Massachusetts Democrats seeking information on Scott Brown and JPMorgan Chase

Scott Brown has a little JPMorgan Chase problem:

Also a potential issue: When Brown got all those donations from JPMorgan Chase, it coincided perfectly with when Chase officials were pressing Federal Reserve officials for a loophole in Dodd-Frank provisions meant to limit risky trading.

All of which smells slightly fishy to the Massachusetts Democratic Party, which has filed a Freedom of Information Act request with six government agencies, seeking to find out whether Brown was involved in helping JPMorgan Chase with its lobbying.

In a news release, the party said that Mr. Brown's re-election campaign had received at least 30 contributions in February from employees of JPMorgan and the company's federal political action committee. The New York Times reported last week that JPMorgan executives had met with Federal Reserve officials that month to express concerns about the restrictions on banks' proprietary trading'known as Volcker Rule'that were called for in the Dodd-Frank financial regulation law.

The Times reported that the company had lobbied over months for loose restrictions that would allow banks to make big bets in their portfolios, including some of the types of trading that led to the $2 billion loss that JPMorgan reported last week. (According to people with knowledge of the losses, that figure is now reported to be at least $3 billion.)

Brown's defense in all of this, when he's not trying to change the subject, is that he voted for Dodd-Frank. But he only voted for the bill after having negotiated a big loophole in the Volcker Rule provision allowing big banks to continue to invest money in risky hedge funds and private equity firms.

At the time, HuffPo's Shahien Nasiripour wrote about one possible, prescient, scenario explaining how this small change would allow banks to place bets with billions of dollars more than was envisioned by the original Volcker rule proposal.

Using JPMorgan Chase, the nation's second-largest bank by assets with more than $2.1 trillion, as an example, the bank would be able to invest an additional 40 percent of its cash, or an extra $1.1 billion for a total of $4 billion, in the activities that Volcker wanted to prohibit banks from engaging in, according to the firm's latest annual filing with the Securities and Exchange Commission.

JPMorgan Chase has a lot of reasons to reward Scott Brown that we know about. Hopefully this request from the Democrats in Massachusetts will shed some more light on just how much more there is to the picture.

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