Justice Department Urges Judge to Throw Out Better Markets Lawsuit

The Department of Justice has responded to a lawsuit brought by the public interest group Better Markets in February challenging the Department’s $13 billion settlement with JPMorgan Chase.

Better Markets filed the lawsuit challenging the Justice Department’s authority to unilaterally enter into the unprecedented and historic $13 billion agreement with JPMorgan Chase, which was the largest settlement with a single entity in the nation’s history by more than 300%.

The November 2013 agreement gave JPMorgan Chase – with no judicial review or approval – blanket civil immunity for years of alleged pervasive, egregious and knowing fraudulent and illegal conduct that contributed to the 2008 financial crash and the worst economy since the Great Depression.

In its response, filed yesterday, the Justice Department calls on the judge to throw out Better Markets lawsuit.

The Department says Better Markets “believes that the Department of Justice should have driven a harder bargain, so it wants a court to second-guess the terms of the settlement.”

“But it is well established that an executive branch agency’s decision to enter into a settlement agreement is presumptively unreviewable,” the Department says. “Indeed, the Attorney General has plenary power to settle claims of the United States, and as the Supreme Court has explained, that includes ‘the power to make erroneous decisions as well as correct ones.’”

Better Markets does indeed consider the Justice Department’s settlement decision erroneous.

It says the Justice Department is seeking “to prevent any transparency, oversight or accountability for its historic and unprecedented agreement to give JPMorgan Chase total civil immunity for years of illegal conduct contributing to the subprime mortgage bubble and the 2008 financial crisis it caused.”

The Department’s filing comes in response to a lawsuit filed in February by Better Markets challenging its authority to enter the settlement.

The Department is reportedly poised to reach a similar settlement with Bank of America.

“The American system of government is based on checks and balances as well as on transparency so that the American people can be informed and hold the government accountable,” said Dennis Kelleher, President and CEO of Better Markets. “The Department’s mostly secret actions in granting the biggest, richest, most politically well-connected bank in the U.S. blanket civil immunity for years of egregious illegal conduct that touched every single American violates all those principals. The executive branch through the Department of Justice simply cannot, on its own and without any review or approval by anyone, including the courts, cut such an historic deal and leave the American public in the dark.”

“Americans have already watched their government bail out Wall Street and save the banks with no strings, while Americans from coast to coast suffered from the economic calamity that Wall Street’s illegal conduct caused. Given that our government now claims to be bringing accountability to Wall Street, citizens are entitled to know the key facts related to this case to judge for themselves and to have an independent court evaluate the settlement to determine if it is in fact fair and in the public interest. The trust, confidence and faith of the American people in their institutions of government are at stake in this case.”

“The Department of Justice has had every opportunity to be transparent about this process and allow a court to determine whether or not the deal is fair to the American people. Instead, the Department is continuing to fight to keep the details of JP Morgan’s illegal activities a state secret, and prevent the public from learning the full truth about the damage that JP Morgan Chase and Wall Street did to our economy.”

“Their filing today simply doubles down on secrecy – hiding JP Morgan’s dirty deeds at the expense of the public’s right to know,” Kelleher said.  “What was the extent of JP Morgan’s culpability in triggering the financial crisis? How much potential liability did the company have? Does $13 billion represent JP Morgan’s fair share of the blame for a crisis whose ongoing economic cost is at least $13 trillion? There is no way to know – because the Justice Department agreed to keep all of those important details hidden. Ironically, the only thing we do know about this settlement is that it is almost all tax deductible – yet another windfall for Wall Street while taxpayers again get stuck with the bill.”

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