World News

JPMorgan Secretly Hired Daughter of Wen Jiabao: Report

The New York Times is reporting U.S.-based JPMorgan Chase secretly employed the daughter of Wen Jiabao, who until recently was China's prime minister and main overseer of the world's second largest economy.

The Thursday report comes as the U.S. government investigates whether the bank hired the children of powerful Chinese officials to help win lucrative business deals with the country's state-owned companies.

The Times says JPMorgan paid $1.8 million from 2006 to 2008 to a little-known, two-person business that was run by the then-prime minister's daughter, Wen Ruchun, who went by the alias "Lily Chang."

The report says the bank's Hong Kong executives were aware of her true identity and appear to have benefited from her many connections.

Officials with JPMorgan declined to comment. The Chinese and U.S. governments have also not reacted to the report, which was based on a review of confidential documents, Chinese public records and interviews with officials.



It has been known for years that multinational corporations regularly hire China's "princelings," the children of Communist Party officials, who can provide unique business opportunities and information.

But the practice has only recently come under more intense scrutiny as news leaked of the U.S. Securities and Exchange Commission's investigation into JPMorgan.

In August, the Times reported the government probe centered on the bank's decision to hire the son of a former Chinese banking regulator and the daughter of a Chinese railway official.

The paper says it has not been able to definitively link JPMorgan's hiring practices to its ability to win business, nor did it suggest the employees were unqualified.

Wen Ruchun appears to have had particularly useful credentials. After graduating from the University of Delaware with a M.B.A., the Times says she went on to work at multiple well-known banks, including the now-collapsed Lehman Brothers global investment company.

Using her government-approved alias, the report said Wen also ran the Beijing-based Fullmark Consultants company, which appears to have only employed one other person - a longtime friend of the Wen family.

An internal Fullmark document obtained by the Times said the consultancy group's main goals included helping JPMorgan secure business from a state-run railway group and giving advice on the "macroeconomics policy in mainland China."

Wen's father, Wen Jiabao, stepped down earlier this year following 10 years as premier, a position that put him directly in charge of managing China's economy.

JPMorgan has said it is cooperating fully with the U.S. government investigation.

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