House Hearing: Only Jamie Dimon’s Microphone Mysteriously Malfunctions During Pivotal Questioning
By Pam Martens and Russ Martens: May 28, 2021, ~
Wall Street on Parade
A Citizen Guide to Wall Street
CEOs from the six largest banks on Wall Street testified under oath yesterday before the House Financial Services Committee. But only one CEO, Jamie Dimon, had an ear-piercing electronic sound emanate from his microphone, which blocked out the sound of his voice when he was asked key questions by two separate members of Congress.
The situation was so bizarre that Congressman Juan Vargas, a Democrat from California, said this about the episodes: “It reminded me of the movie ‘Young Frankenstein.’ Every time they said ‘Luther’ the horses would get scared. Every time they said ‘Jamie Dimon,’ the computers would get scared.”
The first episode occurred after Congressman Al Green, a Democrat from Texas, told Dimon that two of the banks previously purchased by JPMorgan Chase had used slaves as loan collateral and at one point, after calling in a loan, the bank actually owned 1,250 slaves. Green asked Dimon: “Will you atone in the form of recompense,” and “what will you do for your banks owning human beings…?”
The shrieking electronic noise started at that point and the Chair of the Committee, Maxine Waters, had to ask her staff to get it under control.
Once the shrill electronic noise stopped, Dimon said he would meet with Green to discuss the matter.
Later in the hearing, Congressman Ed Perlmutter, a Democrat from California, said he had received complaints about JPMorgan Chase raising their credit card interest rates during the pandemic, despite record profits. When Perlmutter asked Dimon if, in fact, the bank had done this, the shrieking electronic noise started up again, making it impossible to hear any answer from Dimon. Perlmutter was never able to get an answer to the question from Dimon. But as soon as Perlmutter moved on to other matters, what appeared to be electronic scrambling of Dimon’s microphone stopped. You can watch the full video of the hearing here.
Jamie Dimon was sworn in and put under oath at yesterday’s House hearing, along with all other CEOs. The scrambling of just his microphone gave the appearance of a backup plan for difficult questions. Dimon previously got into trouble in 2012 for telling the public that his bank’s London Whale derivative trades were a “tempest in a teapot,” when the bank had, in reality, gambled in derivatives with deposits from its federally-insured bank, losing at least $6.2 billion.
If Dimon needed someone to scramble electronics at the hearing, he would certainly have no trouble finding capable hands. The bank has a history of hiring from among the ranks of the CIA’s clandestine operations.
JPMorgan Chase and Dimon have also been compared to the Gambino crime family in a deeply researched book by two trial lawyers, Helen Davis Chaitman and Lance Gotthoffer. The lawyers write that “…like the Gambino crime family, JPMC recognizes that getting caught is just the cost of doing business illegally.” The lawyers then proceed to list a jaw-dropping chronology of illegal acts by the bank.
There is also the bizarre fact that the Board of Directors of JPMorgan Chase has retained Jamie Dimon in the dual role of Chairman and CEO through an unprecedented crime wave that saw the bank admit to five felony charges brought by the criminal division of the U.S. Department of Justice since 2014.
On March 22, 2016, the Government Accountability Office (GAO) released a report that noted that the U.S. Justice Department had earlier assigned a $1.7 billion forfeiture against JPMorgan Chase “for its failure to detect and report the suspicious activities of Bernard Madoff,” the largest fraud ever perpetrated against the investing public. The GAO concluded that because the bank “failed to maintain an effective anti-money-laundering program and report suspicious transactions in 2008, it contributed to its own bank customers “losing about $5.4 billion in Bernard Madoff’s Ponzi scheme.”
The Justice Department’s investigative material included evidence gathered by Irving Picard, the trustee for the Madoff victims’ fund. That evidence showed that JPMorgan Chase had relied on unaudited financial statements and skipped the required steps of the bank due diligence to make $145 million in loans to Madoff’s business. Lawyers for Picard wrote that from November 2005 through January 18, 2006, JPMorgan Chase loaned $145 million to Madoff’s business at a time when the bank was on “notice of fraudulent activity” in Madoff’s business account and when, in fact, Madoff’s business was insolvent. The JPMorgan Chase loans were needed because Madoff’s business account, referred to as the 703 account, was “reaching dangerously low levels of liquidity, and the Ponzi scheme was at risk of collapsing,” according to Picard. JPMorgan, in fact, “provided liquidity to continue the Ponzi scheme,” the Picard investigators found.
In November 2013, Picard asked the U.S. Supreme Court to review an appellate court’s ruling that barred him from suing JPMorgan and other banks for aiding the Madoff fraud in order for Picard to recover additional funds for victims. In his Supreme Court petition, Picard stated that JPMorgan Chase stood “at the very center of Madoff’s fraud for over 20 years.” This assertion was based on Picard’s lower court filing that demonstrated that the bank was aware that Madoff was claiming to invest tens of billions of dollars in a strategy that involved buying large-cap stocks in the Standard and Poor’s 500 index while simultaneously hedging with options. But the Madoff firm’s business account at JPMorgan, which the bank had access to review for over 20 years, showed no evidence of payments for stock or options trading.
Picard’s petition to the Supreme Court noted:
“As JPM [JPMorgan] was well aware, billions of dollars flowed from customers into the 703 account, without being segregated in any fashion. Billions flowed out, some to customers and others to Madoff’s friends in suspicious and repetitive round-trip transactions. But in the 22 years that JPM maintained the 703 account, there was not a single check or wire to a clearing house, securities exchange, or anyone who might be connected with the purchase of securities. All the while, JPM knew that Madoff was using the account to run an investment advisory business with thousands of customers and billions under management and knew that Madoff was using its name to lend legitimacy to his enterprise…”
On October 28, 2008, JPMorgan Chase sent a “suspicious activity report” not to the U.S. government, the country providing federal insurance to its bank deposits and where its primary regulators were based, but to the United Kingdom’s Serious Organized Crime Agency (SOCA). The document stated:
[JPMorgan’s] “concerns around Madoff Securities are based (1) on the investment performance achieved by its funds which is so consistently and significantly ahead of its peers, year-on-year, even in the prevailing market conditions, as to appear too good to be true – meaning that it probably is; and (2) the lack of transparency around Madoff Securities’ trading techniques, the implementation of its investment strategy, and the identity of its OTC option counterparties; and (3) its unwillingness to provide helpful information. As a result, JPMCB has sent out redemption notices in respect of one fund, and is preparing similar notices for two more funds.”
In addition to paying the forfeiture of $1.7 billion to the Justice Department, JPMorgan Chase was charged by the agency with two criminal felony counts and given a deferred prosecution agreement. It said it would do much better in the future. But since that time, under Dimon’s leadership, the bank has racked up three more felony charges, admitting to all of them. See JPMorgan Chase Admits to Two New Felony Counts – Brings Total to Five Felony Counts in Six Years – All During Tenure of Jamie Dimon.
So this is where things stand today. Two trial lawyers, Helen Davis Chaitman and Lance Gotthoffer, have had the guts to write a book comparing the largest bank in the United States to the Gambino crime family and recommending that the Racketeer Influenced and Corrupt Organizations Act (RICO) be used to charge the bank. (In fact, in September 2019, for the first time that anyone on Wall Street can remember, the RICO statute was used to charge traders on JPMorgan Chase’s precious metals desk with running a multi-year racketeering conspiracy.) But twice this week, members of the Senate Banking Committee and the House Financial Services Committee have had Jamie Dimon present at hearings for hours, and not one Senator or House Rep could muster the courage to press Dimon on this unprecedented 5-felony count crime spree at the nation’s largest federally-insured bank.