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Senators summoned Jamie Dimon, the chairman and CEO of JP Morgan Chase, to answer questions about how and why the bank lost $2 billion, give or take $6 billion, in investment schemes that no one seems to understand.
Instead it became little more than a session at the batting cage for Dimon, who swatted away most of their softball lobs without saying much at all.
The Washington Post's Dana Milbank recapped some of the finer moments:
"Mr. Dimon," said Sen. Mike Johanns (R-Neb.), it "occurs to me that an enterprise as big and powerful as yours, you've got a lot of firepower and you're—you're just huge."
"You're obviously renowned, rightfully so, I think," contributed Sen. Bob Corker (R-Tenn.), "as being one of the most, you know, one of the best CEOs in the country."
Democrats, perhaps worried that Wall Street has been shifting its campaign largess to Mitt Romney and the Republicans, joined the sycophancy sweepstakes. Sen. Robert Menendez (N.J.) called JPMorgan Chase "one of the nation's finest," and Sen. Jon Tester (Mont.) told Dimon: "You guys know the industry better than anybody sitting up here."
Reading this reminded me of the time our aldermen tossed a few questions to city officials before they approved the parking meter privatization deal. Paul Volpe, the city's chief financial officer at the time, assured the aldermen that leasing the meter system for 75 years was a windfall. For hours it went like this:
11th Ward alderman James Balcer: Let me ask you this question—is there anywhere else we can get $1.17 billion?
Volpe: Not today.
Balcer: Not today. Nowhere else we can get a billion.
The rest, as they say, is history. Except in this case the history is ongoing, because a billion dollars turned out to be much less than the system was worth, and it wasn't actually a billion dollars, since the operation that owns the meters keeps sending the city bills for a few million here and there. And now New York City is moving toward its own meter sell-off.
Like elected officials everywhere, most of our esteemed politicians in Chicago live in fear of losing their seats. In practical terms this means they're wary of the mayor, since he has the power and money to take them out as he pleases. So when he says they need to auction off the street parking system, or restrict public protest laws to make it easier to host a NATO summit, or give away some of their financial oversight powers to a private board of mayoral appointees, they do it.
As the Dimon hearing showed, Congress operates pretty much the same way, except that the powers capable of taking out our senators and representatives are big-money donors. The senators may not have known what JP Morgan Chase actually does to make money, but they know that some of it flows their way.
Party identity and ideology have little relevance—money is money, and banks like Dimon's have given it to anyone and everyone in office who might be helpful. JP Morgan has sent millions of dollars to the Democratic Party and its various heavy hitters, including Barack Obama and Rahm Emanuel. They’ve also funded the people fighting Obama and his agenda, including House Republican leaders John Boehner, Eric Cantor, and Paul Ryan, as well as right-wing presidential contenders Michele Bachmann and Rick Santorum.
Our state and city politicians have been no less open to the bank's generosity. In the last five years, its top donations in Illinois have gone to former Mayor Rich Daley, the state Democratic Party controlled by house speaker Michael Madigan, and the Illinois Republican Party. Progressive reformers like Cook County board president Toni Preckwinkle have taken their money. So have machine Democrats like Representative Joe Lyons and suburban conservatives like Senator Matt Murphy.
Last year, you may recall, JP Morgan Chase agreed to pay $228 million to settle a lawsuit accusing the bank of fixing bond deals and, as a result, fleecing taxpayers. This included bond issues from the CTA and City of Chicago, for whom the bank regularly does lucrative work that’s not competitively bid. From 2008 through the first half of 2011, the city paid the bank more than $23 million in bond fees.
Which brings me back to the Chicago City Council. In May aldermen unanimously signed off on Emanuel's decision to use JP Morgan to help sell $1.5 billion in bonds for Midway airport this fall.
Of course, this isn't about JP Morgan Chase in particular. It’s just another sign of how money buys attention—and begets more money—at every level of government.