If JPMorgan Chase & Co. CEO Jamie Dimon came to the House Financial Services Committee on Tuesday expecting the kind of kid-glove treatment he pleasantly suffered at the hands of the Senate Banking Committee last week, ranking member Barney Frank quickly disabused him of that notion.
The prickly Massachusetts Democrat repeatedly dismissed Dimon’s answers to his questions as disappointing, and at one point openly mocked the executive for ducking a question on funding for the Commodity Futures Trading Commission.
“I am surprised because it did seem to me you are well-informed about other aspects of what the federal government does or doesn’t do, and to talk about smart regulation,” Frank said before quickly pivoting to the “next question.”
Later in their exchange, Dimon seemed to be avoiding Frank’s question, provoking a testy exchange between the witness, Frank and Financial Services Chairman Spencer Bachus (R-Ala.).
“That’s not the question. Mr. Dimon, please don’t filibuster. Let me ask you now — I’m sorry, Mr. Chairman, I ask specific questions, Mr. Dimon well knows what we’re talking about,” an exasperated Frank said.
Later, Rep. Sean Duffy (R-Wis.) engaged in a tense discussion with Dimon in which he forced the executive to acknowledge that the company’s trading system is too large and complex for regulators to adequately examine every action — even as Dimon insisted his bank is not “too big to fail.”
As Duffy repeatedly pressed him on the issue, interrupting Dimon several times, Bachus again stepped in, quietly rebuking his colleague.
“Mr. Duffy, let — allow the [witness] to answer his question,” Bachus said.
Still, Duffy and his colleagues were able to force Dimon into difficult positions several times and perform their oversight duty at a much higher level than had been seen during the Senate panel’s crack at him.
“These hearings always favor a witness, no matter who the witness is. [The Members] only have five minutes and they switch between Democrats and Republicans, so there’s no consistent line of questioning,” said Dennis Kelleher, president of Better Markets.
As a result, “the witness can basically filibuster questions he doesn’t like” if they have any speaking skills at all. Kelleher noted, “One thing you can’t say [about Dimon] is that he’s not a polished speaker.”
Nevertheless, Kelleher, who spent years in the Senate Democratic leadership apparatus, said, “The House, and even some Republicans, asked some very tough, relevant questions. I think the Financial Service Committee acquitted itself very well.”
To be sure, it appeared at the outset that the House panel might be content to follow its Senate counterpart’s lead and give Dimon a pass from the harsh questioning that had been expected.
Rep. Don Manzullo (R-Ill.) lobbed a softball to Dimon early on, asking him whether JPMorgan’s woes were as bad for the economy as the problems facing Europe.
“I’m sorry I take up so many people’s time on this loss, because it is rather not significant in the global scheme of things, in the things that you all have to worry about as legislators and what we need to worry about in Europe,” Dimon responded.
Rep. David Scott (D-Ga.) praised Dimon’s and JPMorgan’s efforts to mitigate the foreclosure crisis in his state.
“I want to pay you and your operation in Georgia a great compliment” on the home foreclosure program that “saved over 1,075 homes, many of them yours,” Scott said. “We dodged a bullet because of your largeness, because of your size.”
Still, despite some of the fawning, Dimon did fare worse before the House panel than he did last week when Senators of both parties went out of their way to laud his experience.
Republicans then reiterated their dislike for the Dodd-Frank Wall Street reform law, enacted in 2010 largely without their assistance.
Tea party champion Sen. Jim DeMint (S.C.) shrugged off the failed London-based credit derivative bets, saying, “We lose twice that every day here in Washington.” And almost every lawmaker, regardless of party, seemed to lob more praise at Dimon than sharp criticism.
Perhaps coincidentally, Dimon has given $19,000 to Senate Banking Committee members in recent cycles. He also gave more than $55,000 to the Democratic Senatorial Campaign Committee in 2008 and $50,000 to President Barack Obama’s first inaugural committee, according to OpenSecrets.org.
Whether he will continue to be such a large donor remains to be seen. Kelleher argues that it’s time that JPMorgan be forced to demonstrate it is not too big to fail, or be restructured by federal officials.
“If Jamie Dimon doesn’t want some Old Testament justice and to see the JPMorgan name sent to the waste bin of history, it’s time for him to put up or shut up,” Kelleher said.