The final terms of JPMorgan’s mortgage fraud settlement with the Department of Justice was announced yesterday. It is not all that it is cracked up to be, but that has not stopped reporters from touting the deal as a record settlement and the result of a tough negotiation. One particularly extreme example is the front page story in the New York Times today, which describes the supposed heroics of Tony West, the DOJ’s lead negotiator on the deal.
Tony West, according to the Times, is “a soft-spoken but imposing presence” who took an aggressive stance against JPMorgan in seeking a deal that hit its bottom line hard. In fact, the deal is not nearly as much of a hit to JPMorgan’s profits as the reporting suggests, as David Dayen writes at Salon. The large number included a previously-announced settlement with FHFA and a series of mortgage relief measures, such as requiring the bank to write new mortgages, that do not actually cut into the bank’s profits.
The lack of real accountability in the settlement is unsurprising in light of the fact that in negotiating with Tony West, JPMorgan was dealing with one of its own. As I reported last month, West counted Washington Mutual as a legal client in 2008 before joining the Obama administration. The bank collapsed in fall 2008 and was taken over by JPMorgan. WaMu’s mortgage practices are a major focus of the settlement.
West’s firm, Morrison & Foerster, represented WaMu in a lawsuit brought by the NAACP in 2007 alleging systemic discrimination in mortgage lending. It is unclear if West worked on that case; he is not listed in court filings.
The Times article provides plenty of background on West’s career, so there is really no excuse for not alerting readers to the basic fact that West had counted Washington Mutual as a client just prior to joining the Obama administration. But beyond that, some more reporting might be in order: what, exactly, was West doing for Washington Mutual when he worked at Morrison & Foerster?