The discussion about the selection of Jamie Dimon as the Syracuse University commencement speaker needs to be carefully crafted as the stakes represented by the constituencies contesting the selection are high.

First, the selection to be the speaker is an honor. Should Dimon be honored? His actions and position in the financial community are extremely controversial and can hardly be characterized as deserving ‘honor.’

As the assistant to Sandy Weill, he is as responsible as Weill for the now widely acknowledged poor management of Citicorp across the Weill-Dimon years that clearly brought ruin to JPMorgan Chase & Co.’s principal competitor. At Citicorp, the ‘Weill-Dimon Bank’ continues to roll up large losses, while the ‘Reed Bank’ is the source of profit. 

JPMorgan has the largest derivatives exposure of any bank in the world, tagged in the press as on the order of $87 trillion. While the real ‘net’ exposure of JPMorgan is said by the bank to be much lower, it is still in the trillions. Dimon opposes creating regulation and transparency of derivatives. Until there is transparency, how can we be assured that JPMorgan’s current ‘profit’, largely derived from the availability of low-cost federal funds and its oligopoly-based market position, represents a solvent institution?

During 2009, the year of taxpayer subsidized profits of all large financial institutions in the United States, Dimon accepted a $17 million bonus, while also reaping a recovery in the value of his shareholding in JPMorgan well into the hundreds of millions of dollars. This bonus and the increase in value of shareholdings were courtesy of the taxpayer bailout of the U.S. banking industry. Dimon was not unique in his bonus abuse and increase in value of his shareholdings, but it is safe to say that had the government interventions under former Goldman Sachs Chairman, and then-Treasury Secretary, Henry Paulson been handled differently, perhaps those bonuses would not have been paid, and the increase in value of shareholdings would have accrued to the American people as opposed to culpable managements. This compensation and recovery of value of personal shareholdings cannot be reasonably defended.

JPMorgan is not unique. But along with other banks it has also failed to refinance at historical spreads, home loans and other credits of its personal and corporate clients to relieve the credit freeze and crisis arising from the derivatives casino meltdown in which nearly all these institutions, including JPMorgan, participated. Why hasn’t every mortgage held by the banks in the United States been ‘modified’ to a 5 percent or less rate by now?

Dimon is publicly identified as opposing nearly all the proposed regulation of the financial services industry, including the Volcker Rule. The Weill-Dimon support for repealing the Glass-Steagall Act is well known.

Is this man to be ‘honored?’ A better case is that he, as a leader and participant in the excesses of the prior decades, should have been forced from his office during the ‘bailout’ provided by American citizens, or should have, by now with his board, had the grace to resign.

Syracuse University students, their parents, faculty and staff should turn their backs on Dimon when he addresses the Class of 2010. Maybe a debate will be ignited that the managements and boards of these bad custodians of our financial institutions should all resign and allow new custodians to represent us. While it is clear Chancellor Nancy Cantor will not rescind her invitation, nor Dimon have the grace to withdraw, it would be far better to have the Class of 2010 addressed by graduates of the Class of 2009 than by Dimon. 

Concerned parent
Rigaman2@aol.com

Published on April 21, 2010 at 12:00 pm