The documents were filed by WaMu’s failed holding company in U.S. Bankruptcy Court in Delaware. The company is now seeking to expand the subpoena to include documents from regulators, government agencies, rating agencies, and others with potential knowledge of the events. Regulators have declined the Business Journal’s public-records requests seeking those documents or have released documents that are largely blacked out. They also have declined repeated requests to comment.

Throughout this period, WaMu was in serious, but not critical, condition. In the first half of 2008, it reported it had lost about $4.5 billion, a staggering sum. That loss was due mainly to money it had set aside to cover potentially bad mortgage loans. Despite the loss, its capital level stood $7 billion in excess of what regulators required. On the day it was seized, WaMu also had $29 billion in additional, ready cash to pay out to depositors if needed. It also had access to another $8.2 billion in cash from the Federal Reserve, a line of credit it had not tapped. Numerous other banks nationwide currently are operating with proportionally less capital and cash than WaMu had on the day it was closed.

Even so, under pressure from federal regulators, WaMu executives jetted to the East Coast frequently in September seeking additional capital and a buyer for the bank through an auction to be arranged by Goldman Sachs.

Had executives succeeded in securing either deal, they would have prevented the collapse in WaMu’s stock and bond prices that resulted from the government sale, and that cost investors billions of dollars.

They never got the chance. In what became known as the biggest bank failure in U.S. history, the regulators seized and sold WaMu five days before the September 30 deadline, and six days before Congress passed the Troubled Asset Relief Program to provide bailout money to banks, including WaMu.

Many investors still are grappling with their losses—life savings, retirement accounts, college funds, pension money.

One Seattle family mourns a deeper loss, that of a WaMu executive, a husband and father, who recently took his own life after losing his job at the bank.

Unusual Process

In a typical bank closure, the Federal Deposit Insurance Corp., in charge of putting failed banks up for sale, is supposed to remain impartial until it is evaluating bids. At that point, the agency chooses the bid that represents the least cost to the deposit insurance fund, a pool of money it manages to insure bank customers. The bank’s main regulator—in WaMu’s case, the federal Office of Thrift Supervision—isn’t involved in the process of selling the bank at all.

In WaMu’s sale, however, government officials on at least two occasions over several months appeared supportive of JPMorgan’s efforts to buy the bank, according to people familiar with the matter.

In March 2008, the head of the OTS warned WaMu executives to take seriously JPMorgan’s offer to buy WaMu for about $8 billion. WaMu spurned that offer, saying it wanted to remain independent.

In July, Treasury Secretary Hank Paulson admonished WaMu executives for turning down JPMorgan, according to people familiar with the discussions.

Much of the detail about JPMorgan’s activities during this crucial period remains unknown. But recently, JPMorgan was forced to release a number of emails and internal documents about its activities in response to the subpoena filed in June by the bankrupt holding company for WaMu.

The documents support a separate lawsuit filed by WaMu bondholders in early 2009, alleging that JPMorgan used confidential information it obtained about WaMu to negotiate a better deal with government regulators, influence regulators to seize WaMu prematurely, and leak information to the media in the weeks before its September closure, causing its bank run.

Dimon, in an interview with reporters in Seattle during the summer of 2009, dismissed the allegations in the bondholders’ lawsuit as “conspiracy theories” and called the allegation that JPMorgan was abusing access to confidential information a “pathetic and ridiculous statement.”

With his commanding presence, the silver-haired, blue-eyed CEO seemed gracious but also easily provoked at the meeting.

“There are tons of lawsuits,” he told reporters, “and we’re going to defeat them all.”

A Stunning Deal

In purchasing Washington Mutual out of government receivership, JPMorgan pulled off one of the biggest banking coups in history. It acquired, by the government’s reckoning, $307 billion in assets and paid just $1.88 billion for them. The assets included 2,239 WaMu branch offices, two Seattle office towers, $24 billion in salable securities, and about $118.9 billion in loans, which count as assets because they are due to be paid back to the bank. JPMorgan also acquired deposits worth $188 billion. Although deposits count as liabilities, since they must be paid back to customers, they also measure a financial institution’s standing among its peers and its market share.