Tony West, the associate attorney general who brokered nearly $37 billion in U.S. government financial settlements with Wall Street banks over the mortgage-fraud issues that helped spark the financial crisis, says an unexpected phone call from Jamie Dimon in 2013 proved a key moment in the process.
During his first television interview since announcing his planned departure as the Justice Department's third-highest ranking official on Sept. 15, West recalled his conversation with Dimon during a particularly rough patch before JPMorgan 's $13 billion settlement last November.
"I was on my way in to work, and we were going to announce a lawsuit against JPMorgan that morning," said West from a conference room in Justice's Washington headquarters late Tuesday. "My cell phone rang and it was Jamie Dimon."
Dimon, then trying to fend off government litigation to avoid a costly and embarrassing public row, argued that high-level negotiations were in order, West said. "He just said, 'Hey, listen, we've never met, but I think when the stakes are this high, it's always important for the principles to talk.'" Dimon's call ultimately led to a meeting with Attorney General Eric Holder and West, and a discussion that smoothed the path toward the final deal. (Dimon did not immediately respond to a request for comment.)
West, who oversaw the Justice Department's civil unit, among other duties, said he was proud of the office's accomplishments in landing record settlement agreements and bringing some closure to troubled American homeowners.
"What we've seen is not just a high dollar number," he said, but also "a measure of accountability." Steps that banks like JPMorgan, Citigroup , and Bank of America must take as part of their multibillion dollar mortgage-securities fraud settlements with Justice, including writing down mortgages, will help families whose mortgages exceed their market values to stay in their homes, he added. "Consumers are finally going to get a bit of relief from the pain of the financial crisis."
West acknowledged criticisms that the high dollar figures banks paid to put the mortgage-fraud issues behind them -- $13 billion in JPMorgan's case, $7 billion in Citi's and, most recently, close to $17 billion for Bank of America -- have, in some people's eyes, forced banks that acquired troubled competitors during the financial crisis to pay handsomely for what was ultimately a benefit to the sanctity of the banking system.
"Yes we are tough, but we really do strive to be fair," he said, noting that in the case of JPMorgan, for instance, the penalty levied didn't reflect on fraudulent mortgage-securities conduct that occurred at Bear Stearns, which it had rescued from collapse in March 2008, or Washington Mutual, which it bought later that year.
As to whether banks would shy away from such distressed deals in the future, he said, "at the end of the day, most folks are patriots and they know that a strong economy is something we all benefit from."
Although West hasn't yet revealed what his next professional step will be, someone familiar with the matter has said he will become an official at PepsiCo. , a move reported by Businessweek late Tuesday night.
During the interview earlier that evening, West declined to address any potential PepsiCo. job, saying only that he plans to spend the coming weeks vacationing with his wife in Spain and his daughter in the Galápagos Islands.
A PepsiCo. spokesman declined to comment.