JPMorgan chief Jamie Dimon is America’s top banker, but he also wants to be the country’s commander in chief, I am told by people close to him. After steering the nation’s largest bank impressively through ups and downs, making tons of money along the way, why doesn’t he just go for it?
Dimon won’t pull the trigger now and possibly ever because he knows being president requires running for president. Mike Bloomberg’s brief and unsuccessful experience in the 2020 race while getting dragged through the mud looms large in Dimon’s thinking, these people say.
Running a big multinational company can get messy, not to mention what comes out of the mouth of someone as voluble as Dimon.
Another thing likely factoring into his calculus is something that is currently roiling the bank. It involves the infamous financier Jeffrey Epstein, who even from his grave continues to haunt Wall Street and, now, JPMorgan. Dimon and his presidential ambitions could be collateral damage.
Between 1998 and 2013, convicted pedophile Epstein was a major client of JPMorgan. Today, he is best known for the sex trafficking of minors, but for years he was considered a Wall Street “whale” — someone who brought hundreds of millions of dollars in fees because of his own substantial wealth and because he was a private financial adviser to a coterie of billionaires like Leon Black of Apollo fame, and Les Wexner of L Brands.
How Epstein developed such a vast array of contacts and confidants remains largely a mystery. In 2019, he died in his prison cell, an apparent suicide after being arrested a second time for the sex trafficking of minors. In the weeks leading up to his death, I interviewed him about his career, his first conviction, and the looming charges that were much more serious.
“I just want you to know I’m not a pedophile . . . Maybe the only thing worse than being called a pedophile is being called a hedge fund manager,” he said with a slight laugh.
That’s right, Epstein wanted me to know he wasn’t a monster but also that scrounging for clients; charging “2-and-20” — the standard percentage-fee structure on hedge fund assets — was beneath him. He served the rich and the powerful as an adviser, buying their yachts and artwork, etc., and he made lots of money doing it.
Jeffrey’s justification
I then asked Epstein how he justified the crimes that landed him in jail. “So you didn’t really know the girls were underage?” I asked. Yes, he said, adding he was guilty of nothing more than being on the receiving end of “erotic massages.” The latest cases being assembled against him were false, he said. Plaintiff’s lawyers were looking to cash in on his notoriety and wealth.
Odd stuff to be sure, and yet these are the same excuses he used to remain a client of JPM for years.
JPM is now being sued by the government of the US Virgin Islands, where Epstein kept his private residence and allegedly victimized the girls. One accuser is also suing JPM. Both say JPM allegedly facilitated Epstein’s crimes by allowing him to transfer funds in and out of the bank.
The bank denies wrongdoing but, according to my sources, it expects to settle at least with the accuser because the details of its involvement with Epstein are so messy.
JPM began doing business with Epstein several years before and for several years after his 2008 conviction for soliciting sex from an underage girl.
Dimon became CEO of JPM in 2006, so it’s hard to believe Epstein was firmly on Dimon’s radar given everything else on his plate at that time. Still, at least one senior executive in wealth management I know raised concerns about Epstein around 2010, only to be swatted away by his supervisors.
For years, the firm investigated money transfers made by Epstein and filed Suspicious Activity Reports with bank regulators when they saw money bouncing from his JPM accounts to places overseas. Epstein was said to have various excuses for the money moves, like fueling his private jet.
JPM looked and found no evidence that the money was used in sex trafficking, JPM contends. People at the bank also said they kept him around in part because he was close to a powerful JPM exec, Jes Staley.
Staley was the bank’s head of private and investment banking, once considered an heir apparent to Dimon. Staley and Epstein were so tight that Staley stayed at Epstein’s Virgin Islands lair known as “pedophile island.” Once Staley left JPM in 2013, Epstein was gone as well, transferring his money to Deutsche Bank, where it remained almost until he died.
Staley has said he’s done nothing wrong (his attorney didn’t return an email for comment), and in recent testimony, he has said he wasn’t the only JPM honcho aware of Epstein’s lurid presence. Epstein’s business deals inside JPM were well known to the firm’s legal department, as well as top wealth management official, according to depositions taken in the JPM lawsuits. But Staley in one court document says he specifically discussed matters relating to Epstein with Dimon himself, according to a person with direct knowledge of the matter.
Dimon denies ever speaking to Staley about Epstein; people at the firm say they’ve scoured around 5 million emails and documents involving Epstein and have found nothing linking Dimon with discussions of Epstein. If Dimon had a conversation about Epstein with Staley, they say, it was only in passing. Dimon never met and barely knew who Epstein was until his 2019 arrest and apparent suicide, they add.
JPM is suing Staley for allegedly ignoring “obvious red flags” about Epstein. Staley’s attorneys have denied the accusation.
Yes, pretty messy stuff, all playing out in court as this column goes to press. It would also be playing out in a presidential campaign if Dimon chose to run.
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