Tag Archives: Justice Department

JP Morgan Chase Gaming on Big Settlement

Chase_Bank_Athens_OH_USALittle Rock  Ok, you remember that we were skeptical when news of the $13 billion record breaking settlement between JP Morgan Chase and the Justice Department was announced until the details became clearer.  I just wasn’t sure the leopard could change its spots by buying a new paint job no matter what the price.  Now, the settlement seems to be in danger of unraveling as the details become clearer and the chicanery of the Chase lawyers and accountants in trying to weasel out of really paying the penalty as opposed to having their public relations department put out press releases about direct negotiations between CEO Jamie Dimon and Attorney General Eric Holder.

            First, Chase jumped the gun on Justice and cut a separate deal with the Federal Housing Finance Agency (FHFA) for $5.1 billion which got Justice hopping because they are insisting that only $4 billion of their $13 billion resolves those claims.   It gets sketchy when it becomes clear that Chase was trying to fudge $1.1 billion of an earlier settlement where it agreed to repurchase bad loans it had bundled and sold to Fannie Mae and Freddie Mac back when they and others were getting away with everything before the housing bubble burst.  Essentially they wanted two dollars of credit on this deal for a dollar really paid.

Holder to his credit is reportedly balking at anything that would allow Chase to try to shift the cost of the settlement unto the FDIC, the federal deposit insurer, not wanting one federal settlement to be paid by another federal agency.  Meanwhile according to insiders talking to the Wall Street Journal, Chase would take all $5.1 billion of the FHFA settlement as a tax deduction, reducing the bite, and at its effective tax rate, clawing back a savings of $1.5 billion in taxes, essentially transferring part of the penalty to the US taxpayers for its own giddy, avarice and community destruction.   Oh, and of course, Chase thinks that there may be some other big chunks they can take as tax deductions as well and they are looking hard for them.  Now, these kinds of maneuvers sound more like the Chase we all know and rarely love.

Justice since the first news of a deal surfaced was quick to say that none of the settlement had to do with Chase’s purchase of Washington Mutual and other assets after the meltdown, partly as a response to an intemperate, whack editorial in the Journal that tired to argue that Dimon was actually Joan of Arc and was being punished now for having done the government a favor back when.  Justice the day after the editorial released some more information about the deal saying nada had to do with Chase’s acquisition of failing institutions.

I suspect that is all part of why this deal has now unraveled a bit.  It turns out that Chase is also trying to “cost out” another part of this settlement by disagreeing with the FDIC about responsibilities for some of Washington Mutual’s bad loans and bonds and seeing if they can tap an FDIC $4 billion reserve fund for what Chase is saying is $5 billion or more in liabilities they don’t want to own up to.   Talk about doing a hustle!

My bet is that they have gone too far and pushed Dimon out on the limb publicly as having reached out to Washington and virtually singlehandedly worked out a deal with Holder for them to be able to let this whole house of cards collapse, so a deal of some sort will come back together.  They may have just found that bargaining in bad faith doesn’t work with Holder.  He seems to know his cards well and be unwilling to fold them or kiss the Wall Street rings. 

Regardless when it comes to these bums, if he’s not our hero, he’s definitely about our only hope.


Voter Suppression as a Poll Tax

New Orleans  Finally as the campaigns begin to grip the likely closeness of the election, there is some pushback against the massive state-by-state efforts to suppress or drive down the likely voters, especially among lower and minority citizens.  Attorney General Eric Holder in triggering federal litigation in several states has correctly referred to such measures, especially the resistance to allow equity in voting in Texas, as equivalent to instituting a “poll tax.”  I have to wonder though whether this is too little and too late with the election only months away.

The poll tax argument has arisen in Texas, given the costs and inaccessibility of trying to obtain the newly mandated picture identifications before voting.  Distances are huge in Texas and many lack transportation.  A number of counties have spotty hours for offices where IDs could be obtained.  In South Carolina, Georgia, Texas and other states of the Old South, the Voting Rights Act barring racial discrimination bars such conduct and gives the Justice Department some handles in trying to suppress the vote, so we’ll have a cliffhanger running up to the election, as these efforts hopefully come to a cropper.

In what used to be known as fair minded, if not liberal, states, like Ohio and Pennsylvania, there is no such natural leverage so the pushback is harder to develop.  It was heart rending to read the story in the Times of a 90+ year old Pennsylvanian who had never had a driver’s license, gone through various names due to marriage and adoption, and had her social security card and other IDs stolen at a grocery store last year, who has now reacquired a birth certificate, but still likely lacks enough to be able to vote in Pennsylvania.  She is convinced that her problems are deliberately meant to strip votes away from Obama.  No, duh?  This has become too obvious.

Partially because Republicans who have been advancing this strategy, as we have frequently discussed, since 2008 can’t keep themselves from chortling, the transparency of the effort to disenfranchise voters has become crystal clear.  Quoting the Times:

The argument by the Pennsylvania law’s proponents that it has nothing to do with partisan politics took a blow late last month when Mike Turzai, the majority leader of the state’s House of Representatives, addressed a group of fellow state Republicans.  Listing the accomplishments of the Republican-controlled legislature, he said, ‘Voter ID – which is going to allow Governor Romney to win the state of Pennsylvania – done.

These are all real people with a real problem who are trying to access the voting booth but being denied.  Meanwhile the Republicans keep harping about voter registration “fraud,” and waving their ACORN “bloody shirt” despite the frequently established fantasy of it all.

Somehow  it is easy for both parties to join in chants of “let the people vote” when it comes to Egypt, Syria, Iran, and Russia, but here at home…silence reigns.  Democracy is for someone else.  Winning by any means necessary, fair or foul, is the current motto here.