In this spoof documentary, Bankwatch with Bill Oddie, the naturalist protests against HSBC's illegal logging by entering the den of a creature closely related to humans: the banker. HSBC has made nearly £100m bankrolling some of the world's most destructive logging companies in Sarawak Malaysia, and is at risk of violating international money laundering rules, according to NGO Global Witness.
Once again, Senator Elizabeth Warren asks the most obvious question -- why aren't banks prosecuted? -- only to get the same incredulous responses. What? Prosecute the banks? No way!
Warren took bank regulators to task on Thursday about the fact that British bank HSBC is still doing business in the U.S., with no criminal charges filed against it, despite confessing to what one regulator called "egregious" money laundering violations.
Money laundering was a major focus of U.S. counterterrorism policy after the Sept. 11, 2001, attacks. The Patriot Act of 2002 included provisions that required the Treasury Department to identify banks and individuals suspected of links to terrorism. And the law instructed banks to strictly monitor and report potentially illegal transactions.
"They did it over and over and over again across a period of years. And they were caught doing it, warned not to do it and kept right on doing it, and evidently making profits doing it," Warren said of HSBC. "How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?"
The regulator she was questioning, David Cohen, the Treasury Department's undersecretary for terrorism and financial intelligence, repeatedly refused to answer the question. Like other regulators at the hearing, he said that his department has no authority to shut down a bank unless the Justice Department convicts the bank of a crime.
Warren said: “If you’re caught with an ounce of cocaine, chances are good you’re going to go to jail. If it happens repeatedly, you may go to jail for the rest of your life. But evidentially, if you laundered nearly a billion dollars for drug cartels and violated our international sanctions, your company pays a fine and you go home and sleep in your own bed at night -- every single individual associated with this. And I just -- I think that’s fundamentally wrong.”
The issue is part of a broader debate over large financial institutions and whether they are too big to be broken up. The Massachusetts senator’s comments come after U.S. Attorney General Eric Holder acknowledged Wednesday that some of the largest banks are too big to prosecute and that prosecution could have a negative impact on the U.S. and global economies.
Speaking before a Senate Judiciary Committee hearing, Holder said he is concerned that the size of some of these institutions “becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.”
Holder added that “I think that is a function of the fact that some of these institutions have become too large.”
It is far past time for someone to "indicate" to Mr. Holder that he needs to prosecute the criminal banks, or someone will show him to the door.
Journalist Matt Taibbi assesses the Obama Administration’s approach to holding banks accountable for their behavior, and early indications are not promising. Taibbi tells Bill Moyers that fearing another economic calamity is no excuse for turning a blind eye to shockingly unethical decisions and management.
“The rule of law isn’t really the rule of law if it doesn’t apply equally to everybody. If you’re going to put somebody in jail for having a joint in his pocket, you can’t let higher ranking HSBC officials off for laundering $800 million for the worst drug dealers in the entire world,” Taibbi tells Bill. “Eventually it eats away at the very fabric of society.”
Watch Bill’s full conversation with Taibbi on this weekend’s Moyers & Company.
United States Senator Charles Grassley (R - Iowa) and Bloomberg Contributing Editor Neil Barofsky talk with Bloomberg Law's Lee Pacchia about HSBC's recent settlement with US authorities over claims the bank engaged in money laundering for drug cartels and terrorist organizations. Senator Grassley is the ranking Republican on the Senate Judiciary Committee.
In a letter to Attorney General Eric H. Holder Jr., Sen. Chuck Grassley of Iowa complained that the Justice Department -- in accepting a $1.92 billion settlement in a money-laundering probe by federal and state authorities in the United States -- had not prosecuted a single HSBC employee, “no executives, no directors, no AML [anti-money laundering] compliance staff members, no one.”
“Even more concerning is the fact that the individuals responsible for these failures are not being held accountable,” he wrote. “By allowing these individuals to walk away without any real punishment, the department is declaring that crime actually does pay. Functionally, HSBC has quite literally purchased a get-out-of-jail-free card for its employees for the price of $1.92 billion dollars.”
State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.
Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.
While the settlement with HSBC is a major victory for the government, the case raises questions about whether certain financial institutions, having grown so large and interconnected, are too big to indict. Four years after the failure of Lehman Brothers nearly toppled the financial system, regulators are still wary that a single institution could undermine the recovery of the industry and the economy.
Big bank. Money laundering. No criminal charges. No jail. Shocking. Not.
