the trans-Pacific gravy train

8-20-2913  For more than a decade Wall Street’s biggest banks have hired the sons and daughters of senior Chinese government officials in the hopes that they can open doors and secure deals in the world’s fastest-growing major economy.  The hirings were not well publicized, but they were no secret. The grandson of former Chinese President Jiang Zemin once worked for Goldman Sachs; the daughter of former Prime Minister Wen Jiabao used to work for Credit Suisse; and in 2006, the son-in-law of Wu Bangguo, then a member of the Politburo of the Communist Party, helped Merrill Lynch win a deal to arrange a $22 billion listing of the state-owned banking giant I.C.B.C.

While Wall Street may be familiar with the recruiting of the children of China’s political elite, a new Securities and Exchange Commission investigation has raised the question of whether hiring the children of officials of state-controlled companies crosses a line.  The S.E.C. is examining whether JPMorgan Chase tried to win business in China by hiring the children of two senior Chinese officials, in possible violation of American anticorruption statutes.  https://webcache.googleusercontent.com/search?q=cache:26ojmqucxh8J:https://dealbook.nytimes.com/2013/08/20/many-wall-st-banks-woo-children-of-chinese-leaders/+&cd=2&hl=en&ct=clnk&gl=us

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11-17-15  A decade ago a J.P. Morgan Chase & Co. managing director in Asia sent an email to the investment-banking team:  “As you know, the firm does not condone the hiring of the children or other relatives of clients or potential clients...In fact the firm’s policies expressly forbid this,” the director wrote.  Within two years, however, the team had begun orchestrating the hiring of dozens of relatives of powerful government officials in Asia with the express purpose of winning business, U.S. authorities said Thursday.  The bank had created a separate channel to get unqualified applicants through the hiring process, and it later began tracking profits from any subsequent business awarded because of the hires, they said.

One candidate was described in an email as “the worst [business analyst] candidate they had ever see[n].” Another had a “napping habit” that would be an “eye-opening experience” for New York colleagues. In both instances, the candidates were hired, according to criminal and civil settlements the bank reached with the Justice Department, the Securities and Exchange Commission and the Federal Reserve.  All told, the bank hired around 100 applicants referred by government officials at Chinese state-owned firms, and earned at least $35 million as the result of a “corrupt scheme,” according to the settlement documents.  https://www.wsj.com/articles/j-p-morgan-to-pay-264-million-to-end-criminal-civil-foreign-corruption-cases-1479398628