The way the big banks have been getting away with their crimes is truly a scandal, with the white House, the Justice Department, and other federal agencies responsible for monitoring them either unwilling or unable to do anything about it. This leaves Congress as the only possible entity that can do something and senator Carl Levin (D-Michigan) has been almost single-handedly trying to bring some accountability. As we saw in the 2013 Frontline investigation The Untouchables and in the 2010 Academy Award winning documentary Inside Job, he used his powers as chair of the senate’s Permanent Subcommittee on Investigations to drag out of the top executives in the big banks information about how they manipulated the housing market and investor’s money in ways that impoverished the country while enriching themselves.
Levin recently announced that he was not going to run for re-election in 2014 so that he would not have to spend time campaigning and fundraising and could instead focus his energies more fully on his duties as a senator. I wondered if he would now feel even freer to go after the banks more doggedly, like the way that Delaware senator Ted Kaufman did. Kaufman was appointed to the senate in January 2009 to fill the vacancy created by Joe Biden becoming vice president. He had no interest in running in November 2010 and as The Untouchables showed, became one of the most determined people to investigate and prosecute banks but was thwarted by Assistant Attorney General Lanny Breuer.
It looks like that might be the case with Levin too. Following a scathing report released on Thursday by his subcommittee about how JPMorgan Chase hid $6.2 billion in losses during the infamous ‘London Whale’ episode, yesterday Levin grilled top executives of the bank and government regulators on how that could have happened. It turns out that the bank at one point unilaterally decided to stop providing regulators with the daily reports that they are required to do so by law, and they got away with it.
If you want the full sordid story of the extent of this bank’s manipulation of money and the government, read Josh Rosner’s comprehensive report titled JP Morgan Chase: Completely Out of Control. As Matt Taibbi says, “It’s just unbelievable, what this company has gotten away with.” Should we be that surprised? After all, the head of JPMorgan Chase Jamie Dimon has been described as president Obama’s ‘favorite banker’.
The Guardian‘s Tom McCarthy had a live blog of the hearings and it made for engrossing reading as executives of the bank revealed how they manipulated the numbers and treated the regulators with contempt and how the regulators simply took it.
I hope that Levin and his committee manage to get enough damning information that will result in such a public outcry that the Justice Department will be forced to instigate actual criminal prosecutions that seek convictions and jail time for top bank executives, rather than puny fines levied on the banks that they can just laugh away as the cost of doing business.