And Justice for All

Here is one thing I know. A news story is not going to have a happy end when one of the people is described with the words “unarmed black man.”

Yesterday on television I saw the New York protests in the wake of a grand jury’s decision not to indict anyone for the death of Eric Garner. A video by a bystander shows the plainclothes officer, Daniel Pantaleo, grabbing Garner around neck in a chokehold, which the department bans, throwing him to the ground and pushing his head into the pavement as a large group of officers pinned him down.

The New York Times editorial sums it up best: “The imbalance between Mr. Garner’s fate, on a Staten Island sidewalk in July, and his supposed infraction, selling loose cigarettes, is grotesque and outrageous. Though Mr. Garner’s death was officially ruled a homicide, it is not possible to pierce the secrecy of the grand jury, and thus to know why the jurors did not believe that criminal charges were appropriate.”

As I was watching, I found myself flashing back to another news story I had read earlier in the day. The headline of the Alternative Economics article was “JP Moragn Rushed to Hire Trader Who Suggested on His Resume That He Knew How to Game Electric Markets.

The man that Dunleavy wanted to be interviewed “ASAP” was John Howard Bartholomew, a young man who had just obtained his law degree from George Washington University two years prior. But it wasn’t his law degree that Bartholomew decided to feature at the very top of the resume he sent to JPMorgan; it was the fact that while working at Southern California Edison in Power Procurement, he had “identified a flaw in the market mechanism Bid Cost Recovery that is causing the CAISO [the California grid operator] to misallocate millions of dollars.” Bartholomew goes on to brag in his resume that he had “showed how units in reliability areas can increase profits by 400%.”

The internal emails at JPMorgan and Bartholomew’s resume are now marked as Exhibit 76 in a two-year investigation conducted by the U.S. Senate’s Permanent Subcommittee on Investigations into Wall Street’s vast ownership of physical commodities and rigging of commodity markets….

JPMorgan not only hired Bartholomew, according to the Senate’s findings, but within three months from the date of the email to Dunleavy, “Bartholomew began to develop manipulative bidding strategies focused on CAISO’s make-whole mechanism, called Bid Cost Recovery or BCR payments.” By early September, the strategy to game the system was put into play. By October, the JPMorgan unit was estimating that the strategy “could produce profits of between $1.5 and $2 billion through 2018.”

By rigging the markets, JP Morgan found a way to be paid three times for the same energy. The technical term for this, I believe, is theft.

If the penalty for selling loose cigarettes is death, what do you do to a guy who masterminded a plan to steal billions? It turns out, nothing. The bank was ultimately fined $410 million, which sounds like a lot until you realized that it made $18 billion in profits in 2013.

“To this day, none of the JPMorgan employees who engaged in the strategy have been charged by regulators or prosecutors.”


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