In testimony before the Senate Banking Committee JPMorgan Chase chief executive Jamie Dimon said he'd been wrong to minimize the company's failures as a "tempest in a teapot." NBC's Kelly O'Donnell reports.
JP Morgan Chase CEO Jamie Dimon will be back on Capitol Hill next week for a reprise of his performance Wednesday before the Senate Banking Committee.
When Dimon testifies before the House Financial Services Committee on Tuesday, he’ll get to spar with Rep. Barney Frank, D- Mass., co-author of the Dodd-Frank law, which is intended to rein in firms such as Dimon’s.
In his testimony Wednesday, Dimon criticized Dodd-Frank, saying, “I would prefer a simple, clean, strong regulatory system with real intelligent design, and that's not what we (meaning Congress) did.” Instead, he argued, by enacting Dodd-Frank, Congress “created a really complex, hard-to-figure-out-who's-responsible” system. “No one could adjudicate between all the various regulatory agencies.”
With more than $2.2 trillion in assets and more than 260,000 employees, JP Morgan is undeniably big and powerful, and perhaps, as Sen. Sherrod Brown, D- Ohio, said at Wednesday’s hearing “too big to manage and too big to regulate.”
But for such a conspicuous firm whose business is subject to regulation by an array of federal agencies from the Comptroller of the Currency to the Federal Reserve to the newly created Financial Stability Oversight Council, is it odd that Dimon and his colleagues are absent from the world of Super PACS?
Super PACs are committees that can collect unlimited amounts of money from individual donors, corporations and labor unions, money which can be used to run TV and radio ads praising or criticizing candidates. Activists in both parties have set up Super PACs and will fill the airwaves between now and Nov. 6 with their messages.
Sen. Bob Corker, R-Tenn., assesses Jamie Dimon's testimony before the Senate Banking Committee and dicusses whether more regulation of Wall Street firms is needed.
One might think Dimon and his fellow JP Morgan executives would have an interest in supporting Restore Our Future, the Super PAC backing Mitt Romney, who has pledged to “get rid of” Dodd-Frank and replace it with a law that’s “updated” and “goes after the bad guys,” but “also encourages the good guys.”
But so far FEC reports show no evidence of Dimon or other JP Morgan executives being big donors to Super PACs.
All the attention given to Super PACs in the 2012 campaign has somewhat obscured the fact that traditional PACs still remain influential.
The difference between a traditional PAC and a Super Pac is this: a Super PAC is not limited in how much money it collects and spends. It spends directly on TV ads or get-out-the vote efforts for or against a candidate. Super PAC money does not go into the coffers of a candidate’s campaign; it is used for ostensibly independent spending.
In contrast, a traditional PAC, such as the JP Morgan PAC, collects contributions, voluntary of course, from employees of the firm -- with each employee being limited to $5,000 per election cycle. The traditional PAC can contribute a maximum of $5,000 to a candidate per election.
So far in the 2012 cycle, JP Morgan PAC has given more than $340,000 to candidates.
According to the non-partisan Center for Responsive Politics in Washington, the JP Morgan PAC has donated to the campaigns of both Democrats and Republicans on the Senate Banking Committee.
In the super PAC era of one person giving $2 million or $10 million in one burst, the JP Morgan PAC donations to senators seem almost absurdly modest: $8,000 ($3,000 for the primary and $5,000 for the general election) to Senate Banking Committee member Sen. Jon Tester, D- Montana, for instance. Tester is in a tight re-election race this year against Republican Rep. Denny Rehberg.
In addition, in the current cycle Dimon himself has contributed to campaigns of Senate Banking Committee members Sen. Bob Corker, R- Tenn., and Sen. Mark Warner, D-Va.
Boeing, Goldman Sachs, and many other companies have traditional PACs, as do trade associations such as the National Beer Wholesalers Association and labor unions such as the International Brotherhood of Electrical Workers.
So far in the 2012 cycle traditional PACs have given more than $700 million to candidates.
Even in the Super PAC era, a traditional PAC has certain advantages: the money goes to the candidate’s campaign coffers and the candidate can use it for the campaign purposes he or she chooses. The strategy is in his hands, not in those of an independent group.
When one looks at the biggest donors to Restore Our Future, the pro-Romney super PAC, one sees several names from the hedge fund and investment fund universe, but none from the traditional Wall Street investment banks such as JP Morgan.
For example, Julian Robertson, founder of Tiger Management, a well-known hedge fund, gave Restore Our Future $1 million last year. "I want a great president of the United States. That's what I want. Nothing more specific than that,” he told CBS News. “I want a better nation here. I want my grandchildren to have a better place in which to live. In my opinion, this is one of the most important investments I've ever made."
There are some employees of the old-line Wall Street firms also giving to Restore Our Future: a few Goldman Sachs executives show up as having chipped in $95,000 or $50,000 – relatively middling sums in the Super PAC era.
Democratic Super PACs such as Priorities USA Action and the House Majority Fund are backed by the traditional Democratic donors from Hollywood such as Jeffrey Katzenberg who gave $2 million to Priorities USA Action and by labor unions, such as the Letter Carriers who gave $500,000 to House Majority PAC.
Meredith McGehee, the Policy Director at the Campaign Legal Center, a nonpartisan group which favors limits on and disclosure of contributions, said when a new channel opens for people to put money into campaigns, the venturesome types go first.
In an allusion to casino mogul Sheldon Adelson who the New York Times reported Thursday recently gave $10 million to Restore Our Future, McGehee said, “You find some people like the billionaires who are in a ‘I don’t give a damn’ mode: nobody is going to stop going to their casino. They really don’t care, they’re just going to spend their money because they can -- and they don’t have to worry about the public backlash.”
In contrast, she said, more “somewhat risk averse” publicly traded companies and their top executives are likely to shy away from Super PACs.
As for Dimon and his company, “Obviously given all the controversy about the financial services stuff, if he were out there spending tons of money on a Super PAC I would question the wisdom of the advice he was getting from his political strategists. That would be, in my view, not very bright politically.”
She added, “If you’re a corporate person and you’re concerned about public backlash, it’s going to be kind of stupid to go out give directly to a Super PAC. It’s so much easier to give to a 501c6 or 501c4 and be protected, be anonymous.”
Companies and executives can give to 501c4 and 501c6 groups who are not required to release the names of their donors.
Said Ali Lapp, executive director of the House Majority Fund, “It’s really the c4s that I think have an even more influential role (than Super PACs) in some of these races. If you look at the Republican spending in 2010 in House races – outside groups on behalf of Republicans – they spent $73 million, and $55 million of that was from eight groups alone. Of those eight groups, one was a Super PAC – American Crossroads – and it spent $2 or $3 million. All seven other groups -- $12 million spent by the U.S. Chamber, $11 million by the American Action Network and the rest were all c4s.”