By Peter Schroeder - 11/04/13 12:12 PM EST
Liberal advocacy groups are mounting pressure on the Justice Department to bar JPMorgan from deducting from the bank’s taxes any portion of a broad government settlement in the works.
The reportedly $13 billion settlement over the bank’s mortgage activities before the financial crisis, which is still being hammered out, would be the largest such settlement in U.S. history. But reports that JPMorgan is seeking use up to $4 billion of the settlement as a tax write-off has led to protests from liberal groups and lawmakers.
On Monday, two groups delivered over 160,000 petitions to the Justice Department calling for barring any potential tax benefit. The groups, U.S. PIRG and Americans for Tax Fairness, argue it is patently unfair for taxpayers to help subsidize JPMorgan’s fines through the tax code.
The potential tax perk has also attracted attention on Capitol Hill. Five U.S. senators wrote to Attorney General Eric HolderEric H. HolderMothers of the Movement: Hillary ‘isn’t afraid to say Black Lives Matter’ The Trail 2016: One large crack in the glass ceiling Airbnb race controversy hits Dem convention MORE Tuesday, urging him to explicitly prevent any tax writeoffs under the settlement. That letter was signed by Sens. Mazie HironoMazie HironoOvernight Finance: Senate sends Puerto Rico bill to Obama | Treasury, lawmakers to meet on tax rules | Obama hits Trump on NAFTA | Fed approves most banks' capital plans Senate Dems pledge to keep fighting over Zika Senators to Obama: Investigate whether Pentagon misled Congress MORE (Hawaii), Bill NelsonBill NelsonTim Kaine backs call to boost funding for Israeli missile defense More automakers admit to equipping new cars with defective airbags GOP warming up to Cuba travel MORE (Fla.), Martin HeinrichMartin HeinrichWeek ahead: Republicans dig into FCC agenda Dem senators blast ‘sprawling’ expansion of spy power Overnight Cybersecurity: Questions linger after Clinton email probe MORE (N.M.), Sheldon WhitehouseSheldon WhitehouseWhy Kaine is the right choice for Clinton Report: More, stronger cyber attacks to flood networks Senate Dems push Obama for more Iran transparency MORE (R.I.) and Elizabeth WarrenElizabeth WarrenThe Trail 2016: One large crack in the glass ceiling Meet Hillary's Wolf of Wall Street CNN wins first night of DNC as Philly tops Cleveland in ratings race MORE (Mass.).
In the House, Reps. Peter WelchPeter WelchDems vow to keep heat on GOP over guns Can Congress tackle chronic illness in Medicare patients? Defiant Sanders tells supporters: 'You can beat the establishment' MORE (D-Vt.) and Luis GutierrezLuis GutierrezIsrael’s false friends Hispanic lawmakers face painful decision on Puerto Rico Frustration with White House builds in Hispanic caucus MORE (D-Ill.) introducing legislation barring companies from using the tax code to deduct costs from government settlements, and Welch also sent a letter to the bank’s chief executive, Jamie Dimon, urging him to avoid the writeoff.
While the bulk of the settlement is still being finalized, the Federal Housing Finance Agency announced in October it had struck a $4 billion settlement with the bank, after it charged JPMorgan broke securities laws when it sold securities loaded with risky mortgages to Fannie Mae and Freddie Mac.