as a stand alone criminal, has to go down. And he will be removed with public pressure.
Also, interesting to dig into: I sent a message to [email protected] regarding a story he wrote this week:
New York City Comptroller John Liu, whose office controls about 9 million Citigroup shares, has not been consulted, according to Matthew Sweeney, a spokesman. The comptroller’s office voted against Pandit’s compensation plan. Shannon Bell, a Citigroup spokeswoman, declined to say who had been contacted. O’Neill didn’t immediately respond to e-mailed requests for comment.
Hello Mr. Griffin:
Can you please provide more information about why NYC Comptroller's office controls 9 million Citigroup shares? Why does the City of New York own shares of a bank? What? We really need this question answered.
Thanks for the info.
______________________________________________________
Something is strange when it comes to the NYC comptroller *controlling* shares of Citybank. Bloomy could effectively "manage" his own gains through manipulation of stock owned by NYC.
Something wrong there. Would you agree?
Posted by: VICTORIA | Jun 23, 2012 at 10:35 AM
Try to imagine for a moment what it would be like if the republinos take the presidency, 60 seat majority in the senate and a majority in the house. No more social security, no more medicare, vouchers for about $100 a month to cover all your health needs including prescriptions, no more teachers, police, or firefighters, in the public sector. Plenty in the private sector if you can afford to pay them. No more minimum wage, if you want a job you will work for what they tell you you will work for. My very first job while I was in high school, I started at $.90 an hour (about 1960), that will be the new minimum wage of today. The military will be on steroids bombing Iran, Syria, Iraq, and Afghanistan, with boots on the ground in all four countries. The more you make the more you keep and the lower your federal income tax rate if they keep the IRS. They may eliminate the IRS and you must pay a federal sales tax of roughly 15% on everything you buy including food. No more welfare checks, no more unemployment checks, and no more food stamps. The only abortions performed will be in one of two places: In a private hospital with the best doctors and medical staff and equipment available for the rich with money as no object or in the back ally with a coat hanger performed by a stranger for free. This is just the tip of the iceberg, it will get worse as time goes on. The best jobs for the 99% will be limo driver, butler, maid, gardener, pool keeper, horse groomer, and auto mechanic.
Posted by: The Gizmo51 | Jun 23, 2012 at 10:08 AM