The DOJ’s Incestuous Relationship with Jamie Dimon Is Captured in a Graphic from an Historic Lawsuit

[Gunnar Larson]

First Republic changed my life.

Gunnar

--

https://wallstreetonparade.com/2024/01/the-dojs-incestuous-relationship-with-jamie-dimon-is-captured-in-a-graphic-from-an-historic-lawsuit/


By Pam Martens and Russ Martens: January 18, 2024 ~

On February 10, 2014, the non-profit watchdog, Better Markets, took a bold
and historic action. It filed a federal lawsuit against the highest law
enforcement agency and officer in the United States – the U.S. Department
of Justice and the man who sat at its helm, Attorney General Eric Holder.

The lawsuit challenged a $13 billion out-of-court settlement that had been
agreed to by the Justice Department and the Wall Street mega bank, JPMorgan
Chase, over its sale of toxic mortgages. Better Markets wrote on its
website that this was at the time “The largest settlement in U.S. history
from a single entity by more than 300%” and that it “granted JP Morgan
blanket civil immunity for years of alleged, but undisclosed, pervasive,
egregious and knowing fraudulent and illegal conduct that contributed to
the 2008 financial crash and the worst economy since the Great Depression.”

Among the many eyebrow-raising allegations in the Better Markets’ press
release, these three stood out:

“The Attorney General and other senior DOJ political appointees negotiated
directly and entirely in secret with the CEO of JP Morgan Chase [Jamie
Dimon], someone who was considered a possible Treasury Secretary just a few
years ago.

“The cellphone of DOJ’s third highest ranking official rang with the
‘familiar’ phone number of JP Morgan Chase’s CEO [Jamie Dimon], who called
to offer billions of dollars to stop DOJ from holding a press conference
and filing a lawsuit in just a few hours. The call worked, and the press
conference and lawsuit were both called off.

“DOJ gave complete civil immunity to JP Morgan Chase for defrauding
thousands in exchange for $13 billion, via a contract that was negotiated
and finalized in secret without any review or approval by a federal court.”

Attorneys for the Justice Department asked the federal court to dismiss the
Better Markets lawsuit on the basis that Better Markets lacked standing to
file the lawsuit. The U.S. District Court for the District of Columbia did
just that in a longwinded decision that effectively stripped Americans of
their ability to fight back against the increasingly corrupt nexus between
Washington and Wall Street.

We reached out this week to Better Markets’ President and CEO, Dennis
Kelleher, to explain how federal courts can get away with this type of
cronyism. He responded as follows:

“Unfortunately, the U.S. legal system is an unlevel playing field tilted in
favor of Wall Street’s banks/Corporate America and against Main Street
Americans/the public interest. That’s because judges require anyone
bringing a lawsuit to show ‘standing’ to file a case, which almost always
depends on a plaintiff showing quantifiable, concrete, and specific if not
unique harm. Because banks/Corporate America can always show or make up
some dollar amount of injury from a government action or rule, they
virtually always have standing to sue. But Main Street Americans/the public
interest almost always cannot because public harm usually is not
quantifiable, concrete, specific or unique to a particular plaintiff.

“For example, even if it was objectively true that the DOJ/Eric Holder sold
out to JPMorganChase/Jamie Dimon, Better Markets’ case would have been
thrown out because the harm from that sell out would be to everyone in the
country and not a quantifiable, concrete, specific, or unique harm to
Better Markets. The same is true if an agency like the CFTC or SEC
knowingly enacted a rule that unlawfully favored the financial industry.
Public interest groups or just ordinary citizens would likely get thrown
out of court if they sued unless there was some unique harm inflicted. Put
differently, while there are some exceptions, as long as the harm is to the
broad public interest you basically cannot sue to protect the public
interest.”

If this sounds like the Kafkaesque court logic of a vast wealth transfer
conspiracy, you’re thinking along the right lines.

Better Markets' Graphic from Press Conference on February 10, 2014
Announcing Lawsuit Against the DOJ
Better Markets’ Graphic from Press Conference Announcing Lawsuit Against
the DOJ

Take a closer look at the graphic that Better Markets presented at its
press conference announcing the lawsuit. What it effectively shows is a
money laundering operation where a recidivist bank pays $13 billion to a
federal agency in the executive branch of government; bypasses the judicial
branch of government; and walks away with immunity and no questions asked.
If that feels more like a banana republic form of justice than that of a
thriving democracy, welcome to the new world of kleptocracy in America.

Nine months after Better Markets had filed its lawsuit, its worst
suspicions about the secret backroom deal materialized in the pages of
Rolling Stone under the byline of Matt Taibbi. The Justice Department had
silenced the perfect eyewitness, Alayne Fleischmann, a former attorney at
JPMorgan Chase who had reported the wrongdoing to her superiors. What
Fleischmann described to Taibbi was “massive criminal securities fraud”
within the bank. Taibbi describes what happened to Fleishmann as follows:

“Six years after the crisis that cratered the global economy, it’s not
exactly news that the country’s biggest banks stole on a grand scale.
That’s why the more important part of Fleischmann’s story is in the pains
Chase and the Justice Department took to silence her.”

The Justice Department announced its $13 billion civil settlement with
JPMorgan Chase on November 19, 2013. At the time, it clearly knew that it
would be bringing stunning criminal charges against the same bank just 49
days later.

On January 7, 2014, the Justice Department shocked the country with the
announcement that the largest federally-insured bank in the U.S., JPMorgan
Chase, had played a key role in the largest Ponzi scheme in history – that
of Bernie Madoff. And because the bank hid its suspicions from U.S. law
enforcement that a Ponzi scheme was occurring and failed to file the
legally-mandated Suspicious Activity Reports, the Justice Department
charged the bank with two criminal felony counts.

But instead of prosecuting the case in a federal court, where the
disgusting details would play out in newspaper headlines for months, the
Justice Department allowed the bank to admit to the charges and walk away
with a hefty fine and a two-year deferred prosecution agreement; meaning
that if the bank did not violate its two-year probation, it would never be
prosecuted for these crimes.

Since 2014, this kind of backroom deal between JPMorgan Chase and the
Justice Department has become enshrined as the new standard for crony
justice between Wall Street and Washington. JPMorgan Chase has racked up
five felony counts, received three deferred prosecution agreements and two
non-prosecution agreements. (See the highlights of its breathtaking rap
sheet here.)

And yet, there is zero indication that JPMorgan Chase’s appetite for crime
as a business model has been satisfied. The Attorney General of the U.S.
Virgin Islands last year brought credible evidence into federal court in
Manhattan that JPMorgan Chase “actively participated” in Jeffrey Epstein’s
sex trafficking of minors by ignoring a decade of his money laundering
inside the bank – the very money laundering conduct that resulted in the
bank admitting to two felony counts in 2014 in the Madoff case. In both
matters, the bank failed to file the legally mandated Suspicious Activity
Reports with the Financial Crimes Enforcement Network (FinCEN) despite
internal communications showing it was well aware that the financial
transactions were highly suspicious.

Despite the Justice Department and FBI sitting on reams of evidence in the
Jeffrey Epstein/JPMorgan case since 2008, the DOJ has brought no criminal
charges against the bank related to Epstein.

Notwithstanding this unprecedented crime wave at JPMorgan Chase, and the
ability of Jamie Dimon to not only remain at the helm of the biggest bank
in the U.S. but to become a billionaire from the stock options lavished on
him by his Board, federal regulators again proved themselves to be the
lapdogs that millions of Americans suspect them to be when they allowed
JPMorgan Chase to get $200 billion bigger last year.

George Washington University Law Professor, Art Wilmarth, author of Taming
the Megabanks: Why We Need a New Glass-Steagall Act, explained during the
Better Markets conference in September of last year exactly what transpired
in the spring of 2023 when regulators handed JPMorgan Chase the collapsed
bank, First Republic:

“…When First Republic failed, regulators did not invoke the systemic risk
exception. That was a clear and rather shocking error in my opinion. They
accepted JPMorgan’s bid to buy most of the assets and assume all of the
deposits of First Republic.

“By the way, JPMorgan recorded a profit of almost $3 billion on that
transaction. The Deposit Insurance Fund has recognized a loss of at least
$13 billion and it may be larger on that transaction. That’s a hard result
to justify and I don’t think the FDIC has attempted to justify it and I
don’t think they can…

“So what they did was to impose a loss of $13 billion on the Deposit
Insurance Fund, which must be reimbursed by all the banks, not just the big
ones, not even the banks larger than $5 billion – all the banks – meanwhile
handing JPMorgan a $3 billion profit; increasing JPMorgan’s size by more
than $200 billion and allowing JPMorgan to grow to a size of more than $4
trillion. By the way, also waiving any anti-trust review because First
Republic Bank was a failed bank, so there was no anti-trust review.”

If this is not the kind of “democracy” that you want to leave to your
children and grandchildren, pick up the phone today and call your U.S.
Senators’ office and demand the appointment of a Special Counsel to
investigate these backroom deals between the Justice Department and
JPMorgan Chase.
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