Congressman Peter Welch of Vermont is introducing The Stop Deducting Damages Act (HR3445) which would halt the corporate habit of turning around and picking civil penalties levied against them right out of the taxpayers pockets. Since J.P. Morgan just reported a quarterly loss of 380 million, here it is looking for ways to claw back a few billion, by their logic, and they could definitely do that through tax deductions.
From Press Release, Cong. Peter Welch
The legislation Welch is introducing would also apply to any future settlements the DOJ negotiates with big banks over their behavior in the run-up to the 2008 financial crisis.
Some settlements are written specifically to avoid any tax write-offs. When the Justice Department settled a criminal case with BP over the gulf oil spill, it specifically forbade the oil company from deducting any of it in taxes. The upcoming JPMorgan settlement, however, is civil and not criminal and any portion of it that compensates investors or homeowners could likely be deducted as a business expense.
Welch, a liberal from Vermont, is also circulating a letter he plans on sending to JPMorgan CEO Jamie Dimon to "accept full responsibility for the full payment of any fine related to its conduct in this matter."
Full text of letter from Press Release, Cong. Peter Welch
Mr. James Dimon
Chairman, President and CEO
J.P. Morgan Chase & Co.
270 Park Avenue
New York, NY 10017
Dear Mr. Dimon,
Should a wrongdoer whose conduct caused harm to the taxpayer ask the taxpayer to help pay the fine for the wrong done?
We think not.
Yet news reports indicate that J.P. Morgan, in its negotiations with the Justice Department over a $13 billion fine related to its mortgage activities, is seeking to do just that – shift a significant portion of its penalty to the American taxpayer.
It was the taxpayer who initially funded the bailout of Wall Street. It was the taxpayer who continues to endure the consequences of the worst recession since the Great Depression. The taxpayer should not, therefore, be required to contribute a nickel towards the fines imposed for conduct that got America into this mess in the first place.
We strongly urge J.P. Morgan to accept full responsibility for the full payment of any fine related to its conduct in this matter.
Sincerely,
PETER WELCH
Member of Congress
LUIS GUTIERREZ
Member of Congress
As always, thank you, Congressman Welch!
