Someone at JPMC Needs a Reminder

Written by Annie Sartor

Topics: Coal, Finance

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Over the past few weeks, several RAN members and activists have forwarded me emails received from James Fuschetti, Managing Director of the Office of Environmental Affairs at JPMC. In his emails to RAN activists, Fuchetti claims that JPMorgan’s “financing in this industry [coal and mtr] are quite small,” and disputes JPMorgan Chase’s relationship with Massey Energy – the largest mountaintop removal mining company in the United States.

These emails from Mr. Fuschetti are quite alarming because after several meetings with campaign staff at RAN and many letters clearly outlining RAN’s concerns, he still seems to be confused as to why we are demanding that JPMorgan Chase stop investing in coal and MTR.

Here are a few reminders:

1) Arch Coal. Arch has been operating the largest mountaintop-removal (MTR) coal mine (Spruce Mine) in Appalachia. In March 2009, Chase amended and renewed its $700 million credit facility with Arch Coal. In October 2009, the EPA revoked the Spruce Mine permit out of concern that the mine was in violation of the Clean Water Act. We documented this in a letter to Jamie Dimon on October 29th.

2) Massey Energy. One of the most notorious and aggressive mountaintop removal mining companies, Massey is known to operate with a regular disregard for environmental and labor standards and has been fined for thousands of violations of the Clean Water Act. RAN called Chase’s problematic financing of Massey Energy to Jamie Dimon’s attention during the 2009 shareholder meeting. Both Wells Fargo and Bank of America have already dropped Massey as a client following senior management and Board review. In August 2008, Chase underwrote $850 million in common stock and senior notes for Massey Energy.

3) AMP-Ohio. At the 2009 Chase AGM a representative from Ohio Citizen Action spoke to Jamie Dimon about Chase’s financing support for AMP-Ohio’s proposed new coal plant on the Ohio River. Despite Chase’s role in developing the Carbon Principles, which purport to bring more rigorous due diligence to financing of new coal plants, AMP received a $450 million line of credit from Chase in September 2009 with explicit authorization to use the funds for AMP’s hotly-contested pulverized coal-fired power plant in Meigs County, Ohio. In December 2009, the planned AMP-Ohio coal plant was scrapped.

4) Alliant Energy. Chase violated the Carbon Principles in providing financing for Alliant Energy with a known use of proceeds to support two new coal-fired power plants in Wisconsin and Iowa. As with the AMP-Ohio plant, there was rigorous opposition to these plants that included critiques in the public record of the financial risks and the availability of cheaper, cleaner alternatives. In March 2009, civil society concerns were validated when both coal plants were canceled. The public utilities commissions severely criticized the financial risk analysis of those plants, leading to the question of what good Chase’s “enhanced due diligence” did in this case.

I hope this information helps to refresh Mr. Fuschetti’s memory – its high time for JPMorgan Chase to take responsibility for their investments and pull out of financing the coal industry!

-Annie

11 Comments For This Post I'd Love to Hear Yours!

  1. James Fuschetti says:

    Annie:
    You should be ashamed of yourself! Surely you have some obligation to the members of your organization to be truthfull. There is not one of the four bullet points you make above that does not contain some misrepresentation. While RAN is a campaigning organization, I assume it has some obligation to its supporters to report the truth. Am I wrong. Can you substantiate anything you say in the blog? I think not and you know it. Your supporters will eventually figure this out as your effectiveness is proven to be low and your naivete high because you are focused on attacking the wrong targets. Do you have the courage to publish this comment. Let’s see.

  2. Annie says:

    Mr. Fuschetti,

    I have to say I’m surprised to see you here on RAN’s blog! Welcome! I wish that we were able to have this conversation in a more productive forum, however. The Global Finance Team has been trying for months to discuss our concerns about JPMC’s financing of coal and mtr with you and your team, only to be stonewalled and ignored. As for the above examples of JPMC financing, I stand behind its accuracy completely. All of our financial research is from our Bloomberg terminal – a very reliable tool, in our view. Are you disputing JPMC’s relationships with the above coal companies? I would love to take this conversation off-line and discuss further. Please call our office anytime to speak with me or my GFC colleagues.

    -Annie

  3. James Fuschetti says:

    Annie:

    I have never heard from RAN’s Global Finance Team. Are you certain you have my correct contact details?

    I am happy to have this conversation on this blog. I doubt many people read it but I have nothing to hide from your supporters.

    Let’s examine the first of your various statements from above.

    1. Arch has been operating the largest mountaintop-removal (MTR) coal mine (Spruce Mine) in Appalachia. I do not know which Spruce Mine you are referring to but Arch’s Spruce Mine is in pre-operation phase and hardly produces any coal at all, compliments of various lawsuits by environmental NGOs. Spruce Mine is not even close to being a large coal producer. Where did you get your info? Provide the source and the production numbers if you can.

    In March 2009, Chase amended and renewed its $700 million credit facility with Arch Coal. It is true we amended an existing credit agreement (to allow the company to make an acquisition) along with a dozen other participating banks. Surely you know JPMC’s share of the total facility was less 10% of the total credit. Does GFT know who the other banks were and their shares? Its public record. By the way, less than 5% of Arch’s coal production comes from MTR.

    In October 2009, the EPA revoked the Spruce Mine permit out of concern that the mine was in violation of the Clean Water Act. We documented this in a letter to Jamie Dimon on October 29th. The reason the EPA asked the Corps of Engineers to revoke the previously approved permit was that the EPA was concerned the downstream impacts of the minesite had not been properly considered. The EPA is still examining the issue and negotiating with Arch and may even eventually withdraw its objection to the permit. I believe you misunderstood what the EPA said and did in this instance. As reported above, the Spruce Mine is tiny.

    More misrepresentations exposed tomorrow.

    Congratulations for having the courage to publish my comments.

  4. Amanda says:

    The Spruce No 1 Mine could hardly be considered tiny.

    It has been proposed as a 3,113-acre mine that would bury more than 10 miles of streams

    For fuller information, read this well-referenced piece by Ken Ward:
    http://3.ly/SpruceMine

  5. Annie says:

    Mr. Fuschetti,

    To clarify, when you met with RAN representatives at JPMC’s shareholder meeting last May, you were meeting with RAN’s Global Finance Campaign team. I apologize for the insider language, but GFC is the name we use for those of us who work to put pressure on banks to stop financing environmental destruction and climate change.

    I wish that communication between RAN and JPMC were more open, and I’m frankly shocked that this very informal blog is where you choose to dialogue with us.

    As for Arch Coal, you agree that Chase entered into an amendment of the $700 million credit facility less than a year ago. And if you take a look at this article in the Charleston Gazette, you’ll see that the Spruce Mine is the “largest mountaintop removal permit in West Virginia history” and that regulators withdrew the permit because of environmental concerns.

    http://www.wvgazette.com/News/MiningtheMountains/200807070391

    I can’t see any “misrepresentations” from my original post regarding Arch Coal. I do, however, look forward to reading your next post that will expose more misrepresentations later today.

    -Annie

  6. Linkesh says:

    Dear Annie and Mr Fuschetti,
    I’m from India. Many of my friends follow this blog. I have to say that thousands of people read this blog and it’s RSS feeds.

    I’m glad that this little bit of dialogue has happened, but where is the rest?  Mr Fuschetti, we are waiting for the remainder of this.

    Thank you,
    Avid readers from half way around the planet.

    PS. We stand with RAN, and with the brave people who dare to risk everything for stopping this wanton destruction called Mountain Top Removal. Mountains are sacred, our Earth is sacred. We must hold our Earth in TRUST for the future, not degrade it as we are today.

  7. David McKay says:

    “Dialogue must be understood as something taking part in the very historical nature of human beings. It is part of our historical progress in becoming human beings” (Friere, Paulo p.98, A Pedagogy for Liberation).

    Keep up the conversation!

    And stop removing the tops of mountains — there are only so many.

  8. friend says:

    Odds of Mr. Fuschetti finishing this dialog in an open and honest manner? I’d say 1 in a 1000. But, then again, what do we expect from an employee of one of the least trustworthy institutions on Earth with the job of defending the funding of MTR and coal? Of course, the easiest way for him to prove his point, if he’s so interested in open debate, would be to publish the terms of the loan and credit agreements between JPMC and any coal companies it finances. We could all then see exactly what the connections are between the coal industry and JPMC. So, Mr. Fuschetti, i skeptically await your response.

  9. William says:

    Tick tock Mr. Fuschetti, Jan 21st (tomorrow) was two weeks ago now and you have 3 more points to defend against, or at least attempt to.

  10. Arch Coal. Arch has been operating the largest mountaintop-removal (MTR) coal mine (Spruce Mine) in Appalachia. In March 2009, Chase amended and renewed its $700 million credit facility with Arch Coal. In October 2009, the EPA revoked the Spruce Mine permit out of concern that the mine was in violation of the Clean Water Act. We documented this in a letter to Jamie Dimon on October 29th.

  11. These people are doing a tree sit in the freezing cold West Virginia mountains and befuddling the largest mountaintop removal coal company in Appalachia. Word.www.handbags-club.com

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