Thursday, December 27, 2012

0 Global Bank, HSBC, Escapes "War on Drugs" for Money Laundering, Ties to Terrorism

(Matt Taibbi's story on Rolling Stone)
The British bank, HSBC, was recently exposed as having been deeply and brazenly tied with money laundering for drug lords in Latin America and ties to terrorist organizations in Saudi Arabi and Bangladesh.  The penalty upon the banks senior leadership? Tantamount to a slap on the wrist.  The Justice Department gave the senior leadership of HSBC a cushy deal that has HSBC taking back deferred compensation to some of its most senior US anti-money laundering and compliance officers and also having the bank "partially defer" compensation for senior executives during a five-year deferred prosecution agreement.  Does it sound soft -- because it is.  The DOJ sold-out, sold-out for so little.  They basically told a huge "fuck you" to anyone who is implicated by the War on Drugs (all of us but especially those of us who are non-white, lower-income, and in the city) because our criminalization wouldn't endanger the global financial system.  In effect, writing in that truth we all wished was a lie: if you have enough money, you're safe from harm.

Read Matt Taibbi's story (Here) for more details.  This is such a crock of shit.  I'm going to bed y'all.

Though this was not stated explicitly, the government's rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a "systemically important institution" in jail for drug laundering would threaten the stability of the financial system. The New York Times put it this way:
Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.
It doesn't take a genius to see that the reasoning here is beyond flawed. When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC's Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn't protect the banking system, it does exactly the opposite. It terrifies investors and depositors everywhere, leaving them with the clear impression that even the most "reputable" banks may in fact be captured institutions whose senior executives are in the employ of (this can't be repeated often enough) murderers and terrorists. Even more shocking, the Justice Department's response to learning about all of this was to do exactly the same thing that the HSBC executives did in the first place to get themselves in trouble – they took money to look the other way.

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Toni Preckwinkle must be feeling really validated right about now -- even after her apololie after she made the following comments. (Story)
Preckwinkle said she believes drug abuse is a medical matter -- and not one for the justice system. Then, she added 'Ronald Reagan deserves a special place in hell' for 'making drug use political.'
When the shocked crowd gasped, she replied: 'What? You didn't like that?'


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