- JPMorgan Chase launched a public policy center in Washington, D.C., led by Obama administration alumnus Heather Higginbottom.
- The first project is lowering barriers to jobs for people with criminal backgrounds, and includes lobbying for specific policies and a $7 million investment in community organizations in several American cities.
- CEO Jamie Dimon, corporate responsibility head Peter Scher, and Higginbottom told Business Insider the center is the culmination of six years’ worth of initiatives based on the idea that business should play a larger role in benefiting society.
- This article is part of Business Insider’s ongoing series on Better Capitalism.
- Visit BI Prime for more stories.
JPMorgan Chase launched a public policy center in Washington, D.C. on Monday, and its first undertaking is advancing policies that make it easier for people with criminal backgrounds to get jobs. This includes a $7 million investment in community centers working toward this, in Chicago, Detroit, Nashville, New York, Seattle, and Wilmington, Delaware.
The center is led by Heather Higginbottom, who held the second-most senior positions in the State Department and Office of Management and Budget under President Barack Obama. The bank hired Higginbottom in April, and she has since been building the team now called the JPMorgan Chase Policy Center. Higginbottom’s team will be overseen by Peter Scher, head of corporate responsibility and chair of the mid-Atlantic region.
The center is the culmination of six years’ worth of tying corporate responsibility initiatives to public policy, as chairman and CEO Jamie Dimon became increasingly vocal on the subject. On a conference call with Higginbottom and Scher ahead of the center’s announcement, Dimon told Business Insider that as he became more involved on the policy side, he had a “growing a deep frustration” with the state of the American economy. “There are fixes to our problems and we’re just not fixing them,” he said. The PolicyCenter is JPMorgan’s ambitious new plan to link the bank’s lobbying, corporate responsibility, and philanthropic resources in an attempt to make those fixes, as it sees them.
“We believe that business has an important role to play in promoting a more inclusive economy”
Since 2016, Dimon’s annual letter to shareholders has had a section on public policy, starting small and getting increasingly in-depth. The letter he published this past April largely read like a policy paper, with proposals on how to tackle inequality in the United States and drive growth, and it came in at 51 pages, far longer than his previous ones.
The day it was published, CNBC’s Wilfred Frost and Hugh Son cited unnamed sources close to Dimon saying that he had seriously considered a 2020 presidential run before deciding he was in a better position of influence in his current role than as a candidate.
Dimon told Business Insider on our call that his “heightened interest” in policy really took hold when he became the chair of the Business Roundtable (BRT), a policy advocacy group comprising nearly 200 CEOs of America’s largest companies, in January 2017. The BRT extended Dimon’s standard two-year term by an extra year, and in August, Dimon had the group issue a new statement on the purpose of a corporation, ditching its prior association with shareholder primacy for a “stakeholder” approach.
Higginbottom echoed the sentiment in our interview, saying, “We believe that business has an important role to play in promoting a more inclusive economy.” She referred to the ways her team will learn from the best practices of others at the bank, like the JPMorgan Chase Institute think tank, the JPMorgan Chase Foundation, and corporate responsibility’s five-year, $500-million AdvancingCities initiative that launched in 2018.
Business Insider named Scher one of its “100 People Transforming Business” this year for the way he’s translated Dimon’s vision into a corporate responsibility arm that we wrote “rivals major foundations in its size and scope.” He told us that the turning point for his team was 2013’s $250 million New Skills at Work investment in job training for workers whose jobs would be at risk of loss to automation, and the $100 million investment in Detroit the following year, not long after the city had declared bankruptcy. In both cases, Scher and his team developed relationships with local leadership in communities it went to, including a strong relationship with Detroit Mayor Mike Duggan.
The experiences established a blueprint for AdvancingCities and related programs, which are not limited to the US. In our earlier interview, Scher told us that the major change for his team was linking corporate responsibility’s goals to those of the entire business. “I think there’s also recognition that we see that we want to grow our business in these places and, ultimately, if we’re going to grow the economy of a France or Michigan or the greater Washington region, you can’t have all these economic hurdles holding people back,” he said.
With the PolicyCenter, Higginbottom is going to attempt to scale JPMorgan’s recent initiatives under Scher at a national level through political influence in D.C.
Pushing for change
Dimon has been vocal about his support for different tax policies over the years, and JPMorgan’s longstanding lobbying arm will continue advocating for the policies it believes will directly benefit its business. The PolicyCenter, however, will be focused on proposals benefiting the entire country, rather than just the financial sector.
Its initial project, lowering barriers for those with criminal records, is a good example of what to expect from it. Dimon said that it was inspired from working with Scher’s team.
“When we’ve been traveling around all the cities, we speak to the mayors — they would identify this as one of their bigger problems that they have,” he said. “They have a lot of returning citizens and they need to make them productive citizens, which means housing and jobs.”
The PolicyCenter will be pushing for six changes:
- Amending the FDIC’s Federal Deposit Insurance Act Section 19, to make it easier for financial institutions to hire people with criminal backgrounds, with reasonable limitations.
- Restoring access to Pell Grants, federal student loans, for academically eligible prisoners.
- Making it illegal to require disclosing a criminal record on a job application, filing a background check only after an offer has been made. JPMorgan has already “banned the box,” as the practice of removing the disclosure requirement is called, and hired 2,100 people with criminal records in 2018.
- Enacting automatic record clearing of most misdemeanors and most crimes committed as a juvenile after a set period of time.
- Reforming fines, making them easier to pay, and removing the seizure of a driver’s license as punishment for failing to pay.
- Expanding entrepreneurship resources to formerly convicted people.
The $7 million accompanying this effort will go toward organizations that assist formerly incarcerated people and others with criminal backgrounds with job training, mentorship, financial health, and access to employers.
Criminal justice reform also has the benefit of being a bipartisan issue at the moment, almost a year after President Donal Trump signed a reform bill with huge support in both the House and Senate. The PolicyCenter is intended to be nonpartisan, and for its launch, it has partnered with Democratic Gov. John Carney and Republican Gov. Gary Herbert on this first project.
Other partnerships at launch include the giant conglomerate Koch Industries, a longtime advocate of banning the box and similar policies, the Society for Human Resource Management (which itself partnered with Koch), and The Leadership Conference on Civil and Human Rights, an association of more than 200 influential civil rights groups.
If Dimon’s annual letter is any indication, future issues may include topics like healthcare, infrastructure, immigration, and student loans. The letter did not, however, mention climate policy, even though JPMorgan published its first report on the subject earlier this year. Dimon told us that the PolicyCenter may eventually take a position on it.
Higginbottom stressed that the center will look for areas of agreement to work on regardless of which party, and which branch of that party, is in power — though, by definition, that assumes an openness to moderate policy stances. When asked if the team is considering how to adapt to the results of the 2020 election, which may result in a progressive Democratic administration hostile to corporate influence, Dimon said it would be “a really bad mistake” if he were to run his company by “bending to the wind” wherever it was blowing.
“We’ll have Republican presidents we’ll have Democratic presidents,” he said. “But if we are known for being rational advocates of good policy, we’ll talk to all of them.”
The role of a corporation
There’s been an increasingly popular narrative — and it’s the one that Business Insider’s “Better Capitalism” series is founded on — that the shareholder activism and deregulation of the 1980s, while initially helpful in cutting stagnation, went too far and led to a toxic pursuit of short-term profits, and that now CEOs are recognizing that customers and employees want them to adjust.
“There is a little truth to that,” Dimon said, “but I have known these companies for 40 and 50 years. A lot of them haven’t changed that much.” Dimon was, of course, the lead on the Business Roundtable’s statement against short-term profits above all else, but he does not see it as a matter of regulation. He believes that companies need to be taking a stronger role in society to pick up the slack of the public sector. Scher added that government hasn’t had the “resources or expertise” to tackle many of the societal challenges of the last decade.
Dimon, then, will be using the resources of the nation’s largest bank to further exert influence on American society, and he won’t have to run for office. But he’ll have the help of a policy center.
“The politics part, I think, probably, is the toughest part,” he said. “But you have to put your elbow into this or you’re not going to make it better.”