Published in CommPro.biz 2013.04.25

 

HSBC Scot Free?

In study after study there is nothing to support the idea that “C” Suite occupants are irreplaceable. There’s an occasional example of a corporate leader’s departure negatively impacting a company’s performance: Steve Jobs’s voluntary ten-year absence from Apple left the company floundering; the jury is out at this point following his death in the fall of 2011 but the company is certainly not going to collapse. However, in all but a few cases there is an able individual in the wings ready to take over.

That makes a Department of Justice decision to give HSBC a get-out-of-jail-free card so outrageous. Listen to Attorney General Eric Holder earlier this month (2013.03.08) before a Senate Committee: "I am 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 we do prosecute -- if we do bring a criminal charge -- it will have a negative impact on the national economy, perhaps even the world economy," How dumb is that? What an insult to the tens of thousands of honest HSBC people to imagine that there are not lots of capable executives at HSBC who could step into the shoes of the boneheads who have turned an international financial giant into a gigantic criminal enterprise.

Let’s review: HSBC laundered carloads of money for the Sinaloa Drug Cartel, who are reported to have murdered thousands of people. HSBC created shams to help North Korea, Iran and others beat sanctions. HSBC financed Al Qaeda and a wide range of terrorist organizations along with mobsters in Russia, and they provided good old tax cheats a place to stash their earnings. That’s just a smattering of the flat-out criminal activity at HSBC. And the DOJ is letting them get away with it? Just have coffee in the same coffee shop as a terrorist and you’ll be grilled by the FBI. And HSBC gets a pass? Unbelievable!

Where does Holder think the “indications” of worldwide economic collapse if we jail these crooks is coming from? From the same HSBC lobbyists who pour bucks into the pockets of members of the Congress. Fortunately there are a few on the hill who are willing to stand up to these crooks, Carl Levin and Elizabeth Warren among others. Still, one estimate of support in the Senate for a break-up of the monster banks sees fewer than forty votes. Can you imagine how few members of the House would support such an action?

Everyone knows that’s what’s needed. The Dallas Fed chairman and at least one other Fed Board member have documented the need to break up the too-big-to-fail banks. These banks are the real threat to the world’s economic health. And until we treat criminal banksters for what they are, crooks, and put them in jail where crooks belong, they are going to keep right on breaking the law and risking another crash with their roulette wheel style of banking. Why not, when the top law enforcement officer in the United States gives them a pass?

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.