Government lawyers are backing up the truck again at J.P. Morgan Chase to extract another haul from the country's largest bank. State and federal attorneys have burrowed close enough to J.P. Morgan's vault that the bank is considering a staggering $11 billion settlement related to mortgage-backed securities, including one of the largest fines ever against a single company.  Trying to keep an accurate tally of the government investigations of J.P. Morgan has become a full-time job. This week the New York Times counted investigations in at least seven federal agencies, while the Journal counted seven investigations in the Justice Department alone, plus inquiries at other agencies.  Keep in mind that this is one bank that did not need taxpayer assistance in 2008 or since. And this partly explains why Morgan CEO Jamie Dimon is the Obama Administration's favorite Wall Street target. Washington in this era prefers dependent banks that quietly accept their role as money pots to be raided when politics demands. Mr. Dimon keeps deviating from the Obama script.  First the CEO explained how the rhetoric about the Dodd-Frank financial reform wasn't matched by its costly and confusing regulations. Though a lifelong Democrat, he said publicly in 2012 that Washington's antibusiness rhetoric was a drag on confidence that hurt the recovery. He even hinted that he preferred a change in the White House.  Assistant editorial page editor James Freeman on J.P. Morgan’s possible $11 billion settlement to end regulatory probes. Photos: Associated Press  All of that gave the regulators motive to dislike Mr. Dimon, but their opportunity to punish him came when J.P. Morgan made serious errors in failing to oversee the "London Whale" trades. The trades cost shareholders $6 billion and were even costlier to the bank's reputation as a risk manager. Senior managers and traders were fired, Morgan directors did their own probe, and shareholders have stuck by Mr. Dimon.  But that wasn't enough for Democrats, who decided the trading blunders were the greatest financial scandal since Enron. Senator Carl Levin unleashed his investigators on the bank, though the trade losses had no public costs. But the politicians were furious because the problems came to light almost two years after the enactment of Dodd-Frank. This punctured the Beltway myth that the same regulators who had failed to foresee the last crisis now had the power to spot the next one.  And now the feds are making Morgan's shareholders pay for this embarrassment. Morgan investors recently had to pay another $920 million to settle U.S. and U.K. charges related to the Whale. The charges are that the bank failed to supervise its traders and had compliance deficiencies. Yet how did the government not know of the deficiencies when regulators all but live at the bank and J.P. Morgan may be the most regulated institution in the world? They never acted to stop those deficiencies until Morgan itself reported them.  Now each day seems to bring details of another government investigation—about mortgage underwriting, mortgage-backed securities, energy markets, credit cards, other Whale-related cases and more. Since 2008 J.P. Morgan has spent more than $18 billion on legal expenses.  The Journal recently reported that the bank planned to add 5,000 employees to its risk and compliance teams this year—bringing the total to 15,000 from 8,000 last year—and spend an additional $5 billion. This year J.P. Morgan has been holding 50 meetings per month between its senior executives and regulators.  The irony is that Mr. Dimon was the rare bank CEO who avoided the credit excesses that ruined so many competitors. Despite regulations that encouraged banks to gorge on mortgage securities, he stuck to a sensible diet. Even regulators viewed J.P. Morgan as such a bulwark of sound banking that they called on it to rescue failing firms like Bear Stearns.  Yet the current charges include alleged wrongdoing by Bear Stearns before regulators begged J.P. Morgan to rescue it, as well as alleged wrongdoing by Washington Mutual before regulators begged Morgan to buy that bank too. In the heat of the crisis in September 2008, few big banks were healthy enough to buy WaMu. Then-FDIC Chairman Sheila Bair said the situation "could have posed significant challenges without a ready buyer." Referring to J.P. Morgan's willingness to step forward, Ms. Bair said, "Some are coming to Washington for help, others are coming to Washington to help." Now Washington is suing Morgan for having helped.  Even more preposterous is that the alleged victims in the government suits are almost all large institutions, including Fannie Mae and Freddie Mac. The government portrays them as unwitting investors in mortgage securities when their own titanic mortgage bets triggered a $188 billion taxpayer bailout.  Who would have guessed that five years later the great villain of the mortgage crisis would be the guy who not only didn't create it but helped to end it? Meanwhile, in 2008 Jack Lew helped to oversee a disaster at Citigroup that would require serial taxpayer bailouts from Treasury and the Federal Reserve. Mr. Lew escaped New York for the Obama Administration and five years later he runs the Treasury.  Mr. Dimon's worst sin in Washington's eyes may be that J.P. Morgan earned record profits last year despite the Whale losses. Investors continue to express their view that—political assaults aside—the underlying enterprise is healthy. In July Morgan stock hit its highest point in more than a decade. The shares have since declined but still trade above their level prior to the Whale news in 2012.  All of this is a lesson about the politicized world of finance after Dodd-Frank. Mistakes such as the Whale trades ought to be a matter settled among shareholders, directors and management. But politicians and regulators now believe that the big banks all work for them. Washington is looting J.P. Morgan, and may yet string up Jamie Dimon, as a lesson in what will happen to any banker who dares to disagree with his Washington bosses.  A version of this article appeared September 27, 2013, on page A18 in the U.S. edition of The Wall Street Journal, with the headline: Robbery at J.P. Morgan.
The Wall Street Journal writes that Team Obama tries to destroy Jamie Dimon for not toeing their line.