By Pam Martens and Russ Martens: January 29, 2018

Someone really needs to send the good folks at Fortune Magazine a heads up that naming a bank that has admitted to three criminal felony counts in 2014-15 and lost more than $6 billion gambling with its depositors’ money does not have the makings for a most-admired anything, unless possibly most-admired for dodging jail time.

JPMorgan Chase has decided to spin the award as follows on its website:

“JPMorgan Chase was given the top industry ranking the second year in a row on Fortune magazine’s list of ‘The World’s Most Admired Companies of 2018.’ Fortune also ranked the firm as the tenth most-admired company in the world.”

One might suspect from the above that the industry in which JPMorgan Chase was ranked was the overall financial services industry or overall banking industry. But it wasn’t. JPMorgan Chase achieved its top award by being evaluated among its peers in the “megabank” category. Let’s face it, that’s not exactly an industry that has distinguished itself since crashing the U.S. economy in 2008 and leaving a trail of crimes around the globe ever since.

In addition, it wasn’t the general public that was casting a vote for the companies it most admires, as one would normally assume from the title of the award. It was a pack of industry insiders. This is the methodology Fortune says it used to cull out the most admired companies. First, Fortune narrowed its list based on revenues, effectively giving only the biggest companies a shot at the award. (Big is decidedly not better when it comes to banking, as the banking collapses of 2008 and JPMorgan’s three felony counts confirm.) Fortune writes:

“As we have in the past, Fortune collaborated with our partner Korn Ferry on this survey of corporate reputations. We began with a universe of about 1,500 candidates: the 1,000 largest U.S. companies ranked by revenue, along with non-U.S. companies in Fortune’s Global 500 database that have revenues of $10 billion or more. We then winnowed the assortment to the highest-revenue companies in each industry, a total of 680 in 29 countries. The top-rated companies were picked from that pool of 680; the executives who voted work at the companies in that group.”

That sounds a lot like letting the hunting band vote for the best hunters instead of allowing the general public who actually buy and use the products and services to decide which companies they admire and respect based on the quality of the products and services.

Fortune also adds this under its methodology explanation:

“To determine the best-regarded companies in 52 industries, Korn Ferry asked executives, directors, and analysts to rate enterprises in their own industry on nine criteria, from investment value and quality of management and products to social responsibility and ability to attract talent. A company’s score must rank in the top half of its industry survey to be listed.”

Adding to the irony of the award is the fact that JPMorgan Chase ranked number one on Fortune’s list of megabanks while Citigroup ranked at the very bottom as number 8. Citigroup received only one criminal felony count in 2015 for its involvement in rigging foreign exchange markets versus three felony counts for JPMorgan Chase: two for its involvement in the Bernie Madoff Ponzi scheme and one for its involvement in rigging foreign exchange markets. Somehow three felony counts makes a megabank more admired than just one felony count.

JPMorgan Chase dates back to 1871. It managed to survive 143 years without admitting to criminal charges filed by the U.S. Department of Justice. But under the reign of Chairman and CEO Jamie Dimon, the bank has piled up more than $36 billion in fines and restitutions along with the three felony counts.

Before the three felony counts there was a $13 billion settlement with the Justice Department and Federal and State regulators in 2013 for JPMorgan Chase’s role in peddling subprime mortgage products as worthy investments when the bank had good reason to believe they would blow up.

In 2012 Dimon was hauled before Congress to explain why his bank was making high risk derivative bets with depositors’ money in London. The bank eventually owned up to losing $6.2 billion in the exotic trades. The saga became infamously known as the London Whale scandal. In 2013, the U.S. Senate’s Permanent Subcommittee on Investigations released a damning 307-page report on the matter. The same year, the regulator of national banks, the Office of the Comptroller of the Currency (OCC), found that the bank had engaged in unsafe and unsound banking practices, writing:

“The credit derivatives trading activity constituted recklessly unsafe and unsound practices, was part of a pattern of misconduct and resulted in more than minimal loss, all within the meaning of 12 U.S.C. § 1818(i)(2)(B)”;  and “The Bank failed to ensure that significant information related to the credit derivatives trading strategy and deficiencies identified in risk management systems and controls was provided in a timely and appropriate manner to OCC examiners.”

Senator Carl Levin, Chair of the Senate Permanent Subcommittee on Investigations at the time, said that JPMorgan Chase “piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight, and misinformed the public.”

The serial crime spree at JPMorgan Chase was so unprecedented that two trial lawyers, Helen Davis Chaitman and Lance Gotthoffer, published a stunning book on the subject, comparing the bank to the Gambino crime family. In addition to the settlements noted above, the authors add more details as to what has occurred on Dimon’s watch, such as:

“In April 2011, JPMC agreed to pay $35 million to settle claims that it overcharged members of the military service on their mortgages in violation of the Service Members Civil Relief Act and the Housing and Economic Recovery Act of 2008.

“In March 2012, JPMC paid the government $659 million to settle charges that it charged veterans hidden fees in mortgage refinancing transactions.

“In October 2012, JPMC paid $1.2 billion to settle claims that it, along with other banks, conspired to set the price of credit and debit card interchange fees…

“In September 2013, JPMC agreed to pay $80 million in fines and $309 million in refunds to customers whom the bank billed for credit monitoring services that the bank never provided.

“On December 13, 2013, JPMC agreed to pay 79.9 million Euros to settle claims of the European Commission relating to illegal rigging of benchmark interest rates.

“In February 2012, JPMC agreed to pay $110 million to settle claims that it overcharged customers for overdraft fees.

“In November 2012, JPMC paid $296,900,000 to the SEC to settle claims that it misstated information about the delinquency status of its mortgage portfolio.

“In July 2013, JPMC paid $410 million to the Federal Energy Regulatory Commission to settle claims of bidding manipulation of California and Midwest electricity markets.

“In December 2013, JPMC paid $22.1 million to settle claims that the bank imposed expensive and unnecessary flood insurance on homeowners whose mortgages the bank serviced.”

Earlier this month, Gallup released a poll showing that only 32 percent of Americans have a “great deal of confidence” in their bank. And yet, somehow, JPMorgan Chase managed to make it into Fortune’s top 10 of the “World’s Most Admired Companies” this year, beating out widely popular companies like Nike, American Express and Johnson and Johnson. (The same methodology as described above was used to arrive at the list.)

All of this goes to show that when it comes to polling to arrive at the most admired companies, it all depends on whom one asks.