Today’s piece is one of several I’ve posted on Jamie Dimon – CEO of JPMorgan Chase – indisputably one of the most effective and influential business leaders of our time. See, for example, these, including one in which I eat crow.
In the crow-post I admit that though as a rule leaders should linger no longer than about ten years, there are exceptions, of whom Dimon seemed one. For when measured by the usual yardstick, the stock price, JPM had been and continues to be a clear winner. The company’s shares have jumped by about 250% in the last five years – outpacing every one of its rivals.
Now though we know that Dimon is a mere mortal. He made a mistake that other leaders make, especially when they are extremely ambitious and exceptionally successful. They fly too close to the sun – and then pratfall on their pride.
Dimon did two things wrong. First, he always assumed he was right. Second, when it turned out he was not – that on his watch was a grievous lapse in judgment – he tried to cover it up. But he failed. It has become abundantly clear that Dimon was indirectly involved in one of the biggest scandals of the 21st century. The scandal that surrounds Jeffrey Epstein.
No need here to provide details. They’re easy to find, notably in this remarkable piece of investigative journalism.
The Times article has just been published. So it’s not clear if it will impact either Dimon’s short-term performance or his long-term reputation. Both seem unlikely. Still, what Dimon did is not a good look. He pretended not to see what he did not want to see. On his watch the bank continued , for many years, to milk to the max one of its most lucrative clients. This despite said client being fully engaged in activities that were unquestionably illegal and profoundly immoral.
Perhaps the piece in the Times is wrong. I did not witness what Epstein did nor what the bank did and did not do in response. But the apparently deeply reported story would have to be wrong in almost every detail to give Dimon a pass. To believe that during the bank’s 15-year relationship with Epstein Dimon had no idea whatsoever that Epstein was high on the list of JPM’s most questionable if not reprehensible clients.
Epstein’s checkered history within the bank and outside it was a closely guarded secret – but it was not that closely guarded. Red flags about Epstein were repeatedly raised inside the bank and several of Dimon’s top lieutenants knew or strongly suspected at least some of what was going on. So, to believe that Dimon was entirely ignorant of the bank’s long relationship with Epstein is to strain credulity.
Dimon resorted – and still does – to what social psychologists call “plausible deniability.” It’s when people high on an organizational ladder deny knowledge or responsibility for decisions made by those lower down. The higher ups get away with their denials because there is no hard evidence to the contrary – even when their protestations of ignorance are ridiculous.
Jamie Dimon is now as he was before – an exceptionally good leader. But he is imperfect. He had a connection with Jeffrey Epstein that, no matter Dimon’s denials, will never be fully believed or forgotten.