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Thursday, 13 December 2012 10:02

The New 007 License to Kill: HSBC and Big Banks

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MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT  money7556 HSBC is an accessory to murder

What a hyperbolic, over the top headline many readers must think: "The New 007 License to Kill: HSBC and Big Banks. "

Has BuzzFlash gone scampering up the hill of reason and madly fallen into a pit of pathological paranoia and knee-jerk conspiratorialism?

Not really, not really at all.  

Yesterday, BuzzFlash at Truthout wrote about the largest fine levied against a bank – in this case HSBC – for money laundering on behalf of narcos and nations that the United States government in DC considers a threat to the national security.  Not a person at HSBC will be indicted or prosecuted, as we noted, and the Department of Justice defended its actions by, you guessed it, basically saying that HSBC is too big too fail, and that prosecution might lead to the bank's activities being disrupted.

As BuzzFlash noted in its commentary yesterday:

Recently, Truthout posted an article on the strong possibility that intentional homicides in Mexico (most related to the so-called war on drugs, and many committed by Mexican military and police) will rise to more than 120,000 during the just-ended (December 1) six-year reign of ex-Mexican President Felipe Calderon.

HSBC didn't just launder countless dollars and pesos for profit by accident. According, to the Department of Justice report, it played an active and knowing role in facilitating the money laundering, which allows the narcos to safely bank – and move around -- their billions of dollars in sales.

According to the Justice Department's findings – and a Senate investigation earlier this year – HSBC became the "preferred money launderer" for Mexican cartels because the bank adopted policies that were narco-friendly. As described in an article in MarketWatch:

Documents released Tuesday provide new details also about how HSBC allegedly became “the preferred bank” for narcotics drug cartels in Mexico and Colombia and left “dangerous gaps” that traffickers abused with major cash deposits– all while top executives froze staffing at the bank’s anti-money-laundering unit….

Specifically, the government says HSBC failed to monitor over $670 billion in wire transfers from HSBC’s Mexico division between 2006 and 2009 and failed to monitor over $9.4 billion in purchases of U.S. dollars from HSBC’s Mexico unit over the same period. (The Justice Department’s said HSBC’s Mexico division became the “preferred financial institution for drug cartels and money-launderers.”)

The Washington Post cited Assistant Attorney General Lanny A. Breuer:

“These traffickers didn’t have to try very hard,” Breuer said. “They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows.”

The illicit money was submerged in the billions of dollars of transfers that flowed between HSBC’s Mexican and American affiliates. In many cases, the illicit cash was generated by drug sales in American cities, smuggled to Mexico and deposited at HSBC there. Then it was wired back to an account at HSBC in the United States as clean money. In other cases, bulk cash was deposited and converted into local currency, a process called the Black Market Peso Exchange by investigators.

The Department of Justice has fined banks involved with money laundering token amounts (although they appear large, they are a small percentage of a bank's profits and the loss is covered by shareholders, not the executives responsible for the money laundering).  The violations have ranged from accepting narco money knowingly to taking funds from banks and nations with ties to terrorists to doing banking with countries that the US has sanctions against.

The Post reminds readers:

But a string of august names in global banking — Credit Suisse, Lloyds Bank, ABN Amro, ING Bank and now HSBC — have reached settlements in the past couple of years with the U.S. government for billions of dollars in tainted transactions. These investigations have revealed that weaknesses in the financial system lay not with the so-called hawala brokers of Karachi, Pakistan, but the bespoke bankers of London, Amsterdam and Geneva, and their American affiliates. The loss of moral legitimacy in the Department of Justice and the Obama administration in adopting a policy that the bigger the financial crime the less likely to criminally prosecute it is an affront to the rule of law.  

As one reader wrote BuzzFlash in response to our commentary yesterday: "I recall Feds prosecuting folks in Chicago who bought money orders to launder proceeds of drug profits for a couple thousand dollars each to be sent out of the country. Yet banks which admitted money laundering hundreds of millions (perhaps billions) in drug profits get off with paying a fine?"

For big banks and Wall Street financial firms, there are a different set of rules; there are basically few violations of banking laws --  very few -- that will lead to criminal prosecution.  Yes, an individual bank executive might be indicted for embezzling from a bank, but bank executives won't be prosecuted for facilitating the fortunes made by drug traffickers or financially working with banks and nations that, according to the US government, seek to attack or undermine the interests of America.

Given the death toll in Mexico, Central America, Colombia and elsewhere due to the show-war on drugs, banks like HSBC (and the other banks that have and likely continue to engage in illicit drug money laundering in Mexico and South America) aren't just violating laws when they willingly accept the deposits of narco; they are acting as accessories to murder.

Without the ability to launder hundreds of millions of dollars, perhaps billions, through American banks, the drug cartels and their partners in the Mexican government (including many politicians, federal police, members of the military – including generals – and often the local police), no doubt fewer citizens would have been killed in Mexico up to this point.

Real people are injured and die from the transgressions of banks like HSBC – and the acts of HSBC are epidemic in the new world of global finance.

As a commentator for the chroncicler of big business, Forbes Magazine, wrote of the HSBC betrayal:

HSBC also understood the subtleties of – and were, apparently, fully invested in – money laundering for drug kingpins and terror cells, while ignoring U.S. sanctions established against rogue nations. HSBC’s US unit managed to position the brand in this way by accepting $7 billion of dollars from Mexican drug cartels, conducting 25,000 Iranian transactions totaling over $19 billion in just one week, and helping Saudi banks with terror financing for groups like al-Qaeda. All of which, if you hadn’t already surmised, is patently illegal. The bank knew it was illegal too, so the question right about now is, how are you feeling about the HSBC brand?

As long as the US government continues to value "too big to fail" money machines over the value of lives, HSBC and other untouchable financial institutions and corporations will continue to have a license to be an accessory to murder.

This isn't just a perverse injustice: it's a deadly one.

Javier Sicilia, who lost his son (as "collateral damage") to the so-called war on drugs in Mexico, is now heading a peace movement: The Movement for Peace With Justice and Dignity.  Sicilia, a poet, writes of the yearning of the people of Mexico to be rid of the narco network, including US and global banks, that has caused massive loss of life and by one account at least 25,000 disappeared (not to mention the kidnappings and general hyper-violence). He writes:

Confronting pain we have walked, we have embraced and cried - with the dignity that lives within us that makes us seek out, that makes us struggle and that makes us convert our pain into love. The toll of this war is carried within each one of us. We ask for peace, we ask for justice and dignity. (Translated from the Spanish)

The United States Department of Justice and the Obama administration have betrayed these victims and their families by letting bankers who are, in essence, "silent" financial partners with the narcos go free.

 (Photo: 401(K) 2012)