JP Morgan under investigation for hiring China commerce minister’s son
Investment bank JP Morgan is being investigated by US authorities for hiring the son of China’s commerce minister despite him being one of the worst candidates its recruiters had seen, the Wall Street Journal reported.
Gao Jue, son of minister Gao Hucheng, was hired by JP Morgan and kept on during major job cuts despite an extremely poor performance, and after he inadvertently sent a sexually explicit e-mail to human resources, the paper said.
The elder Gao said he was willing to “go extra miles” for the bank if his son was spared from company-wide job cuts in 2008, it said.
Meanwhile, a senior banker described Gao Jue as “immature, irresponsible and unreliable”, according to the report, and one recruiter said in an internal email that she was concerned about his qualifications.
“Jue did very very poorly in interviews, some MDs said he was the worst BA candidate they had ever (seen) and we obviously had to extend him an offer,” she said of his appointment as a business analyst.
Gao joined JP Morgan in 2007 and left less than two years later. After working for several other leading firms he is now with Goldman Sachs, the report said. Gao Hucheng was vice commerce minister at the time his son was hired and was previously China’s chief trade representative.
A fax sent to the commerce ministry by AFP Monday was not immediately answered.
The move to hire Gao was “widely understood” to be supported by William Daley, a senior executive at the bank and former US commerce secretary, the report said.
Daley reported directly to chief executive James Dimon and worked at the bank from 2004 to 2010.
US authorities are already investigating hiring practices at JP Morgan under the Foreign Corrupt Practices Act, a law that forbids US companies exchanging anything of value for a business advantage.
The bank disclosed the probe in a 2013 regulatory filing, although Gao Jue was not previously mentioned as being connected to the investigation. Hong Kong officials have also begun to look into the bank’s recruitment activities.
China’s commerce ministry is not a client of JP Morgan, but the regulator has power over mergers of companies that do business in China, and high-ranking government officials have wide-ranging powers beyond their public portfolio.
While criminal charges are unlikely to be a result of the probe, the bank could be fined and it may be ordered to change its hiring practices.
None of JP Morgan, Daley, Gao Jue nor his father have been accused of any wrongdoing, the Wall Street Journal reported.