Frank Bisignano allegedly spied on colleagues and misused company funds during his stint at JPMorgan Chase more than a decade ago.
Those, at least, were the most sensational accusations in a lengthy Wall Street Journal report this week on Donald Trump’s IRS chief, who spent years at the big bank in various senior positions including co-chief operating officer working directly under CEO Jamie Dimon.
Given the gravity of the story, I called JPMorgan, which had previously called Bisignano “a trusted adviser for years who we have known for decades and who is distinguished for his grit and determination. We applaud his service to our country both at the Social Security Administration and the IRS.” I then spoke to a senior JPMorgan executive who has firsthand knowledge of these more-than-a-decade-old claims.
He said the “bank looked into the allegations of spying and misuse of funds and found no evidence of wrongdoing.”
A spokeswoman for the Journal said: “Our reporting is accurate, thoroughly vetted, and backed by multiple knowledgeable sources. We stand behind the story.”
Full disclosure: On The Money is a column in the New York Post, which shares a corporate owner with the Wall Street Journal. Back in the day, your humble correspondent spent years at the Journal reporting on Wall Street. That’s how I got to know the players involved in this story – from Bisignano to Dimon to Wells Fargo CEO Charles Scharf, who figures prominently in it – and also the president himself when he was a real estate mogul and reality TV star.
In other words, I have no horse in this race other than having to cover something, which if true is a pretty big story. Consider, Bisignano now runs both the Internal Revenue Service and the Social Security Administration, which the Journal rightly says “puts him atop of two government organizations that store vast reams of sensitive financial data about every taxpayer.” Bisignano was brought on to apply his Wall Street knowledge to streamline government and make it more efficient for taxpayers.
All of which makes this part of the story all the more serious: “More than a decade ago, he was co-chief operating officer at JPMorgan Chase, another perch that gave him visibility and authority over every part of a massive financial institution. At the bank, people familiar with the matter said, he spied on fellow executives—using his authority over the security department and position to access sensitive information and internal communications without an apparent business justification.”
One of those executives was Scharf, then Dimon’s consumer bank chief, the paper said. There were other alleged misdeeds cited in the piece, some of which seem like normal grousing about a guy who, if you know Bisignano, can be a little rough around the edges.
That’s despite the fact that at least one of those allegations also involves something pretty serious: the alleged “use of company resources for his own benefit, including allegations Bisignano misused the corporate jet for personal purposes, people familiar with the matter said.”
Again, using the corporate jet for personal reasons is the easiest way to get jammed up on Wall Street, which is why I was a little shocked to read that part of the story. Knowing what I know about Bisignano, my first reaction is that he’s probably too careful to do something that dumb that would put him at odds with a legendary control freak like Dimon.
That allegation, according to the bank executive who asked not to be quoted by name, was investigated as well and JPM “found no evidence,” the executive said. Bisignano, through a lawyer, denied that charge as well as the spying allegation.
I asked Scharf about the mess. He tells me that he and Bisignano are friends, and that he has heard rumblings about spying in the past. “All I know is what I’ve seen and I’ve never seen any spying,” he said. Scharf, who left JPM in 2012, said he and Bisignano spoke after the story ran and Bisignano denied the matter. In fact the two “joked” about it.
One possible explanation of what went down came from another former colleague who explained Bisignano’s role at JPM this way: “Bisignano was in charge of compliance (as co-COO) ALL senior managers were told to work with compliance, the in-house police in charge of monitoring emails internally as well as externally making sure we all were complying with firm policy. It’s now known as tech/opps but back in the day, those functions were known as back office. Frank was given the job by Jamie and made something of it. They looked at everything we did.”
Again, the Journal cited multiple sources; Bisignano through his attorney denied each allegation. And remember, all this happened more than a decade ago. Since leaving JPM in 2013, Bisignano has had a pretty remarkable career as CEO of payments processor First Data, and later with Fiserv after the two merged and just before he joined Team Trump as a change agent to reform two institutions known for their bureaucratic bloat.
To address those issues he recently hired another JPMorgan executive, Vince LaPadula as his No. 2 at the IRS. Before his exit from the big bank, LaPadula tells me he sat down with Dimon and asked if he should work for Bisignano. “Jamie told me absolutely… he’s Mr. Fix It.”
One other question I have is why am I reading all of this now?