The Joker was a former villain of the Justice Lords' universe.
Joker's history was presumably the same as his counterpart (the maniacal villain that's a dangerous and psychopathic "monster") until the Justice Lords decided to have a fascist-like hold on the world by appointing themselves rulers of their world. After the criminally insane were all lobotomized by Superman, the Joker was rendered almost entirely harmless and now a far cry from what he may have once been. As a result, he was put in charge of Arkham Asylum as its secretary.
When the Justice League, posing as their Justice Lords counterparts, came to Arkham, Joker was in an abnormally calm and polite state as he accepted their wishes to bring them to Hawkgirl. But at the last security checkpoint, Joker asked for a password that was required. J'onn J'onzz scanned his mind to reveal that the password was "apple sauce" and telepathically told it so Superman spoke it aloud. At this point, Joker revealed that whilst he was no longer as devious as he once was, he still wasn't to be easily fooled as he had known that Wonder Woman was supposed to be the one to speak the password. He then activated a group of Superman robots and fled the scene with Green Lantern mouthing him as a "weasel" whilst he did so.