Difference between revisions of "JP Morgan Chase and Co."

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== Iraq ==
 
== Iraq ==
  
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JP Morgan Chase is leading a consortium which will make billions as Iraq's economy slowly recovers from the war. The group was selected to run the new Trade Bank of Iraq,<ref>[http://www.cpa-iraq.org/bank/banking_pager.html Creating a sound and modern banking system], Coalition Provisional Authority website, undated, acc 18 May 2010</ref> which has raised billions in trade guarantees by mortgaging future oil production and will make huge profits from the deals.  
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JP Morgan Chase is leading a consortium which will make billions as Iraq's economy slowly recovers from the war. The group was selected to run the new Trade Bank of Iraq,<ref>Haitham Haddadin, [http://www.corpwatch.org/article.php?id=11155 Iraq: Trade Bank of Iraq Gets $2.4 bln Export Guarantees], Reuters, 24 Jan (year not given), acc 17 May 2010</ref><ref>[http://www.cpa-iraq.org/bank/banking_pager.html Creating a sound and modern banking system], Coalition Provisional Authority website, undated, acc 18 May 2010</ref> which has raised billions in trade guarantees by mortgaging future oil production and will make huge profits from the deals.  
  
 
Although the Occupation Authority and JP Morgan Chase are making it possible for Iraq to trade with the world and buy essentials such as food and oil refining equipment despite its poor credit, critics point out that the situation is more complicated, especially since the government of Iraq is not an independent body, but rather an agent of occupation which doesn't necessarily have the best interests of the Iraqi people in mind.
 
Although the Occupation Authority and JP Morgan Chase are making it possible for Iraq to trade with the world and buy essentials such as food and oil refining equipment despite its poor credit, critics point out that the situation is more complicated, especially since the government of Iraq is not an independent body, but rather an agent of occupation which doesn't necessarily have the best interests of the Iraqi people in mind.

Revision as of 09:46, 18 May 2010

JP Morgan Chase is one of the oldest financial services firms in the world. The company, headquartered in New York City, is one of the leaders in investment banking, financial services, asset and wealth management and private equity. With assets of $1.6 trillion, JPMorgan Chase is currently the third largest banking institution in the United States,[1] behind Bank of America and Citigroup. The hedge fund unit of JPMorgan Chase is the largest hedge fund in the United States with $34 billion in assets as of 2007.[2] Formed in 2000 when Chase Manhattan Corporation acquired J.P. Morgan & Co., the firm serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and governmental clients.

Historical controversies

Slave trade

JP Morgan Chase has faced a campaign of boycotts in the United States after refusing to settle a court claim relating to its involvement in the 19th-century slave trade. African American campaigners called on American students to boycott the bank's student loans business, which is worth $9 billion a year. JP Morgan Chase and its subsidiary, Bank One, are the country's biggest student loan providers. According to the Guardian:

JP Morgan Chase amassed enormous wealth off the backs of enslaved Africans. It owes us restitution, but refuses to pay. It has left us no choice,' Deadria Farmer-Paellman, the campaign's leader, said at a rally outside the firm's New York headquarters.
The slavery claim relates to Citizens' Bank and Canal Bank in Louisiana, both now part of JP Morgan Chase, which owned about 1,250 slaves and accepted approximately 13,000 more as collateral on loans to plantation owners between the 1830s and 1860s.[3]

South Africa

The company has been the subject of a lawsuit for providing financial assistance to the apartheid government of South Africa to expand its police and security apparatus, even after the United Nations had urged a boycott of the racist government in 1964 when it declared apartheid a crime against humanity. JP Morgan refuses to comment on the case, as it is still under investigation.[4]

Environmental concerns

Connection with illegal logging in Asia

A 2005 report by a group of US environmental groups named JP Morgan Chase and BlueLinx as major backers of illegal logging in Asia.[5][6] The claims came as Indonesia once again admitted it was unable to stop the trade.

The activist groups targeted BlueLinx bankers JP Morgan Chase as guilty of profiteering from illegal logging. The report said that the bank provided a loan of $165 million to bale the company out of debt trouble in 2004.[7]

Ilyse Hogue, director of the Global Finance Campaign at Rainforest Action Network, said, “JP Morgan Chase has built its financial empire by making investments of mass destruction like BlueLinx. JP Morgan Chase’s involvement in the illegal timber trade is not only a national scandal, but further proof that the company must put renewed effort into matching the environmental commitments of industry peers such as Citigroup and Bank of America.”[8]

Estimates suggest 70% of Indonesia’s original forest has been lost, and that an area the size of Switzerland is cut down every year with illegal logging believed to be responsible for the destruction of 10 million hectares (2.5 million acres).[9][10]

Iraq

JP Morgan Chase is leading a consortium which will make billions as Iraq's economy slowly recovers from the war. The group was selected to run the new Trade Bank of Iraq,[11][12] which has raised billions in trade guarantees by mortgaging future oil production and will make huge profits from the deals.

Although the Occupation Authority and JP Morgan Chase are making it possible for Iraq to trade with the world and buy essentials such as food and oil refining equipment despite its poor credit, critics point out that the situation is more complicated, especially since the government of Iraq is not an independent body, but rather an agent of occupation which doesn't necessarily have the best interests of the Iraqi people in mind.

Similar to the Iraqi reconstruction contracts that have favoured US companies with political ties, the export credits of the Trade Bank of Iraq favour companies from allied nations, regardless if the products are cheap or well-made.

It is the first time since the 1950s that foreign banks will have access to Iraq's financial system, whose main asset is the second largest oil reserves in the world.[13]

According to critics, the foreign ownership of Iraqi banks will make it practically impossible for locally owned banks to participate in the forging of a new economy.

There have been a number of conflicts of interests which have been highlighted. Firstly, JP Morgan Chase contributed $158,000 to the US Bush-Cheney administration before the war. And in an example of the revolving door phenomenon, former UK prime minister Tony Blair was appointed as a part-time senior adviser, on a salary expected to exceed $1m (£500,000) a year.[14]

Enron

The BBC reported that JP Morgan Chase was accused by the US financial watchdog, the Securities and Exchange Commission (SEC), of 'helping Enron cover up its financial weakness':

JP Morgan Chase "helped Enron mislead its investors by characterising what were essentially loan proceeds as cash from operating activities," the SEC said. SEC enforcement chief Stephen Cutler said firms violated federal laws if they knew "or had reason to know" that they were helping a company mislead its investors.[15]

People

Notes

  1. ↑ Federal Reserve System | Top 50 bank holding companies date=2007-03-31 accessdate = 2007-08-02
  2. ↑ Barr, Alistair J.P. Morgan is largest U.S. hedge-fund firm publisher = MarketWatch date=2007-03-05, accessdate = 2007-08-02
  3. ↑ Conal Walsh JP Morgan faces boycott over slave trade reparations The Observer, Sunday 11 December 2005, accessed 17 May 2010
  4. ↑ Corporation Watch Online, accessed 25 February 2008
  5. ↑ Rainforest Action Network, JP Morgan Chase and BlueLinx Linked to Illegal Logging of Endangered Forests, AScribe Law News Service, 24 Feb 2005, acc 17 May 2010
  6. ↑ James Rose, Report into illegal logging attacks JP Morgan, Ethical Corporation, 1 Mar 2005, acc 18 May 2010
  7. ↑ James Rose, Report into illegal logging attacks JP Morgan, Ethical Corporation, 1 Mar 2005, acc 18 May 2010
  8. ↑ James Rose, Report into illegal logging attacks JP Morgan, Ethical Corporation, 1 Mar 2005, acc 18 May 2010
  9. ↑ Ethical Corporation Online, accessed 25 February 2008
  10. ↑ James Rose, Report into illegal logging attacks JP Morgan, Ethical Corporation, 1 Mar 2005, acc 18 May 2010
  11. ↑ Haitham Haddadin, Iraq: Trade Bank of Iraq Gets $2.4 bln Export Guarantees, Reuters, 24 Jan (year not given), acc 17 May 2010
  12. ↑ Creating a sound and modern banking system, Coalition Provisional Authority website, undated, acc 18 May 2010
  13. ↑ Corporation Watch Online, accessed 25 February 2008
  14. ↑ Graeme Wearden, Blair joins JP Morgan as $1m-a-year adviser, The Guardian, 10 Jan 2008, accessed 17 May 2010
  15. ↑ US banks fined over Enron BBC News Online, Last Updated: Tuesday, 29 July, 2003, 04:49 GMT 05:49 UK , accessed 4 March 2008
  16. ↑ The Rt Hon David Laws, MP , Debretts.com, 16 May 2010.
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