HSBC laundered hundreds of millions and perhaps billions of
dollars for drug cartels responsible for the deaths of tens of thousands of
people over the past two decades. The bank transferred at least $881 million of
known drug trafficking proceeds, including money from the Sinaloa Cartel in
Mexico, which is known for dismembering its victims and publicly displaying
their body parts.
BEFORE HIS
FIRST DAY IN OFFICE AS PRESIDENT, BARACK OBAMA HAD ALREADY SUCKED OFF MORE
BANKSTER BRIBES THAN ANY PRESIDENT IN HISTORY. WHAT DID THE BANKSTERS KNOW THAT
THE REST OF US DID NOT?
The Republican staff of the US House Committee on Financial
Services released a report Monday presenting its findings on why the Obama
Justice Department and then-Attorney General Eric Holder chose not to prosecute
the British-based HSBC bank for laundering billions of dollars for Mexican and
Colombian drug cartels.
Last June, when JPMorgan
Chase CEO Jamie Dimon testified before the Senate on unreported losses of at
least $5 billion, sitting behind him was the bank’s chief counsel, Stephen
Cutler, who had graduated to that post after serving as SEC enforcement chief.
A key
factor in Obama’s newfound and growing wealth are those who profited from his presidency.
A number of his public speeches have been given to big Wall Street firms and
investors. Obama has given at least nine speeches to Cantor Fitzgerald, a large
investment and commercial real estate firm, and other high-end corporations.
According to records, each speech has been at least $400,000 a clip.
“Money laundering is a crime that makes other crimes
possible. It can accelerate economic inequality, drain public funds, undermine
democracy, and destabilize nations—and the banks play a key role. ‘Some of
these people in crisp white shirts in their sharp suits are feeding off the
tragedy of people dying all over the world,’ said Martin Woods, a former
suspicious transactions investigator for Wachovia.’”
BLOG EDITOR: JP MORGAN IS BARACK OBAMA’S FAVE CRIMINAL
BANKSTER. THEY HAVE BEEN VERY GENEROU$ TO OBOMB AND HIS BIDENBOY.
“The other banks on the top 10 list are JPMorgan Chase
(whose CEO Jamie Dimon was once known as Obama's "favorite banker"),
New York Mellon, Standard Chartered, Barclays, HSBC, Bank of China, Bank of
America, Wells Fargo and Citibank.”
HSBC
HAS LONG HAD A HISTORY AS THE CHOICE BANKSTER FOR THE MEXICAN DRUG CARTELS. OBAMA’S
BANKSTER REGIME MADE SURE THAT NO ONE WENT TO PRISON AT HSBC. DURING HIS 8
YEARS BANKSTER-OWNED ERIC HOLDER, A SOCIOPATH LAWYER, MADE SURE THAT NO
BANKSTER PERIOD SAW PRISON TIME. NOT THEY’RE BACK AT IT. WHO WOULD HAVE
THOUGHT?!?
The report goes on to explain that “even after they were
prosecuted or fined for financial misconduct, banks such as JPMorgan Chase,
HSBC, Standard Chartered, Deutsche Bank and Bank of New York Mellon continued
to move money for suspected criminals.”
In 2012, the Obama
administration refused to criminally prosecute Britain’s biggest bank, HSBC,
after it acknowledged laundering billions of dollars for Mexican and Colombian
drug cartels. Among the bank’s major clients was the Sinaloa Cartel in Mexico,
which is known for dismembering its victims and publicly displaying their body
parts.
“Attorney
General Eric Holder's tenure was a low point even within the disgraceful
scandal-ridden Obama years.” DANIEL GREENFIELD / FRONTPAGE MAG
“Judicial Watch’s records
request is designed to expose how California state legislators are wasting tax
dollars to take care of another corrupt politician – Eric Holder – under the
guise of resisting the rule of law on immigration and other matters,”
stated Judicial Watch president Tom Fitton. “His record at the Clinton and Obama Justice Departments
demonstrates a willingness to bend the law in order to protect his political
patrons.”
And it all got much, much worse after 2008,
when the schemes collapsed and, as Lemann points out, Barack Obama did not
aggressively rein in Wall Street as Roosevelt had done, instead restoring the
status quo ante even when it meant ignoring a staggering white-collar crime
spree. RYAN COOPER
“The Obama/Biden was the most corrupt, criminal
administration any of us has ever seen, yet the
media cheered or covered up all the abuse of
power, obstruction of Justice and other
crimes. “ JACK HELLNER
During his presidency, Obama bragged that his
administration was “the only thing between [Wall Street] and the
pitchforks.”
In fact, Obama handed the robber barons and outright
criminals responsible for the 2008–09 financial crisis a multi-trillion-dollar
bailout. His administration oversaw the largest redistribution of wealth in
history from the bottom to the top one percent, spearheading the attack on the
living standards of teachers and autoworkers.
“This was not
because of difficulties in securing indictments or convictions. On the
contrary, Attorney General Eric Holder told a Senate committee in March of 2013
that the Obama administration chose not to prosecute the big banks or their CEOs
because to do so might “have a negative impact on the national economy.”
Report documents criminality and corruption at
heart of global banking system
22 September 2020
An
explosive report published Sunday by BuzzFeed News documents
the role that major US and international banks knowingly play in laundering and
circulating trillions of dollars in dirty money from terrorist organizations,
drug cartels and assorted international financial criminals.
The
report is an unanswerable indictment not only of the banks, but also of Western
governments and regulatory agencies, which are fully aware of the banks’
illegal but highly lucrative activities and tacitly sanction them.
BuzzFeed writes that its
investigation demonstrates “an underlying truth of the modern era: The networks
through which dirty money traverses the world have become vital arteries of the
global economy. They enable a shadow financial system so wide-ranging and so
unchecked that it has become inextricable from the so-called legitimate
economy. Banks with household names have helped to make it so.”
The report continues: “Profits from deadly drug wars,
fortunes embezzled from developing countries, and hard-earned savings stolen in
a Ponzi scheme were all allowed to flow into and out of these financial
institutions, despite warnings from the banks’ own employees.
“Money
laundering is a crime that makes other crimes possible. It can accelerate
economic inequality, drain public funds, undermine democracy, and destabilize
nations—and the banks play a key role. ‘Some of these people in crisp white
shirts in their sharp suits are feeding off the tragedy of people dying all
over the world,’ said Martin Woods, a former suspicious transactions
investigator for Wachovia.’”
The
report goes on to explain that “even after they were prosecuted or fined for
financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered,
Deutsche Bank and Bank of New York Mellon continued to move money for suspected
criminals.”
The
extensive report is based on more than 21,000 “suspicious activity reports”
(SARs) filed by some of the world’s biggest banks with the US Treasury
Department’s Financial Crimes Enforcement Network, or FinCEN, between 1999 and
2017. FinCEN makes its database of SARs available to more than 450 law
enforcement and regulatory agencies across the United States.
What BuzzFeed calls
the “FinCEN Files” were leaked to the news outlet more than a year ago. It has
since been combing through them, in collaboration with the International
Consortium of Investigative Journalists, which coauthored the report.
BuzzFeed
News notes
that it also shared the SARs with more than 100 other news organizations in 88
countries. The report, titled “Dirty Money Pours into the World’s Most Powerful
Banks,” includes only a small and redacted sample of the news outlet’s hoard of
suspicious activity reports.
The US
government maintains a policy of total secrecy in relation to the SARs,
refusing to release them even in response to Freedom of Information requests.
Earlier this year, the Treasury Department issued a statement declaring that
the unauthorized disclosure of SARs is a crime. In an obvious attempt at
intimidation and threat of prosecution, the statement added that the matter was
being referred to the Department of Justice and the Treasury Department’s
Office of Inspector General.
The initial
response of the American corporate media has been to bury or entirely ignore
the BuzzFeed revelations. Monday’s print edition of
the New York Times carried a report on page eight of its
business section. The print editions of the Washington Post and
the Wall Street Journal made no mention of the exposé.
The report
is based on more than 22,000 pages of documents concerning over 10,000 subjects
and involving more than 170 countries and territories. Nearly 90 banks and
other financial institutions are included in the institutions that submitted
the SARs.
Deutsche
Bank recorded the highest total value of transactions listed in the FinCEN
Files: $1.3 trillion, based on 982 suspicious activity reports.
BLOG EDITOR: THE CRIMINAL ORGANIZATION OF WELLS
FARGO HAS LONG OWNED THE OLD WHORE FEINSTEIN AND NOW KAMALA HARRIS. AS ATTORNEY
GENERAL OF CA, HARRIS MADE SURE NO WELLS FARGO EXECS WENT TO PRISON DESPITE THE
MASSIVE ECONOMIC DEVASTATION THIS BANK CAUSED. WELLS FARGO HAS CONTINUE TO BE A
CRIME TIDAL WAVE EVER SINCE. AFTER ALL, IT’S EASY AND CHEAP TO BUY A POLITICIAN.
The other
banks on the top 10 list are JPMorgan Chase (whose CEO Jamie Dimon was once
known as Obama's "favorite banker"), New York Mellon, Standard
Chartered, Barclays, HSBC, Bank of China, Bank of America, Wells Fargo and
Citibank.
One report,
filed by JPMorgan in August, 2014, lists over $355 billion in suspicious
activity relating to more than 100,000 wire transfers “sent, received or
transferred” over the course of a decade by MKS, a Swiss-based company that
trades in precious metals.
At least 25
of the people named as subjects in the SARs have appeared on Forbes ’
list of billionaires in 2018, 2019 or 2020.
The findings
featured in the BuzzFeed report include:
● Standard Chartered moved money on behalf of Al Zarooni
Exchange, a Dubai-based business that was later accused of laundering cash on
behalf of the Taliban.
● HSBC’s Hong Kong branch allowed WCM777, a Ponzi scheme,
to move more than $15 million even as the business was being barred from
operating in three states. Authorities say the scheme stole some $80 million
from investors, mainly Latino and Asian immigrants. The firm’s owner used the
funds to buy two golf courses, a mansion, a 39.8-carat diamond and mining
rights in Sierra Leone.
● Bank of America, Citibank, JPMorgan Chase, American
Express and other financial firms processed millions of dollars in transactions
for Viktor Khrapunov, the former mayor of Kazakhstan’s most populous city, even
after Interpol issued an order for his arrest. Khrapunov fled to Switzerland
and was later convicted in absentia on charges including bribe-taking and
defrauding the city.
A
separate piece by NBC News presents evidence that JPMorgan, Bank of New York
Mellon and other banks helped move more than $150 million for companies tied to
the North Korean regime.
In other
words, the biggest US and international banks have made countless millions in
profits serving as money-launderers for organizations labeled
"terrorist" such as the Taliban and governments of so-called “rogue
states” such as North Korea—with the knowledge and tacit approval of the
governments of the US and other major powers—even as these same governments
were waging or threatening war against the targeted organizations and overseas
regimes.
The BuzzFeed report
describes the cynical rationale behind the formality of banks filing SARs,
which, for the most part, are never even read by the staff of FinCEN. Over the
past decade, the number of SARs filed by major banks has sharply increased,
indicating a growth of money laundering and other illegal activities on behalf
of criminal clients. Over the same period, the staff of FinCEN has shrunk by 10
percent.
Banks are
legally required to file a SAR with FinCEN if they suspect a transaction might
be linked to illegal activity. Large banks file tens of thousands of such
reports every year. In 2017, 19 large banks filed a total of 640,000 suspicious
activity reports, according to a study by the Bank Policy Institute, a lobbying
group.
But as
the BuzzFeed report explains: “So long as a bank files a
notice that it may be facilitating criminal activity, it all but immunizes
itself and its executives from criminal prosecution. The suspicious activity
alert effectively gives them a free pass to keep moving the money and
collecting the fees.”
In its
article on the FinCEN Files report, the New York Times noted
that JPMorgan wired money to banks in Switzerland, Lebanon and Nigeria on
behalf of a convicted money launderer, reported the transactions to British and
American authorities, and continued doing business with the client. The
Nigerian government is now suing the bank in British court.
This
collusion between gangster bankers and capitalist government regulators is a
continuation of longstanding policy. In 2012, the Obama administration refused to
criminally prosecute Britain’s biggest bank, HSBC, after it acknowledged
laundering billions of dollars for Mexican and Colombian drug cartels. Among
the bank’s major clients was the Sinaloa Cartel in Mexico, which is known for
dismembering its victims and publicly displaying their body parts.
That was in
keeping with the policy of the US government of shielding top bankers from any
accountability for illegal activities, including those that led to the collapse
of the financial system in 2008 and ushered in what at that time was the
deepest slump since the Great Depression. To this day, not a single leading
executive of a major bank has been prosecuted, let alone jailed, for fraudulent
activities that led to the destruction of millions of jobs and the decimation
of working class living standards in the US and around the world.
Here, in a
nutshell, is the modern-day aristocratic principle that prevails behind the
threadbare trappings of “democracy.” The financial robber barons of today are a
law unto themselves. They can steal, plunder, even murder at will, without fear
of being called to account. They devote a portion of their fabulous wealth to
bribing politicians, regulators, judges and police—from the heights of power in
Washington down to the local police precinct—to make sure their wealth is
protected and they remain immune from criminal prosecution.
Above the law
BARACK OBAMA, THE
MEXICAN DRUG CARTELS AND HSBC BANKSTERS
In the latest scandal involving the criminal activities of
major banks, the US Justice Department on Tuesday announced a $1.9 billion
settlement with British-based HSBC on charges of money laundering on a massive
scale for Mexican and Colombian drug cartels.
The deal was
specifically designed to avert criminal prosecution of either the bank, the
largest in Europe and third largest in the world, or any of its top executives.
Even though the bank admitted to laundering billions of dollars for drug lords,
as well as violating US financial sanctions against Iran, Libya, Burma and
Cuba, the Obama administration avoided an indictment by means of a “deferred
prosecution agreement.”
The
agreement was in keeping with the policy of the US government of shielding top
bankers from any accountability for illegal activities that led to the collapse
of the financial system in 2008 and ushered in the global recession. Not a
single leading executive of a major bank has been prosecuted, let alone jailed,
for fraudulent activities that triggered the present crisis, leading to the
destruction of millions of jobs and the decimation of working-class living
standards in the US and around the world.
Under the
protection of the state, the frenzied speculation and swindling continue unabated,
underpinning record profits for the banks and bigger-than-ever
multi-million-dollar compensation packages for top bankers.
In a
front-page article on Tuesday, the New York Times outlined
internal discussions within the Obama administration that led to the decision
not to indict HSBC. The Times reported that prosecutors at
the Justice Department and the New York District Attorney’s office pushed for a
compromise in which the bank would be indicted not for money laundering, but
for the lesser charge of violating the Bank Secrecy Act.
BLOG EDITOR: WHY DO THESE BANKSTER POLS THINK
WE’RE ALL STUPID? JUST FOLLOW THE MONEY… RIGHT INTO OBOMB’S POCKETS!
Even this, however, was too much for the Obama
administration. The Treasury Department, headed by former New York Federal
Reserve President Timothy Geithner, and the Office of the Comptroller of the
Currency, the federal regulatory agency charged with policing major banks
including HSBC, vetoed any prosecution on the grounds that a serious legal blow
to HSBC would jeopardize the financial system.
What does
this mean? HSBC, in its pursuit of profit, facilitated the activities of drug
cartels that have been the target of the so-called “drug war”—a war prosecuted
by the Mexican military at the behest of and with the collaboration of
Washington—in which over 60,000 people have died. This is in addition to the
human suffering caused by the narcotics trade in the US and around the world.
It was
allowed to pay a token fine—less than 10 percent of its profits for 2011 and a
fraction of the money it made laundering the drug bosses’ blood money. Meanwhile, small-time
drug dealers and users, often among the most impoverished and oppressed
sections of the population, are routinely arrested and locked up for years in
the American prison gulag.
The
financial parasites who keep the global drug trade churning and make the lion’s
share of money from the social devastation it wreaks are above the law. As
the Times put it, “certain financial institutions, having
grown so large and so interconnected, are too big to indict.”
Here, in
a nutshell, is the modern-day aristocratic principle that prevails behind the
threadbare trappings of “democracy.” The financial robber barons of today are a
law unto themselves. They can steal, plunder, even murder at will, without fear of
being called to account. They devote a portion of their fabulous wealth to bribing
politicians, regulators, judges and police—from the heights of power in
Washington down to the local police precinct—to make sure their wealth is
protected and they remain immune from criminal prosecution.
The role of
so-called “regulators” such as the Federal Reserve, the Securities and Exchange
Commission (SEC) and the Office of the Comptroller of the Currency is to run
interference for the bankers. They are well aware that crimes are being
committed on a daily basis, but turn a blind eye because criminality is
intrinsic to the operations of Wall Street and the profits it takes in.
There is
evidence that HSBC and other major banks stepped up their money laundering for
drug cartels and other criminal outfits in response to the financial crisis
that began to emerge in earnest in 2007 and exploded in September of 2008 with
the collapse of Lehman Brothers.
Following a
similar “deferred prosecution” deal with Wachovia Bank in 2010 for its drug
money laundering operations, Antonio Maria Costa, who then headed the United
Nations office on drugs and crime, said that the flow of crime syndicate money
represented the only “liquid investment capital” available to the banks at the
height of the crisis. “Inter-bank loans were funded by money that originated
from the drugs trade,” he said.
There can be
little doubt that US regulators and political leaders gave their tacit consent
to these operations as part of their rush to rescue Wall Street from the
consequences of its own money-mad speculative binge.
The
incestuous relationship between bank regulators and the banks comes into full
view in the case of another recent bank scandal. Last week, Deutsche Bank was
named by three ex-employees in a complaint to the SEC alleging that it
fraudulently concealed $12 billion in losses between 2007 and 2009.
The Financial
Times noted in passing that Robert Khuzami, the head of enforcement
at the SEC, has recused himself from the probe because, before taking his post
at the federal agency, he was Deutsche Bank’s general counsel for the Americas
from 2004 to 2009. In other words, he was in charge of legally defending the
bank at the very time it was, according to whistle blowers, engaging in
accounting fraud.
This was
also the period when Deutsche Bank and other major banks were making billions
by poisoning the world financial system with toxic mortgage-backed securities.
Last year, the Senate Permanent Subcommittee on Investigations devoted 45 pages
of a voluminous report on the financial crash to the fraudulent activities of
Deutsche Bank.
The report
noted that the bank’s top trader in collateralized debt obligations had
referred to securities the bank was selling as “crap” and “pigs,” and called
the banking industry’s CDO operations a “Ponzi scheme.”
That such a
man should be put in charge of policing the banks is, in fact, par for the
course. The man who recommended that the Obama administration give Khuzami the
job, Richard Walker, the current chief counsel at Deutsche Bank, was himself a
former head of enforcement at the SEC.
Last June,
when JPMorgan Chase CEO Jamie Dimon testified before the Senate on unreported
losses of at least $5 billion, sitting behind him was the bank’s chief counsel,
Stephen Cutler, who had graduated to that post after serving as SEC enforcement
chief.
This Augean
stable of crime and corruption, which involves every official institution of
American capitalism, cannot be reformed. The stranglehold of the financial
aristocracy over economic life can be ended only through the mass mobilization
of the working class to expropriate the bankers and place the major banks and
financial institutions under public ownership and democratic control.
US Justice
Department blocked prosecution of HSBC bank for drug cartel money laundering
The
report, titled “Too Big to Jail,” reveals that in 2012 Holder and other senior
Justice Department officials ignored an internal department recommendation to
criminally prosecute key bankers at HSBC. The report also documents the fact that
George Osborne, then Britain’s chancellor of the exchequer, warned the Obama
administration that prosecution of the world’s fourth-largest bank could
precipitate a new global financial crisis.
The report
states: “Rather than lacking adequate evidence to prove HSBC’s criminal
conduct, internal Treasury documents show that DOJ [Department of Justice]
leadership declined to pursue AFMLS’s [Asset Forfeiture and Money Laundering]
recommendation to prosecute HSBC because senior DOJ leaders were concerned that
prosecuting the bank ‘could result in a global financial disaster’—as
[Britain’s Financial Services Authority] repeatedly warned.”
HSBC
laundered hundreds of millions and perhaps billions of dollars for drug cartels
responsible for the deaths of tens of thousands of people over the past two
decades. The bank transferred at least $881 million of known drug trafficking
proceeds, including money from the Sinaloa Cartel in Mexico, which is known for
dismembering its victims and publicly displaying their body parts.
In a lawsuit
filed against HSBC by the families of Americans killed by Mexican cartels,
prosecutors presented evidence that Mexican drug lords were such frequent
customers at HSBC that the bank specifically designed deposit boxes for their
use that would fit in HSBC bank teller windows.
The report
documents the criminal role of the Obama administration in shielding the
gangsters who run the major banks in the US and internationally from
prosecution for their illegal and socially destructive deeds. It makes clear
that the failure of the US government to hold criminally liable a single
leading Wall Street figure in the aftermath of the 2008 financial crash, which
was triggered by rampant fraud and swindling, is the result of a highly
conscious and systematic policy.
Holder
himself all but admitted as much in testimony before the Senate Judiciary
Committee in March of 2013, when he declared: “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.”
Instead of
jailing the banksters, the administration and the Federal Reserve plowed
trillions of dollars in public funds into the financial system to drive up
stock prices and the already obscene wealth of the financial aristocracy, while
making the working class pay the cost in the form of savage social cuts, the
destruction of pension and health care benefits, layoffs and wage reductions.
A
separate US Senate report released in 2012 already concluded that HSBC had a
“pervasively polluted” culture that permitted its top officials to look the
other way and allow $7 billion in drug money to flow from Mexico to the US. That year, Under
Secretary for Terrorism and Financial Intelligence David S. Cohen stated, “HSBC
absolutely knew the risks of the business it pursued, yet it ignored specific,
obvious warnings.”
The House
report issued Monday states that Holder “misled” Congress as to why the DOJ did
not prosecute the bank. After being criticized for his “too big to jail”
comments before the Senate in March 2013, Holder sought to walk them back in
testimony before the House Judiciary Committee in May 2013. He denied at that
time that he was unwilling to prosecute a major bank because of its size and
claimed HSBC’s size was not a significant factor in the Justice Department’s
decision not to prosecute. The reason, he said, was “lack of evidence.”
The House
committee found, on the contrary, that the Asset Forfeiture and Money
Laundering section of the DOJ wanted to criminally prosecute bankers at HSBC
precisely because their violations of law were so blatant and so well
documented.
The report
cites a letter sent by Osborne to then-Fed Chairman Ben Bernanke and
then-Treasury Secretary Timothy Geithner in which Osborne warned that
prosecuting a “systemically important financial institution” such as HSBC
“could lead to [financial] contagion” and pose “very serious implications for
financial and economic stability, particularly in Europe and Asia.” Later,
Osborne underscored this point in a face-to-face meeting with Bernanke in which
they discussed the possible prosecution of HSBC bankers.
Instead
of prosecuting, Holder oversaw a “deferred prosecution” sweetheart deal in
which the bank was required to pay $1.9 billion in penalties.
Families of
Americans killed by Mexican drug cartels sue banking giant HSBC
16 February 2016
On February
9, four US families who lost loved ones to Mexican drug cartel violence in 2010
and 2011 filed an unprecedented lawsuit against HSBC Holdings, HSBC Bank USA,
and HSBC México S.A. The suit charges that the banking giant knowingly supplied
terrorist organizations, namely four major drug cartels, with “material
support” by laundering billions of dollars in the years leading up to the
murders.
Among the
victims cited in the case is US Immigration and Customs Enforcement Special
Agent Jaime J. Zapata who was ambushed and murdered by the infamous drug
cartel, Los Zetas, while on temporary assignment in central Mexico in 2011. The
case received national attention after confirmed reports that at least one of
the weapons used to kill him was linked back to the US government. The AK-47
was one of the many weapons essentially funneled to the drug cartels as part of
the federal operation known as “Fast and Furious,” in which the Bureau of
Alcohol Tobacco and Firearms deliberately allowed firearms dealers to sell
weapons to illegal straw buyers in hopes of tracing them back to the cartels.
Other
victims included in the lawsuit are Rafael Morales Jr., who was abducted just
outside a church on his wedding day, along with his brother and uncle, by
members of the Sinaloa cartel with the collaboration of the local police force.
All three were later found dead of asphyxiation, their heads wrapped in plastic
and duct tape.
Also
included in the lawsuit are Lesley and Arthur Redelfs, who were both shot to
death in Ciudad Juarez on their way home from a children's birthday party
hosted by the US Consulate where Lesley was employed. Lesley Redelfs was four
months pregnant.
The basis of
the case rests on the US Anti-Terrorism Act, which was modified in the
aftermath of 9/11 to allow victims to seek compensation from any organization
that supplies terrorist groups with material support or resources. While the US
government has not officially labeled them as terrorist organizations, the suit
cites the more than 100,000 murders and tens of thousands of disappearances
since 2006 in arguing for the right to victims’ compensation.
HSBC’s
guilt in laundering billions of dollars for drug cartels is irrefutable. The details of the
many, well documented occurrences of the bank’s sidestepping, and in most
instances outright disregard for banking laws exposed in the legal proceedings
of this case and a related 2012 case are overwhelming. The complaint filed by
the plaintiffs’ in Brownsville, Texas on February 9, reveals that HSBC’s Mexican
branches routinely accepted and processed exorbitant amounts, hundreds of
thousands and sometimes millions of US dollars from clients with no
identifiable source of income.
The
complaint reads, “HSBC intentionally implemented criminally deficient anti-money
laundering programs, processes, and controls, which were designed to guarantee
that billions of dollars of illicit proceeds would go through its banks
undetected or unreported.” It goes on to explain that in many cases these funds
were even delivered in custom designed boxes made to fit the dimensions of the
teller windows.
In spite of
the deliberately lax, and during certain periods nonexistent, regulatory
system, the compliance function at HSBC Mexico was still able to catch
suspicious activity. In December 2008, there were 675 accounts pending closure
based on suspicion of money laundering activity. Closures were ordered on 16 of
those accounts in 2005, 130 in 2006, 172 in 2007, and 309 in 2008, yet all 675
of these accounts remained open well into 2009, continuing to allow money
launderers to make bulk cash deposits.
HSBC Mexico’s
former director of money laundering deterrence, in an exit interview following
his resignation, was quoted as saying that he believed senior management had
“absolutely no respect for AML [Anti-money laundering] controls and the risks
to which the Group was exposed and had no intention of applying sensible or
appropriate approaches.” The report goes on to explain that the former director
attributed the behavior to what he characterized as “a culture [of] pursuing
profit and targets at all costs.”
HSBC
executives received repeated and explicit warnings about the large scale money
laundering schemes from outside sources such as the US State Department as
early as 2006, the Financial Crimes Enforcement Network—a bureau of the US
Treasury Department—as well as several internal warnings throughout 2007 and
2008. Despite this, HSBC Mexico still accepted over $4.1 billion in US dollar
cash deposits in 2008, a record amount for the branch. It is widely believed
that many banks, including HSBC, only managed to stay afloat through the 2008
financial crisis by catering to these international drug cartels.
The money
laundering that is the basis of this new lawsuit was proven in a 2012
prosecution by the US Justice Department. The case ended in a “preferred
prosecution agreement” in which the court gave the multinational bank what
amounted to a free pass for the largest drug money laundering case in history.
Under the conditions of this agreement the bank agreed not to contest the
charges of failing to maintain an effective anti-money-laundering program, and
violating the Trading With the Enemy Act and the International Emergency
Economic Powers Act.
What made
this case unique, aside from the huge amount of funds proven to have been
laundered (at least $881 million), was the Justice Department's brazen
acknowledgement of the motives behind its failure to pursue a more aggressive
prosecution, namely, the protection of the global capitalist financial markets.
Assistant
Attorney General Lanny Breuer at a press conference justifying why criminal
charges were not brought against the bank explained, “HSBC would almost
certainly have lost its banking license in the US, the future of the
institution would have been under threat and the entire banking system would
have been destabilized.” Meaning, the big banks and other multibillion-dollar
corporations are exempt from the law so long as they continue lining the
pockets of the ruling aristocracy. This decision exposed decisively, once
again, the inextricable and corrupt relationship between the various branches
of the government and the global financial oligarchs.
The 2012
decision brought down by a Brooklyn federal judge was admittedly not based on
any principled fulfillment of the law. Rather, it served to establish a more
tangible basis for the legal shielding that had been regularly taking place for
this type of giant corporation deemed “too big to jail.”
In lieu of
any criminal charge against the responsible parties, the bank was instead fined
$1.9 billion, an amount equal to barely five weeks worth of profits for HSBC
and far less than it accrued through its laundering of drug money. It
constituted a fairly minor cost of doing business. Not a single day of jail
time was demanded for the bank executives, who had essentially functioned as
the financial arm of the drug cartels.
The
relationship between massive international banks such as HSBC and the Mexican
drug cartels like Los Zetas and Sinaloa has been one of mutual benefit. Both
organizations are driven by an insatiable need for profit demanded by the
capitalist system and both are indifferent to the criminal methods by which it
is gained.
However, as
this case so clearly shows, it is not simply the banks who are complicit in the
massive growth and influence of these drug cartels. The banks play an important
role in providing a financial system to manage their money, but it is the US
Justice Department that has sanctioned such criminal behavior, and the US
government as a whole that has created and perpetuated the conditions under
which such corrupt and violent drug cartels could thrive.
The US
government’s support for Mexico’s “drug war” begun in 2006 has done nothing to
curb the growth of the drug cartels and instead has arguably served to
intensify it. The Merida Initiative implemented by the US government in 2008,
supplied Mexico with over $2 billion in arms aid, provided military training of
security forces and sent “advisers” across the border. With large sections of
Mexico’s officials and law enforcement officers working in collaboration with
the drug cartels, much of these funds and resources have aided the very groups
they were meant to combat. One report estimates that the cartels spend more
than a billion dollars each year just bribing the Mexican municipal police.
In the case
of Rafael Morales, it was in fact the local police force who accompanied the
Sinaloa cartel and barricaded the road to the church and it was arms provided
by the US government that were used against Zapata in 2011.
On closer
examination, the origins of these drug cartels themselves lie in the relations
between the US and Mexican governments. Before becoming Los Zetas, the original
members of the violent drug cartel were a special forces unit of the Mexican
Army trained in the United States at the School of the Americas at Fort
Benning, Georgia. If HSBC is found guilty of providing material “means and
resources” to these terrorist organizations then it seems there should be ample
evidence and grounds to also indict the US government as well.
Whatever the
outcome of the recent lawsuit, the case has exposed once more the fraudulent
character of the “war on drugs,” as well as the staggering levels of
criminality of the highest reaches of the financial aristocracy and of the
political institutions that represent it.
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