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Oct
2013
31

Penn State Paid Each of Its Victims $2.3 Million. JP Morgan? $5.

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Penn State University this week announced a $59.7 million settlement with 26 people who were sexually abused by former football Coach Jerry Sandusky.  This means $2.3 million for each victim.  Bloomberg Businessweek quickly noted that this number is in line with a settlement made by the Archdiocese of Los Angeles who settled with four people who were sexually abused for a total of $10 million.  In both cases, people had their lives altered by an abuse of institutional power.  In both cases, those people have been as reasonably compensated for their grief as money can manage.

Another type of institutional power abuse was recently “settled,” too, but the people whose lives it altered are not being compensated on the same scale.  Not nearly. This abuse was carried out by JP Morgan.

The dichotomy was pointed out by political pundit Max Keiser on Twitter this week:

Clearly, these are different scenarios for different crimes.  Still, where is the outrage?  The $13 billion settlement may be the largest against a company in history, but it accounts for just five months of the financial titan’s operating income.  What is worse, the instability of the settlement may lead to it being lessened. In fact, JPMorgan’s other recent billion-dollar deal, the $5 billion it owes the Federal Housing Finance Agency has been made tax deductible!  

When Penn State wound up in trouble they made major changes they hoped would restore the reputation of their institution. Now, they are paying handomsely for their transgressions.  Nobody is confident that the same can be said of JPMorgan. Public outcry has already been drowned out by the 24-hour news cycle.  

Former Delaware Senator Ted Kaufman, who now chairs the Congressional Oversight Panel, once expressed the fears many of us have about America’s relationship to its untouchable banks:

“People know that if they rob a bank they will go to jail,” Kaufman declared in an early speech. “Bankers should know that if they rob people, they will go to jail too.”

In hearings, Kaufman provoked the FBI, SEC, and the Justice Department to be more aggressive with Wall Street to punish their misdeeds. He summarized the entirety of the problem:

“At the end of the day, this is a test of whether we have one justice system in this country or two. If we do not treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole $500 from a cash register, then how can we expect our citizens to have any faith in the rule of law?

“When you look at what we got, it ain’t very much.  I’m genuinely concerned there are a lot of guys walking around Wall Street, the bad apples, saying, ‘Hey, man, we got away with it. We’re going to do it again.'”

Accountability, where art thou?

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