The ongoing scandal involving J.P. Morgan’s hiring practices took a colorful turn on Friday with an explosive report from the Wall Street Journal.
The saga involves the alleged hiring of family members of high-powered foreign officials with the hope of gaining their business. It appears the practice is, or at least was, somewhat common throughout the industry, with J.P. Morgan gaining the most scrutiny. Some in banking have argued that you can’t penalize a firm for hiring children of people that they know, as long as they’re qualified. After all, that happens in any industry. It’s a piece of networking, one could argue.
Well, this one is different. Quite different. Gao Jue, who goes by Joe Gao, is the son of China’s current commerce minister. He was described by some managing directors at J.P. Morgan who interviewed him as “the worst BA candidate they had ever seen,” according to one J.P. Morgan recruiter. But the bank hired him anyway, and even spared laying him off after his father told a bank official that he would “go extra miles” for the firm if it kept him on, according to the Journal.
The story is long and complicated, and most certainly worth a read, but here are a few quick hits. There was a general consensus among senior people within his first group that Gao was “immature, irresponsible and unreliable.” Perhaps some of that could have been due to the fact that he inadvertently copied a human resources employee on an email that included inappropriate sexual comments. That’s a double whammy.
Another example could be that Gao allowed his work visa to expire soon after starting, forcing the bank to help him apply for an H-3 visa, which is meant for training purposes, not actual work, according to the report.
Still, when his position was eliminated due to the economic downturn, J.P. Morgan found Gao a six-month contract role with a new group under a manager whose own son had been laid off during the downsizing.
Eventually, Gao was let go when his contract expired. But a year later, J.P. Morgan appeared ready to make him another offer in Hong Kong, though he never responded to requests for an interview. He has made several stops since, including at BNP and Credit Suisse. He currently works at Goldman Sachs.
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Quote of the Day: “The father indicated to me repeatedly that he is willing to go extra miles to help JPM in whatever way we think he can. And I do have a few cases where I think we can leverage the father’s connection.” –Fang Fang, then chief executive of China investment banking for J.P. Morgan, in an email to his boss about keeping on the son of China’s commerce minister