A sign is seen inside the JP Morgan building on Park Avenue in New York. (AP Photo/Bebeto Matthews)
This story originally appeared at Truthdig. Robert Scheer is the author of The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street (Nation Books).
“I am not a crook,” Jamie Dimon might as well have been insisting in his five telephone calls these past two weeks with US Attorney General Eric Holder, asking that a criminal investigation of JPMorgan Chase be dropped as part of a plea deal on what has turned out to be a $13 billion fine on civil charges.
Nope, said Holder, who finally has found the backbone to stand up to the CEO of the nation’s biggest bank who was also once a strong supporter of the president for whom Holder works. Friday night, Dimon folded and accepted the record-breaking civil settlement while the rare criminal investigation into the allegedly fraudulent claims at the heart of the mortgage based banking securities that have wrecked the economy proceeds.
Although the $13 billion fine on the civil charges, which includes $4 billion in direct assistance to swindled homeowners, mostly in depressed inner city neighborhoods, is to be applauded, it represents about half of the profit JPMorgan garnered last year. The company’s stock price, which has increased by 23 percent since January despite a barrage of crises and fines, has not been damaged by the latest settlement.
But for the bank to admit that it committed a crime, as the Justice Department sought, was thought by Dimon to be far more threatening to JPMorgan’s legal position, and it was only Friday night that he agreed to go for the deal without the bank enjoying immunity on possible criminal charges.
The criminal case arose from an FBI-obtained email from a JPMorgan employee in Sacramento, California, who warned higher-ups at the bank that they were grossly exaggerating the value of the mortgage backed securities being marketed. That employee is now cooperating with the government and a trial on the matter will go to the heart of the origins of the economic crisis in which JPMorgan played a leading role.
Although JPMorgan and its CEO have attempted to dismiss the myriad financial market scandals confronting the bank as the consequence of its acquisition of Bear Stearns and Washington Mutual during the financial crisis, the Sacramento criminal case has nothing to do with those other banks.