Allegations of JP Morgan’s use of clever tactics to bribe Chinese officials recently received mainstream attention when Salon journalist Alex Pareene mentioned it in a comical and classic interview on CNBC (you need to watch the video before reading this) with presstitute Maria Bartiromo. When Mr.Pareene mentioned these claims against the TBTF bank, CNBC mocked him for the fact that his information had come from the New York Times. Well it appears the paper has now given CNBC a taste of its own medicine; with some actual real reporting, something the clownish financial-tv channel drowning in a zero ratings death spiral doesn’t seem all that interested in doing.
This article from the New York Times details how JP Morgan paid $75,000 a month to an obscure consulting firm called Fullmark Consultants, which had only two employees. The firm was run by a woman named Lily Chang, which in reality was the alias used by Wen Jiabao’s only daughter Wen Ruchun. Wen Jiabao was the Prime Minister of China at the time.
Unsurprisingly, many lucrative deals followed for the JP Morgan in China. How about we #AskJPM about that.
More from the NY Times:
To promote its standing in China, JPMorgan Chase turned to a seemingly obscure consulting firm run by a 32-year-old executive named Lily Chang.
Ms. Chang’s firm, which received a $75,000-a-month contract from JPMorgan, appeared to have only two employees. And on the surface, Ms. Chang lacked the influence and public name recognition needed to unlock business for the bank.
But what was known to JPMorgan executives in Hong Kong, and some executives at other major companies, was that “Lily Chang” was not her real name. It was an alias for Wen Ruchun, the only daughter of Wen Jiabao, who at the time was China’s prime minister, with oversight of the economy and its financial institutions.
JPMorgan’s link to Ms. Wen — which came during a time when the bank also invested in companies tied to the Wen family — has not been previously reported. Yet a review by The New York Times of confidential documents, Chinese public records and interviews with people briefed on the contract shows that the relationship pointed to a broader strategy for accumulating influence in China: Put the relatives of the nation’s ruling elite on the payroll.
Now, United States authorities are scrutinizing JPMorgan’s ties to Ms. Wen, whose alias was government approved, as part of a wider bribery investigation into whether the bank swapped contracts and jobs for business deals with state-owned Chinese companies, according to the documents and interviews. The bank, which is cooperating with the inquiries and conducting its own internal review, has not been accused of any wrongdoing.
Of course not, don’t be ridiculous!
For Ms. Wen’s consulting firm, Fullmark Consultants, the JPMorgan deal was lucrative. While many Hong Kong investment bankers were earning as much as $250,000 a year, JPMorgan paid Ms. Wen’s firm $900,000 annually from 2006 to 2008, records show, for a total of $1.8 million.
A spokesman for JPMorgan declined to comment. In a previous regulatory filing, the bank disclosed that authorities were examining “its business relationships with certain related clients in the Asia Pacific region and its engagement of consultants.”
The children of China’s ruling elite, according to experts, have occasionally used government-approved aliases to protect their privacy while studying or traveling abroad. Ms. Wen used her alias for both schooling and business. According to government records, Ms. Wen holds two national identity cards with matching birth dates, one issued in Beijing under the name Wen Ruchun and a second issued in the northeastern city of Dalian, as Chang Lily.
JPMorgan’s contract with Fullmark called for the consultant to “to promote the activities and standing” of the bank in China. According to Fullmark’s letter to JPMorgan, the consulting firm had three main tasks. One, it helped JPMorgan secure the underwriting job on the China Railway deal. It also advised JPMorgan about forming a joint venture with a Chinese securities firm and provided counsel on the “macroeconomics policy in mainland China.”
The letter, sent around the time of the financial crisis, struck an optimistic tone. “We hope JPMorgan Chase will grasp the opportunities and become to be the winner in the financial crisis,” it read.
Well we all know how that turned out…
Full article here.
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