Former Bank Exec: Bank Lobby Tried To Block Fair Housing Act Deal

Wayne Trotman, a former JP Morgan Chase executive, filed a lawsuit Monday saying he was fired for not preventing a settlement that stopped a major fair housing case from coming before the Supreme Court.

A former senior JP Morgan Chase & Co. executive claimed Monday that he was fired for refusing to scuttle a legal settlement that may have prevented a landmark civil rights law from being weakened.

Two years ago the Supreme Court was poised to hear Mt. Holly Citizens in Action Inc. v. Township of Mt. Holly, a major case involving the 1968 Fair Housing Act, which bans discrimination in housing. At issue was whether the law bars policies that disproportionately harm minorities even if not explicitly intended to do so.

Under the Obama administration, the Justice Department has secured record settlements with financial institutions it has accused of practices that disproportionately harm people of color. Financial institutions have long opposed the use of disparate impact, arguing that it fosters baseless charges racism where none exists. Financial industry groups have also long supported legal challenges to the use of disparate impact, and the Supreme Court is slated to rule on one such challenge this term. Text of emails submitted as part of Trotman's lawsuit provide new insight into just how driven financial institutions were to ensure that the high court ruled on the matter.

The Mt. Holly case was settled in 2013, shortly before the Supreme Court was scheduled to hear it. The case involved a group of New Jersey residents who had sued their town for discrimination after it had bulldozed most of their neighborhood for a redevelopment project that would leave them unable to afford to continue living there. Under the terms of the settlement, the residents were either given new homes or paid for their old ones.

Trotman's lawsuit, filed in the Philadelphia Court of Common Pleas in Pennsylvania, alleges that banking executives were so desperate to keep the case on the court's docket that at the 11th hour they pressured the then-executive to block the settlement, and terminated him after he refused to do so.

Erich Timmerman, a spokesperson for JP Morgan Chase & Co., told BuzzFeed News that "Mr. Trotman's claims are baseless and we fully intend to fight this in court."

At the time, Trotman also sat on the board of the The Reinvestment Fund, the housing non-profit involved in the settlement. According to the lawsuit, Tim Pawlenty, the former Republican governor of Minnesota and now the president and CEO of the Financial Services Roundtable, a financial industry lobbying group, emailed the chief executive officers of JP Morgan Chase & Co., M&T Bank, Citizen's Financial Group, and PNC Financial Services Group, asking them to do what they could to delay the settlement. Pawlenty notes in the email that "it appears a member of your team is on TRF's board or loan committee."

According to the lawsuit, Trotman's name was included in a list of "team members" attached to the email. The lawsuit also cites a later email where Pawlenty expresses concern that if the case is delayed, the makeup of the Supreme Court could change and no longer be likely to rule in the banks' favor. Five of the nine justices on the high court were appointed by Republican presidents and have been skeptical of government efforts aimed at combatting certain forms of racial discrimination.

Trotman claims that after refusing to use his position on the TRF board of directors to block the settlement, he subsequently received poor evaluations from his superiors at JP Morgan and was later terminated in violation of "clearly articulated public policy of the Commonwealth of Pennsylvania." The lawsuit also argues that his termination violated the New Jersey Conscientious Employee Protection Act. Trottman is also suing for defamation, alleging that he was slandered by JP Morgan Chase & Co. for stating publicly that his firing was due to poor performance, rather than what he says was his refusal to stop the Mount Holly settlement.

The Supreme Court is set to rule in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., another case challenging disparate impact, sometime this year. It is the third such case since 2008 to make it to the Supreme Court's docket, and the only one that was not ultimately settled.

Here is the full text of the lawsuit.

Greenblatt Pierce Engle Funt & Flores / Via
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