JP Morgan Paid The Daughter Of The Chinese Prime Minister To Boost Business In The Country
In order to "promote its standing in China," JP Morgan paid a $75,000-a-month contract to a tiny consulting firm run by the daughter of former Chinese prime minister Wen Jiabao, the New York Times reports.
In August, federal investigators learned of JP Morgan's "sons of daughters" program and began investigating whether the bank violated antibribery laws by hiring the children of China's ruling elite. Now, David Barboza, Jessica Silver-Greenberg, and Ben Protess have unearthed this monster story. From the Times:
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.
JPMorgan appeared to benefit from the relationship as well. Fullmark claimed in a confidential letter to the bank that it “introduced and secured” business for JPMorgan from the state-run China Railway Group, a construction company that builds railways for the Chinese government. The bank was an underwriter in the company’s 2007 initial public offering, which raised about $5 billion.
It is not known whether Ms. Wen’s father, Wen Jiabao, played any role in that deal. But as prime minister, he would have had ultimate responsibility for state-owned companies and their regulators.
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