Billionaire media mogul and longtime Democrat Barry Diller condemned the Obama administration for targeting JPMorgan Chase on Tuesday.
Diller angrily wondered why the government would fleece a record $13 billion from a bank he believes handled itself “quite well.”
“Where is it actually going?” Diller asked at the DealBook Conference, referencing the rumored $13 billion in settlement money sought by the Department of Justice for JPMorgan’s trading in toxic bonds. “A relatively small portion of it goes to people who were actually harmed, but the vast majority of it goes to the government.”
“What is the point of taking money from shareholders and shipping it to the government for — what purpose?” he asked incredulously.
Diller is chairman and senior executive of InterActiveCorp, a massive media and Internet conglomerate worth nearly $4 billion. He is also a strong supporter of President Barack Obama and the Democratic Party, shelling out $72,500 to support them last year.
But he had little love for Obama on Tuesday, arguing that his administration likely went after the bank “because of [JPMorgan’s] own vulnerability — because [JPMorgan] probably can’t stand to fight it.”
At issue are the vast supply of bad mortgage-backed securities sold to investors by Washington Mutual and Bear Stearns in the years leading up to the 2008 financial crisis. JPMorgan acquired these banks after they went bankrupt, but only did so at the strong urging of the federal government.
“You certainly can’t be responsible for being induced to buy two banks in the “Great Problem Years,’” Diller said, “and be responsible for their practices during that period as if it was the fault of your governance.”
Once JPMorgan took over the new banks, Diller says it played by the rules. “What did they know, when did they know it, and what did they do about it?” he asked. “In every one of those cases — every one that is public — they did the correct thing.”
He also rejected the notion that Jamie Dimon, JPMorgan’s CEO, should have sought explicit legal protection from the federal government before purchasing the two banks. Diller says Dimon tried to get a guarantee against prosecution but “couldn’t get it.”
“They pressed him anyway,” he continued, “and he did the thing that, essentially, various people were ordered to do.”
Dimon is another lifelong Democrat who was once called Obama’s “favorite banker.” That relationship soured after the finance CEO repeatedly slammed the president’s handling of the economy.
The Daily Caller News Foundation previously reported that the record-breaking government lawsuit against JPMorgan may be political payback for Dimon’s critique of Obama administration policies. Banks like Goldman Sachs — which pursued similar or worse policies but stayed in the administration’s good graces — have so far been largely immune to federal prosecution.
Diller had nothing but praise for Dimon and his leadership. “I think Jamie is a superb CEO,” he said, “and I also think he’s an utterly honest and decent man.”
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