by Fred Lucas
JPMorgan Chase & Co. wants to exclude shareholder resolutions from two conservative watchdog groups that relate to the bank’s closing of the account of a religious-freedom nonprofit founded by former Kansas Gov. Sam Brownback.
Brownback, a former U.S. ambassador-at-large for international religious freedom during the Trump administration, is also a Republican former member of the House and Senate from Kansas. He founded the National Committee for Religious Freedom.
In May 2022, three weeks after opening the account, JPMorgan Chase closed it. Brownback, along with other conservative organizations, raised the question of whether the move was done for religious or political reasons. JPMorgan has said it had nothing to do with political or religious views and said the decision was made because, under federal laws, it needed more information about donors and recipients than the nonprofit provided.
In December, the National Center for Public Policy Research submitted a shareholder proposal, following up on a similar proposal in November from the National Legal and Policy Center, calling for more transparency
JPMorgan is asking the Securities and Exchange Commission staff for permission to exclude consideration of the resolutions from its annual shareholder meeting on May 22. Generally, shareholders have the right to offer resolutions, but a publicly traded company can ask the SEC for permission to exclude a resolution under certain legal circumstances.
In two separate letters in January, Brian V. Breheny, a lawyer representing JPMorgan, requested that the SEC staff exclude shareholder proposals, submitted by the National Legal and Policy Center and the National Center for Public Policy Research, asking for more transparency regarding the bank’s decision to drop accounts, citing mainly its decision about the National Committee for Religious Freedom.
The two shareholder proposals are different in that one seeks information about possible government collusion, while the other is focused on finding information about bank policies for closing accounts.
The National Legal and Policy Center resolution asked that the bank publish information—albeit omitting private customer data—“that specifies the company’s policy in responding to requests to close … by any agency or entity operating under the authority of the executive branch of the United States Government.” The resolution goes on to say the company should provide the “name and title of the government official making the request; the nature and scope of the request; the date of the request; the outcome of the request; and a reason or rationale for the company’s response, or lack thereof.”
“They need to be transparent about the decisions they make to de-bank clients,” Paul Chesser, director of the Corporate Integrity Project at the National Legal and Policy Center, told The Daily Signal.
Chesser noted the new purported business ties that came to light between JPMorgan and Jeffrey Epstein, the financier who was facing federal sex-offender charges at the time of his death in a prison cell while awaiting trial.
“It’s a no-brainer comparison to make. Here is this fine, upstanding public servant, Sam Brownback, ambassador for religious freedom … on a whim, you shut down his account, compared to Jeffrey Epstein. … I can’t see a more glaring comparison to make there,” Chesser said.
A federal lawsuit brought by the government of the U.S. Virgin Islands says Epstein used his Chase accounts to pay more than $1 million to his reputed victims. Recently, unredacted portions of the lawsuit, as first reported by LawAndCrime.com, also say Chase’s global corporate security division as well as the bank’s risk-management division issued warnings about allegations against Epstein. But the bank did not drop the account.
The SEC staff decision could come at any time, said Scott Shepard, director of the Free Enterprise Project at the National Center for Public Policy Research.
“This seemed like a critical moment in time to ensure our resolutions are on the proxy,” Shepard told The Daily Signal. “Look at how despicable Jeffrey Epstein has been, and they choose to de-bank Sam Brownback.”
The January letter from the JPMorgan attorney contends the shareholder resolutions would require micromanagement of how the bank does business and interacts with clients.
“In this instance, the proposal focuses primarily on the company’s relationships with customers and, specifically, on the company’s decisions with regard to the handling of customer accounts, which are ordinary business matters,” says Breheny’s letter to the SEC asking for the exclusion of the National Legal and Policy Center proposal from the bank’s annual shareholder meeting.
The bank did not act in a discriminatory manner, a JPMorgan spokesperson said.
“I can tell you confidently we have never [closed], and would never close, an account due to one’s political or religious affiliation. Full stop,” the spokesperson said. “I can’t discuss confidential client relationship information publicly, but I can tell you that we communicated with the former client many months ago, in writing, and they are aware of why we closed the account.”
Brownback, the chairman of the National Committee for Religious Freedom, told The Daily Signal that the bank has shown unusual priorities in closing accounts.
“One would think Chase Bank would embrace the faith community in America and distance itself from convicted criminals and the Chinese Communist Party, but that doesn’t seem to be happening,” Brownback said in a written statement.
The organization’s account was closed last May 6. There was a call between the bank staff and the National Committee for Religious Freedom staff in June. But the matter was mostly dormant until September, after JPMorgan Chase CEO Jamie Dimon testified to the Senate Committee on Banking, Housing, and Urban Affairs about his reverence for the country’s “foundational beliefs in freedom of speech, freedom of religion, freedom of enterprise.”
That prompted Brownback, on Sept. 27, to write to Dimon.
“In your testimony, you referred to religious freedom as a ‘foundational belief,’ but Chase Bank recently decided to close the account of the National Committee for Religious Freedom, a nonpartisan, multi-faith nonprofit organization dedicated to defending the right of all Americans to freely live out their faith,” the former lawmaker’s letter said.
The letter goes on to note that “three weeks after opening our nonprofit business checking account, we received a letter notifying us that Chase had decided to ‘end their relationship’ with the National Committee for Religious Freedom and that our account would be closed. The bank actually closed our account before we received the letter.”
As a 501(c)(4) nonprofit organization, the National Committee for Religious Freedom can advocate for political candidates.
“What shocked and surprised me the most was when someone from Chase eventually reached out to our executive director and informed him that Chase would be willing to reconsider doing business with the NCRF if we would provide our donor list, a list of political candidates we intended to support, and a full explanation of the criteria by which we would endorse and support those candidates,” the Brownback letter continued.
“Does Chase ask every customer what politicians they support and why before deciding whether or not to accept them as a customer?”
Almost a month later, on Oct. 21, Chase Managing Director Larry Thode wrote back to Brownback to “apologize for your experience” and to explain the bank’s position.
“We don’t discontinue client relationships because of religious or political affiliation, and we didn’t with your account,” Thode’s letter says. “We are required by anti-money laundering and terrorist-finance laws to conduct customer due diligence. As part of that requirement, we collect certain information from all nonprofits about donors and beneficiaries. After account opening, we ask for additional information if we need it to meet our customer due diligence obligations.”
Thode added, “We reached out to you for additional information regarding donors because we have an obligation to understand the source of funds being processed through the bank by any customer.”
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Fred Lucas is chief news correspondent and manager of the Investigative Reporting Project for The Daily Signal. Lucas is also the author of “The Myth of Voter Suppression: The Left’s Assault on Clean Elections.”
Photo “Chase Bank” by Elvert Barnes. CC BY-SA 2.0.