Tuesday, April 3, 2018

JP Morgan and Chase; Foreign Bribery Case (2013-2016)

J.P. Morgan and Chase CEO: Jaime Dimon
In 1977, the United States government signed the Foreign Corrupt Practices Act; this act forbids companies to make payments to foreign government officials in return for business.  There was suspicion of JP Morgan and Chase breaking this act; after three years, federal authorities determined that JP Morgan and Chase were in violation of this act. Although, hiring people related to government officials, it is illegal to do it if you are expecting money and/or business in return.  It was reported that JP Morgan and Chase hired unqualified children of Chinese leaders to gain business with them. Over seven years, they had hired about 100 interns and full time employees who were children of the elite and because of this they had made over 100 million dollars.

The government found emails that helped prove this wrong and how there was a very strong link with hiring these people for business.  According to the Wall Street Journal the government had found multiple emails proving this. There was one email where a man stated to a worker in New York on how to handle the son and how to leverage the father in China.  There was also another instance where one of the children were very immature. He was the son of a Chinese minister and he did not perform well at his interview, messed up getting his work visa, and accidently sent an inappropriate email to a person who worked in human resources.  There was also another email about this person sent by a senior banker calling him “immature, irresponsible, and unreliable”. It was also reported that some of the senior executives that worked in their offices in Asia had left as soon as the investigation started; since they did this people were suspecting that they were guilty, when the investigation started no one knew if they would be facing criminal charges or civil charges, and by leaving they thought they would get out of facing charges.
Many stakeholders were negatively affected by this decision to hire these unqualified princelings.  First the already employed, qualified employers were affected because they now had more work put on them, these children did not know what they were supposed to do so the employees had to pick up their slack and do it themselves or take time out of their day to . teach them how to do it.  The customers were affected because they had people handling their money that did not kno
J.P. Morgan and Chase bank in China
w how to properly do their job.
Once J.P. got caught doing this even more people were negatively affected.  Now the Chinese government was affected, their children lost their jobs, and the government themselves lost the deal with J.P., the company now owed a settlement of $264 million dollars.  The company made about $100 million from hiring the princelings, but now they were going to lose an additional $164 million dollars and made nothing from breaking the law.
Utilitarianist’s would find this to be unethical.  They believe that the most important thing is happiness.  The more people that are happy, the better. In this case, the only people this benefited was the Chinese government, the unqualified workers, the people that got the money from doing this.  More people were affected poorly, workers now had to work with people that did not know what they were doing and the would not get paid more from it even though the company made a lot from it, customers money could have been handled poorly, and qualified people were missing out on the job opportunity.
Kant would also be against this action. He believed in rationality and good will. He believed you should not use people as mere means. He would be against this because J.P. Morgan and Chase did not act rationally; this decision hurt a lot of people and it went against the law. It was not for good will, they did it to try and make a bigger profit. All the workers and the children were treated unfairly and were just used as pawns in order to gain business with the Chinese government.
Chinese Government
Individualists believe that the only obligation a business has is to make a profit for its owners and/or stakeholders, but it must stay within the law. In this case, they did make a profit, but that profit was lost because they broke a law. They ended up making around $100 million dollars, but have to a pay a settlement of $264 million dollars. Therefore, they did not stay within the law and ended up losing money, so individualists would find this to be unethical.
Virtue Theory
Virtue theory focuses on how the situation itself is unethical.  It focuses on honest and justice. In this case, the company was unhonest, what they did was technically against the law; they hired people and were able to make money off it, going against the Foreign Corrupt Practices Act.  They were dishonest in the fact that they tried to argue that these people were qualified to work there when most of them did not meet the requirements and knowledge needed.

1 comment:

  1. Great work Sarah. I though you articulated your controversy very well and explain each theory and how it connected to your case ver well.