JPMorgan Chase Agrees To Pay $264 Million In Chinese Bribery Scheme
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JPMorgan Chase today agreed to pay $264 million to settle charges that bank employees in Hong Kong ran a scheme to bribe Chinese officials. U.S. officials say the bank hired friends and relatives of Chinese government leaders in exchange for investment banking business. NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: The case was brought by the Justice Department, the Securities and Exchange Commission and the Federal Reserve, and it involves what JPMorgan employees in Hong Kong called the Sons and Daughters Program. The bank would give jobs and internships to people with ties to government leaders. Mike Koehler is a professor at Southern Illinois University Law School.
MIKE KOEHLER: According to the government, some of these individuals were not qualified for the positions they were placed into. And some of these individuals did not follow JP Morgan's normal hiring process.
ZARROLI: In one case, the daughter of a Chinese official was given a job despite what a bank employee called undeniable under-performance. Another Chinese offspring was said to have an attitude issue. He refused to attend compulsory meetings. Still another was dismissed as little more than a photocopier. But in each case, the person was accepted into the bank's prestigious training program. In exchange, U.S. officials say JP Morgan attracted a lot of business. U.S. officials say this constituted bribery of a foreign official, something barred under the U.S. Foreign Corrupt Practices Act.
Mike Koehler, who's an expert on the law, sees that as kind of an overreach. Koehler says much the same thing happens in the United States. The children of powerful people get hired to top jobs all the time. And yet, he says, that's not prosecuted as bribery.
KOEHLER: And I think there needs to be some consistency between how the U.S. government forces bribery and corruption laws overseas compared to how the U.S. government enforces bribery and corruption laws when it relates to U.S. officials.
ZARROLI: But U.S. officials are known to be investigating other large U.S. banks for committing the same kind of quid pro quo with foreign governments. As for JPMorgan, it has not been charged with any violation. Instead, it's agreed to pay the fine in order to bring the investigation to a close. A spokesman today acknowledged that the conduct was unacceptable. He said the bank stopped the program in 2013 and took action against the individuals involved. Jim Zarroli, NPR News, New York.
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