By Pam Martens and Russ Martens: March 17, 2025 ~

During Senator Chuck Schumer’s (D-NY) political career, three of his five largest campaign donors have been Wall Street megabanks – Goldman Sachs, Citigroup and JPMorgan Chase. His second largest campaign donor over his political career are the partners and employees of Big Law firm Paul Weiss, where his brother, Robert, is actively engaged in Mergers and Acquisitions by major corporations that are publicly traded on Wall Street. Paul Weiss, as a firm, represents some of the largest banks and trading houses on Wall Street.

Last week Schumer, the Minority Leader of the U.S. Senate, did a major pivot between Wednesday and Friday. On Wednesday he vowed that Democrats would stand firm in voting against the Republican version of a Continuing Resolution (CR) to keep the federal government open, a spending bill deeply opposed by the majority of Congressional Democrats, who viewed it as a slap in the face to the working class of America. By Friday, Schumer had flipped and voted in favor of the bill – outraging progressives in the party.

Schumer explained his flip-flop as follows on the Senate floor: “As bad as passing the CR is, allowing Donald Trump to take even more power via a government shutdown is a far worse option.”

Shutting down the U.S. government would have had an immediate negative impact on stock prices on Wall Street; the U.S. dollar; potentially the credit rating of U.S. sovereign debt; and it would increase the existing threat of uninsured deposits stampeding out of U.S. banks – raising the threat of another banking crisis potentially worse than the one that occurred in the spring of 2023.

On November 14, 2023, the then Chair of the Federal Deposit Insurance Corporation (FDIC), Martin Gruenberg, testified before the Senate Banking Committee on why his agency had to pay out billions of dollars as a result of the spring bank runs. Gruenberg revealed that the biggest losses to the Deposit Insurance Fund when Silicon Valley Bank (SVB) and Signature Bank failed in March, did not come from bad loans or underwater debt instruments but from the FDIC having to make good on the banks’ uninsured deposits that were stampeding out the door. (The FDIC temporarily took the banks into receivership when they failed until they could be sold.) Gruenberg stated:

“As of June 30, 2023, the FDIC estimated the cost for the failures of SVB and Signature Bank to total $18.5 billion. Of that estimated total cost of $18.5 billion, the FDIC estimated that approximately $15.8 billion was attributable to the cost of covering uninsured deposits as a result of the systemic risk determination made on March 12, 2023, following the closures of SVB and Signature Bank.”

The banking crisis of 2023 set off a panic bank run where depositors were withdrawing their uninsured deposits at banks from coast to coast, including from the megabanks. (Federal deposit insurance is capped at $250,000 per depositor per bank.)

What most Americans do not know is that the vast amount of uninsured deposits that are concentrated at just four Wall Street banks could tank the U.S. economy if there was a bank run at these institutions.

According to the Call Reports for the period ending December 31, 2024, uninsured deposits at the domestic branches of the following four megabanks were as follows:

JPMorgan Chase: $1.15 Trillion

Wells Fargo: $652.7 Billion

Citibank, N.A. (part of Citigroup): $594.5 Billion

Bank of America: $821.9 Billion

The above four banks’ domestic uninsured deposits total $3.2 trillion. That’s 202 times the amount of losses on uninsured deposits that the FDIC had to absorb in the 2023 banking crisis.

Stock markets are said to “climb a wall of worry,” which they had been doing for most of January. But markets collapse under a sea of chaos, which has been the operative descriptor of the Trump administration since February.

The other notable news item that may be connected to Schumer’s pivot on the Republican’s spending plan is that the same day (last Friday) that the Senate voted and passed the plan, Donald Trump signed an Executive Order that could potentially cripple the ability of Schumer’s brother’s law firm, Paul Weiss, to stay in business.

The Executive Order stripped the many lawyers holding security clearances at the firm of their security clearance – meaning the firm would have to drop major cases that required their review of classified government documents for their clients, and decline taking new cases involving classified government documents.

The order said the security clearances would be suspended “pending a review of whether such clearances are consistent with the national interest.”

The Executive Order also cut off Paul Weiss lawyers’ access to government buildings and was silent as to whether that included federal courts. The order also prevented the law firm from getting federal jobs and to receive money from federal contracts.

Every major corporation and Wall Street firm with whom Paul Weiss has done business for 150 years now understands that it has been placed on Donald Trump’s growing list of blacklisted law firms. That is going to have a chilling impact on its ability to attract new business until the case winds its way through the courts.

Paul Weiss has gotten many firms on Wall Street off easy for serious crimes. But that’s not the basis of Trump’s attack on the firm. The Executive Order is all about getting personal revenge for Trump.

Trump specifically cites in the Executive Order the law firm’s representation of the District of Columbia Attorney General against the January 6 attackers, (who were trying to keep Trump in office illegally); and it names a Paul Weiss former law partner, Mark Pomerantz, for joining the Manhattan District Attorney’s office “solely to manufacture a prosecution against me….”