It’s heartening that the New York Times has published a detailed exposé exposing JPMorgan Chase’s culpability as one of Jeffrey Epstein’s enablers and showing the bank ultimately bears responsibility for some of the sex offender’s illicit activities. Regretfully, the Times seems short on editors who could have made the dense story more digestible. I wonder how many readers will wade through all the details, let alone make sense of them.
Although the subject was of great interest, I got lost in the weeds about three minutes in. I almost had to call Cousin Rob to rescue me.
Still, the headline was unequivocally damning, and it’s obvious that JPM CEO Jamie Dimon’s handlers were sweating the story big time. We know this because Joseph Evangelisti personally managed the spin. The Times blandly identified him as a “spokesman,” which doesn’t do justice. Evangelisti is JPM’s Big Kahuna flack — Managing Director and Head of Worldwide Corporate Communications and Media Relations. JPM has an army of flacks, and Evangelisti is best likened to their General MacArthur.
Evangelisti’s statement speaks volumes about Dimon’s leadership: he said the bank’s relationship with Epstein “was a mistake and in hindsight we regret it, but we did not help him commit his heinous crimes.” He added, “We would never have continued to do business with him if we believed he was engaged in an ongoing sex trafficking operation.” The bank pinned blame on Jes Staley, Dimon’s longtime confidant and one-time heir apparent. “We now know that trust was misplaced,” Evangelisti said.
Fall-guy spin
Sorry, I’m not buying the Staley fall-guy spin. Even if Staley had concealed Epstein’s JPM relationship so thoroughly that Dimon “never had an inkling” — and there’s plenty of evidence to the contrary — it speaks volumes that Evangelisti portrayed Dimon as a hapless victim.
Moreover, Staley said in a sworn deposition that he had talked about Epstein with Dimon. And the Times found other hints that Dimon might have been in the loop, including email traffic among JPM employees that said Epstein’s accounts might be closed “pending Dimon review.”
Staley has previously denied liability and claimed JPM was using him as “a public relations shield.”
Dimon last year took home $39 million in compensation and has amassed a net worth of $2.8 billion building America’s biggest bank. CEOs are paid for their judgment, and one of the most critical is choosing lieutenants whose integrity sets the corporate tone. As the saying goes, doo-doo runs downhill.
My late father understood this. He ran a boutique accounting firm in Toronto and once refused to take on a potentially lucrative client because the answers he received about some issues didn’t sit right. My father’s partners respected his instincts. The spurned businessman later turned out to be a fraud, and the accounting firm that did take him on spent years in litigation.
That’s why my father was senior partner: he knew when to walk away. Dimon, evidently, doesn’t.
Smoking Gun
The Times glossed over a crucial detail: in June 2023, after months of defiance, JPM suddenly caved and settled with Epstein’s victims.
Why? As Bloomberg’s Hannah Levitt reported in a much clearer story, Dimon had been deposed weeks earlier about his interactions with Mary Erdoes, JPMs “billionaire whisperer” and Epstein’s point person at the bank. Erdoes’ name appeared at least 59 times in Dimon’s deposition.
Levitt reported that lawyers for an Epstein victim asked the judge overseeing the case for permission to recall Dimon and Erdoes for fresh depositions, citing a critical document produced in discovery after the CEO’s testimony.
“Needless to say, the late-produced document is one of the most relevant and responsive documents produced to date, and JPMC strategically withheld it from Plaintiff until she could no longer make meaningful use of it in examining JPMC’s employees,” a lawyer for an Epstein victim wrote to the judge overseeing the case.
Safe bet: the victims’ lawyers found a smoking gun JPM wanted buried.
Dimon’s Micromanager Reputation
The Times noted that Dimon had a longstanding reputation as a micromanager. A telling example the publication didn’t cite was that Dimon reportedly pressured his deputies for a speedy acquisition of Frank, a student loan company then run by a founder in her late 20s named Charlie Javice.
Javice in April was convicted of three counts of fraud and one count of conspiracy to commit fraud for snookering JPM into believing it had some four million customers. The number was closer to 300,000.
A commonality of the JPM Epstein and Charlie Javice stories is that in both instances there were bank employees who raised red flags and sounded alarms. Tellingly, none of them are still with the bank. It appears that Dimon can’t retain his best and most trustworthy employees.
In the Epstein case, one unsung hero was Ann Borowiec, JPMorgan’s former CEO – Private Wealth Management & Global Marketing Head for Wealth Management. According to this report, Borowiec emailed Jes Staley, Dimon’s former senior deputy, with the subject line: “Epstein-please call me.” Borowiec’s message said she had “concerns on risk mgt with this client” and “we have a bad track record internally on risk … as you know.”
Borowiec left JPM in 2013, after having worked at the bank for more than two decades.
Another unsung hero was Catherine Keating, who according to this New York report didn’t want to retain Epstein as a client after his conviction. Keating, who holds a law degree from the University of Virginia, spent nearly two decades at JPMorgan Chase. She went on to become Global Head of BNY Wealth, a position she held for nearly seven years.
Sarah Youngwood, a more than 20-year JPM veteran who served as CFO of JPM’s consumer and community banking business, expressed concerns about the accuracy of Frank’s user data, it was revealed at trial. Youngwood left JPM to join UBS Group and is now CFO at NASDAQ.
Sindhu Subramaniam, who worked on JPM’s corporate development team, was also skeptical of Frank. In a Skype message to her boss, Subramaniam asked: “How do we verify (Javice’s) claims of access to 5M[illion] households,” because “absent tangible revenues—how will we even know.”
Litany of Wrongdoing
And then there’s the litany of JPM wrongdoing the Times didn’t connect to Dimon’s tenure.
The most notorious episode came in 2013, when JPM paid a record $13 billion to settle federal and state claims it misled investors with toxic mortgage securities. A year later, the bank admitted it failed to flag Bernard Madoff’s suspicious activity and handed over $1.7 billion in a deferred-prosecution deal. In 2020, JPM agreed to pay $920 million for years of market manipulation.
These are countless more examples and they underscore a troubling truth: under Dimon’s leadership, the nation’s largest bank has repeatedly crossed ethical and legal lines, treating fines as just another business expense while Dimon maintains his reputation as Wall Street’s elder banking statesman.
In another era, the Times’s exposé would have ended Dimon’s tenure and the careers of several deputies, at least one of whom is cited as a potential successor. Instead, JPM’s stock closed today virtually unchanged — proof Wall Street treated the revelations as a nothingburger.
Dimon’s survival isn’t despite his failures; it’s because of them. In today’s corporate America, the mark of a successful CEO isn’t ethical leadership. It’s the ability to write billion-dollar checks and keep the stock price rising.