JP Morgan Chase Smoked Out in Delaware, Lies About Glass- Steagall and Bail-outs, Stone Silent on Bail-in
June 21, 2013 • 8:45AM

A dramatic confrontation occurred yesterday at the Delaware State Senate, in the nation-wide battle for Glass-Steagall, as the mega-bankers' lobby emerged from the shadows.

The weekly meeting of the State Senate Banking Committee had listed three bills for discussion, the last of which was State Senate Resolution No. 8, in support of HR 129 to restore Glass-Steagall. The chairman announced at the beginning that this was not an official session, because they lacked a quorum (only 2 of the 7 members were there, the others being tied up with other committees), but they would take testimony on the bills.

Delaware State Capitol, Legislative Hall.

The testimony on the first two bills was heard, and those interested in them left the room, leaving 6 or 7 men at the back of the room. Meanwhile, the chief sponsor of the pro-Glass-Steagall bill, Sen. Bruce Ennis, came in from another meeting.

Sen. Ennis briefly introduced his resolution, saying that Glass-Steagall had worked for 66 years, but was repealed by Congress in 1999 under pressure from the big banks, which wanted to make riskier investments. "We all know what happened next," he said, describing the crash, the bail-outs since 2008, and the new plans for bail-ins, from Cyprus to America. Millions have lost their jobs, factories have been closed. He cited the support from national unions and experts, and prominent Delaware local officials for restoring Glass-Steagall. A local citizen-activist then spoke briefly in support of the urgency of passing the resolution, saying she had been active on this issue for years.

Then the fireworks started.

A representative of the Mid-Atlantic Financial Services Association told the Senators that it would be unwise to pass this resolution, and they should table it for extensive further discussion of the many factors leading to the crisis of 2008. He cited the large role of financial services in Delaware's economy.

Then the lobbyist for JP Morgan Chase came forward, to tell the Senators "it would be VERY INADVISABLE for Delaware, of all states, to pass this resolution at this time." He said that JP Morgan Chase has created 26,000 jobs in Delaware, and contributed greatly to the state's economy. Then came the first whopper:

"Similar resolutions have been introduced in 17 states, but only passed in three," he said. Clearly, since JP Morgan Chase is closely following the pro-Glass-Steagall resolutions, they know the true figure is 22 states, and passed so far in 4.

As soon as he was done, the citizen-activist spoke up: "I strongly resent the banks using this tactic of intimidation. You sound threatening to me." The JP Morgan man shot back, "We banks in Delaware don't threaten anyone. We try to work with everyone."

Sen. Ennis then responded, "The banks in Delaware don't threaten. It's the ones elsewhere that do, that we have to rein in with Glass-Steagall." He then said, "This isn't me, this is the GAO, a government agency, that says the banks were bailed out for $16 trillion — others say it was more." The Morgan man jumped in with his next whopper: "That was the TARP. That was all repaid with interest. It was one of the best investments the U.S. ever made."

Sen. Ennis replied, "The millions of factory workers who lost their jobs and the millions of homeowners who lost their homes, were never bailed out." He then went through the huge amounts of deposits seized in Cyprus from grocery stores, colleges, churches, and so on.

When a Republican State Senator tried to claim that Glass-Steagall would never be restored, and wouldn't work, Sen. Ennis replied, "No matter what happens with this resolution, if there is a bail-in in Delaware, remember: On June 19, Sen. Ennis warned you!"

NOT ONE of the half-dozen bank lobbyists (whom observers said looked like a group of vultures) said one word to refute him, on the plans of their banks for bail-ins!

Note: the bill is co-sponsored by 10 of the 21 State Senators. The 6 Democrat sponsors include the current Majority Whip and former Majority Leader.