Democratic and Republican Agreement: Prosecute HSBC
Apparently, Matt Taibbi and Glenn Greenwald and Matt Stoller and Howie Klein and I aren’t the only hippies who believe HSBC should be treated like any other legal person who helped drug gangs and terrorists launder money.
Both Chuck Grassley and Jeff Merkley have written Eric Holder letters complaining about this treatment.
Here’s Grassley (who, as he notes elsewhere in the letter, is the Ranking Member on the Senate Judiciary Committee and has demanded a briefing):
I write today to express my continuing disappointment with the enforcement policies of the Department of Justice (Department). On December 12, 2012, the Department entered into a Deferred Prosecution Agreement (DPA) with HSBC, a global bank that has now admitted to violating federal laws designed to prevent drug lords and terrorists from laundering money in the United States. While the Department has publicly congratulated itself for this settlement, the truth is that the Department has refused to prosecute any individual employees or the bank responsible for these crimes. This troubling lack of real enforcement will have consequences for the health of our economy and the safety and prosperity of the American people.
[snip]
In spite of this egregious criminal conduct, the DPA fails in finding the proper punishment for the bank or its employees. Under its terms, the DPA obligates HSBC to pay $1.92 billion to the federal government, improve its internal AML controls, and submit to the oversight of an outside monitor for five years. Despite the fact that this is a “record” settlement, for a bank as gigantic as HSBC this is hardly even a slap on the wrist. It only amounts to between 9 and 11% of HBSC’s profits last year alone, and is a bare fraction of the sums left unmonitored.
[snip]
Even more concerning is the fact that the individuals responsible for these failures are not being held accountable. The Department has not prosecuted a single employee of HSBC—no executives, no directors, no AML compliance staff members, no one. 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.
[snip]
Past settlements with large banks prove that they do nothing to change what appears to be a culture of noncompliance for some businesses.According to the U.S. Sentencing Commission, jail time is served by over 96 percent of persons that plead or are found guilty of drug trafficking, 80 percent of those that plead or are found guilty of money laundering, and 63 percent of those caught in possession of drugs.[6] As the deferred prosecution agreement appears now to be the corporate equivalent of acknowledging guilt, the best way for a guilty party to avoid jail time may be to ensure that the party is or is employed by a globally significant bank In March 2010, the Department arranged a then-record $160 million deferred prosecution agreement with Wachovia based on its laundering of more than $110 million from Colombian and Mexican drug cartels. Officials at the time stated that “blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations.” In this case, a bank escaped with a record monetary settlement and a conspicuous absence of individuals behind bars. If the story sounds eerily similar, that’s because it is. It happened again with HSBC. [my emphasis]
And here’s Merkley (who is on the Senate Banking Committee):
I do not take a position on the merits of this or any other individual case, but I am deeply concerned that four years after the financial crisis, the Department appears to have firmly set the precedent that no bank, bank employee, or bank executive can be prosecuted even for serious criminal actions if that bank is a large, systemically important financial institution. This “too big to jail” approach to law enforcement, which deeply offends the public’s sense of justice, effectively vitiates the law as written by Congress. Had Congress wished to declare that violations of money laundering, terrorist financing, fraud, and a number of other illicit financial actions would only constitute civil violations, it could have done so. It did not.
[snip]
According to the U.S. Sentencing Commission, jail time is served by over 96 percent of persons that plead or are found guilty of drug trafficking, 80 percent of those that plead or are found guilty of money laundering, and 63 percent of those caught in possession of drugs.[6] As the deferred prosecution agreement appears now to be the corporate equivalent of acknowledging guilt, the best way for a guilty party to avoid jail time may be to ensure that the party is or is employed by a globally significant bank. [my emphasis]
Note, unlike Lanny Breuer, both Senators mention terrorism (though Merkley seems unaware how serious HSBC’s ties to Islamic terrorist financing are).
More importantly, they sound like the rest of us dirty hippies, making the audacious argument that banks ought to be subject to laws.
One wonders what it will take for Obama-Holder to get the message?
DW
Holder never met a case he and his couldn’t walk away from. After Chuckles and Merkley go away with their Senatorial eog stroked, this too shall pass. No hit no run no error.
Any chance that HSBC being a foreign-owned bank makes it much easier to be a righteous Senator?
@seedeevee: Ya those are impressive words from Grassley and Merkley, but similar statements could have been made and stands taken long before now.
The Taibbi piece is just brilliant, btw…
should be easier now that justice roberts has assured us that corps are persons with free-speech rights, no?
hsbc – free to be in jail
@Arbusto: Yep, nothing to see here right after both get some campaign cash from said bank.
When my kids were growing up I used to tell them that if they ever thought about robbing a bank, they should rob BIG and not use a gun. That seems to be true. Too big to prosecute?
Grassley
sounds eerily similar to Yves Smith’s first of her top twelve reasons the mortgage settlement deal stinks:
And actually, that $2000 per loan, didn’t all or most of it get gobbled up by the states for other purposes? It’s just the government and the criminals with their hands in each other’s pockets. Friendly like. Junkie like.
@FFein: Bill Black wrote the book: “The Best Way to Rob a Bank is to Own One.”
@thatvisionthing: Even better!!
@DWBartoo:
Everyone in Congress telling them it’s time to end ‘Too Big To Fail’ and ‘Too Big To Prosecute’, plus Geithner and Bernanke signing on?
OT. Emptywheel, I thought you might like to know about this rival scatological entry. On the local PBS news program there was a discussion about whether local congressman Raul Grijalva might accept a rumored offer for the Interior Dept. The juicy part came when a Republican strategist referred to the notion as a “wet dream” for environmentalists. It was said with a straight face, and apparently there was no immediate reaction from the roundtable participants.
@FFein:
Clay Bennett editorial cartoon
http://www.claybennett.com/images/archivetoons/amateur.jpg
OT: was there any development today on the Electronic Frontier Foundation’s case Jewel v. NSA?
from EFF website not much except this blurb
https://www.eff.org/cases/jewel
“The court instead ruled that the case should be dismissed on standing grounds. Fortunately, in December of 2011, the 9th U.S. Circuit Court of Appeals ruled that Jewel could proceed in district court. In July, 2012, EFF moved to have the court declare that the FISA law applies instead of the state secrets privilege; in September, 2012 the government renewed its “state secrets” claims and the matter was heard by the federal district court in San Francisco on December 14, 2012.”
I know that the Al-Haramain case was recently dealt a blow. Can the Jewel v. NSA case claw back some freedoms for US citizens?
@JohnT: Thank you! Made me chuckle outloud. I think cartoonists are such great communicators — a picture and just a couple words can convey really complex issues.
@rg:
The GOP is really eager for certain D congresspeople to get appointments elsewhere in government. That says to me that it’s a really bad idea for said D congresspeople to do any such thing.
I know it is simplistic but it appears that Holder/Obama have accepted 10% of HSBC profits, from illegal money laundering for drug cartels and terrorists, as their cut for doing fuck all.
One might even call it ‘protection money’.
@P J Evans: What about too — was going to use the word “busted,” but criminal rich tbtf can’t be busted — ok, “guilty,” even when that word is nullfied but yeah we know that’s what it is — too guilty to contribute politically? Maybe just “anyone in a deferred prosecution agreement”? Their money flow is their WMD, excuse me speech, so take them out of the room and put them in a free speech pen? Dam them.
I mean, felons can’t vote or run for office in many cases, yes? All these banks and officers are felons. I include the DOJ and AGs, because they’re in the revolving door/material support loop. Ex-AGs go on to be the corporate monitors who monitor the deferred prosecution agreements, yes? Mukasey, Gonzalez, Ashcroft all went on to become corporate monitors?
Hey! Who’s the corporate monitor here? Has he been named? And what’s his fee?
The DOJ isn’t going to be any help here. But if Congress is serious? Wait, where did deferred prosecution agreements come from in the first place? They’re not in the Constitution. Congress?
@thatvisionthing: What IS in the Constitution is “jury” — so how is this constitutional if it never goes to a jury? Senator Grassley, Senator Merkley, I’m looking at you. ?
Marcy has been writing about DOJ/ex-AG corporate monitor crap since at least 2008 — here she is quoting from Matt Friedman/PolitickerNJ:
Man, what could possibly go wrong?
Emptywheel:
I clicked.
@thatvisionthing:
Hey, are Grassley and Merkley or anyone in Congress scheduling hearings on the DOJ-HSBC material support terrorism loop? Should say, additional hearings, since Carl Levin’s Permanent Subcommittee on Investigations has already reported (53 pages of a 340 page report) on HSBC’s role in material support of terrorism. Will Levin now add the DOJ to his investigations?
@Greg Bean (@GregLBean): Right, see comment thread in Marcy’s post from 2010: Bhopal Justice, Sort Of. A lot of gray text, but the questions and issues may be worthwhile wading to revisit. I put one line in bold because I think that’s what it all boils down to.
I said:
and bmaz replied with this distinction:
I asked bmaz a lot more questions then, but comments closed without an answer. They all seem potentially relevant here. More links in original than here:
And finally, from looking at the Alaska sentencing order:
OT, sort of:
Rmoney’s campaign is billing the media for the food and so forth provided by the campaign. More accurately, because they ran the campaign incompetently, they’re overbilling the media. Seven or eight hundred dollars for a meal. Reports are that the meals were generally far more food than was even wanted, because the groups in Rmoney’s campaign organization weren’t talking to each other enough.
Thinking more. If Merkley or Grassley or Levin — anyone in Congress, really — is serious about laws being laws, then unless they clean up the DOJ and put an end to deferred prosecution agreements and nonprosecution agreements, every law they write is just feeding the junkie. And in this case the laws they give the DOJ to “enforce” are being used as material support for terrorism, which I think by the transitive property of material support makes Congress terrorists too, right? (Congress-DOJ-HSBC-AlQaeda)
Congress isn’t doing oversight, isn’t an innocent bystander — it’s in the loop.
@thatvisionthing: And the crazy thing is after Dems beat up Christie for DPAs, Holder’s DOJ has done far far more, and for far more egregious crimes.
I don’t know what Lanny Breuer is doing after he leaves govt. But I do know he will be enormously wealthy.
@thatvisionthing: Levin actually issued a fairly pathetic release on the HSBC settlement:
@emptywheel: Right, I was just coming back to post this, it’s the same thing, Masaccio linked to it on FDL:
So scratch Levin (or maybe say he is scratched, backwise? Does he get HSBC support?).
Pathetic is right.
Al Jazeera (!) interviews Jeffrey Robinson, author of The Laundrymen. Raises interesting question about grand jury. Also pain by Bruce:
@emptywheel: re tbtf and Levin’s “powerful wakeup call to multinational banks” — On Democracy Now, Matt Taibbi pointed out how it’s actually destructive of global finance:
Don’t know if Levin watches Democracy Now.
Also, about the fine, again eerily similar @8…
In this case, HSBC is a British bank, or do you say British multinational bank? Do they have a custom-made box that fits the Fed window like all our TBTFs?
@emptywheel:
I was thinking of the DC judge and his band name, made me laugh — Deaf Dog and the Indictments — I was thinking it could be Holder and the Laundrymen. But Lanny and the Laundrymen sounds better. Sounds perfect.