Iran? Really?

Hearings scheduled for this week (2012.08.15) by the NY State Department of Financial Services will examine alleged money laundering on behalf of Iran by a British bank, Standard Chartered. They are accused of using their US Branch to clean up some 60,000 transactions totaling $250 billion, a quarter trillion dollars for Iranian customers.

The seriously damning evidence seems to come from Standard Chartered itself. Published reports have its CEO responsible for US operations warning that the Iranian deals could, “cause very serious or even catastrophic reputational damage to the group.” His bosses in London replied, “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”

But even that isn’t the worst of it. The bank is alleged to have a manual detailing how to automatically cover up the illegal transactions. They even devised a fancy code name for the scam, “Project Gazelle.” When sanctions were imposed during the Clinton administration, the bank is alleged to have set up a plan to dodge the restrictions and to have warned that this scheme must not be sent to the United States to prevent prosecution.

Standard Chartered has, of course, brushed off the charges out of hand, a course hard to understand when their own records show that they were well aware that what they were doing was illegal all the way back to the mid-nineties when the United States first imposed sanctions on Iran. That would seem to put the bank in the position of deliberately breaking the law. And it wasn’t just our sanctions on Iran. Standard Chartered is said to have routinely ignored sanctions on Libya, Myanmar, the Sudan and any others it could make a buck from. Reportedly the FBI has an ongoing investigation into this bank.  

Off shore banks with operations in the United States seem to feel that they can ignore our rules, and they can, just not while they are doing business here. In the last few years our laws regarding sanctions against doing business with Iran and other nations have snared a batch of these banks. Typically they walk with a fine that amounts to a slap on the wrist. That seems to have emboldened them to push the limits more and more until we are looking at wide ranging nasty stuff such as the alleged dealings with criminal organizations by HSBC.

It’s time to take the gloves off; to go after the folks running these banks. We need to treat them as the criminals they are. We need to kick these foreign banks out of the country if they don’t abide by our laws. The arrogant response of the Standard Chartered executives in London to their New York folks’ red flag, makes it clear that nothing is going to change over there. That’s reason enough to give them the boot. We have enough arrogant bankers in the United States, we don’t need to import any more from London.