With the CEO of Equifax, U.S. Rep. Katie Porter whipped out a stack of documents as she called attention to the company’s court argument that a devastating 2017 data breach had not harmed any consumers.
With Tim Sloan, at the time the CEO of Wells Fargo, Porter came prepared with a poster board highlighting language in which the bank’s lawyers appeared to dismiss the executive’s statements about restoring consumer trust in the aftermath of the fraudulent account scandal. The poster board, featuring blown-up text from a court filing, displayed a line in which the lawyers described his past statements as “paradigmatic examples of non-actionable corporate puffery, on which no reasonable investor could rely.”
On Wednesday, at a hearing featuring seven top executives of the country’s biggest banks, including Jamie Dimon of JPMorgan Chase & Co. and Brian Moynihan at Bank of America, Porter arrived with a new weapon of choice: a whiteboard, on which she planned to calculate the income and expenses of an entry-level bank employee.
The planned presentation—”showtime,” according to one white-collar defender who was following the action—drew a rebuke from a Republican colleague. Porter would agree to put it down shortly after beginning her questioning, disarmed by the House Financial Services Committee’s top Republican, Rep. Patrick McHenry of North Carolina, who said she had not cleared the visual aid in advance in accordance with the committee’s standard practice.
Still, Porter made her point.
Drawing from the hourly wage listed on an online job posting, along with average housing costs and a minimal food budget, Porter painted a picture of a low-level JPMorgan Chase employee supporting a 6-year-old daughter in Irvine, California. At the $16.50 hourly wage she said she found on a Monster.com posting, the mother would face at least a $567 shortfall each month after taxes and expenses, Porter calculated.
“My question for you, Mr. Dimon, is, how should she manage this budget shortfall while she’s working full time at your bank?” Porter asked.
“I don’t know that all your numbers are accurate. That number is generally a starter job. You can get those jobs out of high school, and she may have my job one day,” Dimon said.
“She may,” Porter replied. “But, Mr. Dimon, she doesn’t have the ability right now to spend your $31 million.”
Porter’s use of court filings at previous hearings confronted the sincerity of the executives testifying at the House Financial Services committee. Wednesday’s theme was inequality, an issue the corporate executives had prepared to address in the lead-up to the hearing.
Although Porter did not spotlight court documents, her questions were otherwise in line with her past approach: leading executives down a path to a public stumble, with preparation and research fueling the fire under the hearing room hot seat.
The tactic has put Porter, a professor on leave from the University of California-Irvine School of Law, firmly on the minds of lawyers who specialize in preparing executives for congressional hearings. Bloomberg reported that Wilmer Cutler Pickering Hale and Dorr was hired by four banks—Citigroup, Bank of America, Bank of New York Mellon and State Street—to advise their leaders. Davis Polk & Wardwell worked with Goldman Sachs and Morgan Stanley ahead of the hearing, according to the report.
Dimon told Porter on Wednesday he was fully sympathetic to the plight of the hypothetical JPMorgan employee who can’t make ends meet.
“She’s short $567. What do you suggest she do?” Porter asked.
“I don’t know. I’d have to think about that.”
“Would you recommend she take out a JPMorgan Chase credit card and run a deficit?”
“I don’t know. I’d have to think about that,” Dimon repeated.
“Would you recommend that she overdraft at your bank and be charged overdraft fees?”
“I don’t know. I’d have to think about it,” Dimon said a third time.
“I’d love to call her up and have a conversation about her financial affairs and see if we could be helpful,” Dimon added.
Porter turned her attention next to Goldman Sachs CEO David Solomon, asking him whether he knew the Earth’s population. He correctly answered it was almost 7 billion. Porter wanted to hear more about the Goldman Sachs “10,000 Women” initiative to provide business skills to women around the globe.
“So let’s assume half of those are women. … And Goldman Sachs’ big initiative is to help 10,000 of them. Is this initiative missing a few zeros?” Porter asked.
“It’s an initiative we started over 10 years ago to try to help women in developing economies where they didn’t have access to resources,” Solomon said.
“It’s been very successful,” he continued. “We’ve now expanded it. We’ve put the programs up online, and we continue to invest in it. We’ll certainly consider whether or not we can broaden it. But I think it’s an excellent program, and we’ll use our resources to expand it.”
With that, Porter turned her microphone away. Her five minutes were up.
Still, after the hearing, Porter would make use of her whiteboard.
“During my questioning, [JPMorgan] CEO Jamie Dimon said he didn’t know if all my numbers were accurate,” Porter tweeted, with a photograph of her calculation scribbled in red and white marker. “Here’s the math so he can check.”