JPMorgan Chase CEO Jamie Dimon faces the Senate Banking Committee in a two-hour hearing scheduled for 10am ET today. He’ll be the only witness. Keep in mind that Dimon’s JPMorgan Chase has given millions to top-ranking members of the Banking Committee, so anything more than headline-grabbing and grandstanding without a real challenge to Dimon in the wake of the Fail Whale trades would be a bit of a surprise. But for what it’s worth, Dimon released his own written testimony a day early, to try and set the narrative.

Dimon starts out by saying that the Chief Investment Office, where the Fail Whale trades were made, invests “excess cash” totaling around $350 billion in a variety of securities. This is problematic in and of itself. The bank has about 50% more deposits than they do loans, at a time when entrepreneurs have trouble securing loans. Stable loans require a steady customer relationship and due diligence, in a way that handing over money to the CIO to play with does not. So the risk in the system grows, at the expense of more lending.

Dimon continues, saying that the problem came in the “synthetic credit portfolio” of the CIO, the part designed to hedge risks. But the Fail Whale trades look nothing like a hedge, and no rational person believes that the highly speculative bets Bruno Iskil was making add up to hedging in any way. Dimon generally acknowledges this next:

In December 2011, as part of a firmwide effort in anticipation of new Basel capital requirements, we instructed CIO to reduce risk-weighted assets and associated risk. To achieve this in the synthetic credit portfolio, the CIO could have simply reduced its existing positions; instead, starting in mid-January, it embarked on a complex strategy that entailed adding positions that it believed would offset the existing ones. This strategy, however, ended up creating a portfolio that was larger and ultimately resulted in even more complex and hard-to-manage risks.

This portfolio morphed into something that, rather than protect the Firm, created new and potentially larger risks. As a result, we have let a lot of people down, and we are sorry for it.

Dimon says that the traders didn’t understand the risks they took, that the analysis of the trades was shoddy, that oversight didn’t happen (this is chalked up to bad risk control functions and key personnel being absent or in transition at the time), and importantly, that “the risk limits for the synthetic credit portfolio should have been specific to the portfolio and much more granular, i.e., only allowing lower limits on each specific risk being taken.”

This is precisely what Jeff Merkley and Carl Levin have been saying all along about the Fail Whale trades, that they weren’t position-based hedges and as such far more dangerous. Dimon argued for this type of portfolio hedges to be allowed under the Volcker rule; it took up 5 pages of the initial 67-page letter on the rule JPM sent to regulators. But here, in Congressional testimony, Dimon says almost the opposite. That’s $9 million in direct lobbying from 2011 to 2012 down the tubes.

Dimon adds that steps have been taken, with new executives throughout the CIO, and new risk committees, models and standards that will “reduce the probability and magnitude of future losses.” There’s also an ongoing review of the Fail Whale trades, overseen by the Board of Directors.

But Dimon clearly tries at the end to mitigate the incident, calling it an “isolated event” and stressing that no taxpayer money was impacted. He says they still have high capital ratios even after the trades (and certainly selling off billions in securities and canceling a huge share buyback will tend to do that), and that they will remain profitable in the second quarter (see above). This is an endorsement for capital requirements, but it doesn’t explain why this level of risk should ever be borne by any firm.

Dimon throws in that his company hired 4,000 veterans over the past two years. Camo-washing is alive and well.

One thing Dimon does not address is his position on the board of the New York Fed, the subject of a petition with 36,000 names, and something which Elizabeth Warren again went after yesterday. He doesn’t address the revelations dug out by Sen. Bernie Sanders, further revealing inherent conflicts of interest at the Federal Reserve. Dimon is but one of 18 board members of the Fed regional banks whose companies received financial assistance from the central bank. And Dimon doesn’t come close to touching the wonky set of inquiries put forward by the group Occupy the SEC. Here’s my favorite:

Sarbanes-Oxley (SOX)

In light of JP Morgan’s $3+ billion dollar trading losses, Occupy the SEC and OWS Alternative Banking steadfastly believe that there is a Sarbanes-Oxley case to be made against Dimon. That law basically says that CEOs cannot lie about the internal controls of their companies. Dimon has made it clear that he knew or should have known the risks involved in the derivative transactions that the CIO office’s so-called “London Whale” was engaging in.

Suggested Questions: Mr. Dimon, how much did you know about JPM’s risk controls as they related to the CIO’s activities? What reports did you receive on the CIO’s positions and how often did you receive them? Did they show deteriorating values? If so, why were you surprised by the loss? If not, why not? How quickly did the positions reach the reported $2 billion mark-to-market value?

It’s been reported that Dimon, who personally approved the trades, was told early on about the losses and made no disclosure to shareholders. In fact, he called the trades a tempest in a teapot. That inaction could easily become an SEC case, including one against Dimon himself.

Peter Eavis has some more questions. And so do the members of the committee, who will actually get to ask them. I asked Jeff Merkley at Netroots Nation what he would go through, and he pointed me to his questioning of the OCC’s Thomas Curry. “I’ll be asking similar questions,” Merkley said. “This isn’t rocket science. Hedge funds don’t belong inside banks.”