HSBC and the Obama Justice Dept

[denjohn]

Rolling Stone
Outrageous HSBC Settlement Proves the Drug War is a Joke
By Matt Taibbi
December 13, 3:25 PM ET

...Breuer this week signed off on a settlement deal with the British banking giant HSBC that is the ultimate insult to every ordinary person who's ever had his life altered by a narcotics charge. Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a "record" financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

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...

And not only did they sell out to drug dealers, they sold out cheap. You'll hear bragging this week by the Obama administration that they wrested a record penalty from HSBC, but it's a joke. Some of the penalties involved will literally make you laugh out loud. This is from Breuer's announcement:

As a result of the government's investigation, HSBC has . . . "clawed back" deferred compensation bonuses given to some of its most senior U.S. anti-money laundering and compliance officers, and agreed to partially defer bonus compensation for its most senior officials during the five-year period of the deferred prosecution agreement.

Wow. So the executives who spent a decade laundering billions of dollars will have to partially defer their bonuses during the five-year deferred prosecution agreement? Are you fucking kidding me? That's the punishment? The government's negotiators couldn't hold firm on forcing HSBC officials to completely wait to receive their ill-gotten bonuses? They had to settle on making them "partially" wait? Every honest prosecutor in America has to be puking his guts out at such bargaining tactics...

Read the entire article here:
http://www.rollingstone.com/politics/bl ... z2F2JsfFyX

[Amskeptic]

Rolling Stone
Outrageous HSBC Settlement Proves the Drug War is a Joke
By Matt Taibbi
December 13, 3:25 PM ET

It is becoming more clear to me that we are dealing with a deep systemic human issue here. There is no longer any hope of government/industry being able to police/redirect their interaction. It is too mutually agreeable for them to pretzel the truth or rationalize the immoral.

I cannot say that I would do differently if I was a player in this system. Thankfully and for the grace of God, I do not have to worry about any such challenge to my values and ethics and morals. Yet, it leaves me with a challenge and it leaves all of us who are not stuck in this web of honey and milk with a challenge: We have to save our government of the people and for the people from those people. They are not going to spontaneously tear themselves away from the drugs of money and power. They won't. We can see it. We have to do it. Without rage and judgment.

We have to vote out the public proponents of this corporate plutocracy, then we have to ferret out the more secretive ones, and it is going to take exactly as much energy as they have expended in creating this monstrous sugar-high of revolving influences and peddling. To begin, we have to call out the lies and rationalizations. Each of us, whenever we see it. The internet news articles have comment blogs under them. Get there. Then, when the next elections loom, we have to research the available candidates and select the ones that appear to have some integrity and backbone. Then, we have to petition them to do the right thing, over and over and over. The time is late.
Colin

[glasseye]

Then, when the next elections loom, we have to research the available candidates and select the ones that appear to have some integrity and backbone.
Colin

Good luck with that. There are none.

My country, formerly respected as a world leader in peacekeeping and even-handedness, recently elected a government that unquestioningly supports Israel's every move, sells off control of our natural resources to the Chinese, unilaterally rejects any notion of reforming failed drug laws, insists on spending $50B on outmoded fighter aircraft instead of search and rescue helicopters and closes arctic research stations that deliver scientific data contrary to political needs.

Sorry to be so pessimistic, but even in the light of an Internet-informed populace, there's no sign of change.

It's too late. They're too big. They hold all the cards.

I welcome dissent. Convince me I'm wrong.

[hambone]

There is no telling what the future holds. Who knows, maybe an entire planet can receive grace - if we want it.
Life on Earth is like stacking building blocks for a toddler, who just defiantly knocks down the castle. What is left but to rebuild? Maybe building/destroying/building is all there really is.

[Amskeptic]

It's too late. They're too big. They hold all the cards.

I welcome dissent. Convince me I'm wrong.

Well Young Glasseye, tender observer to the human condition, you haven't been called into the streets of protest yet, have you? Our Washington Mall is a good place to learn how to petition your government with numbers of people. We DID stop the Vietnam War, we DID get the EPA over Republican's bloated bodies, we DID get a Civil Rights Act passed.
ColinILoveTheTasteOfTearGas
(that's why I stay primed with GumOut shots)

[denjohn]

We have to vote out the public proponents of this corporate plutocracy, then we have to ferret out the more secretive ones, and it is going to take exactly as much energy as they have expended in creating this monstrous sugar-high of revolving influences and peddling. To begin, we have to call out the lies and rationalizations. Each of us, whenever we see it. The internet news articles have comment blogs under them. Get there. Then, when the next elections loom, we have to research the available candidates and select the ones that appear to have some integrity and backbone. Then, we have to petition them to do the right thing, over and over and over. The time is late.

Colin

“LETTER to the EDITOR– MINNEAPOLIS STAR TRIBUNE
Let’s look at what we have learned from this election: The President was re-elected, Twenty-one of 22 incumbent sen-
ators were re-elected, and 353 of 373 incumbent members of the House were re-elected. The American people have
re-elected 94 percent of the incumbents who were running for re-election to an institution that has an approval rating
of about 9 percent.
This indicates, as an electorate, we are a nation of idiots. We’re now stuck with the useless, dysfunctional government
that we deserve.”

[Amskeptic]

“LETTER to the EDITOR– MINNEAPOLIS STAR TRIBUNE
Let’s look at what we have learned from this election: we are a nation of idiots.
We’re now stuck with the useless, dysfunctional government that we deserve.”

Good start. We know what to do at the next election.
Colin

[denjohn]

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery......Jesse

http://www.tnr.com/blog/plank/111041/to ... t-disgrace#

............Why no criminal charges? Why instead only some remedial measures and a "historical" fine that can be measured in weeks -- not years -- of earnings? It certainly wasn’t for lack of evidence. No, instead the government determined that HSBC is not only too big to fail, but also too big to jail. As the New York Times first reported, even though there were strong voices within DOJ pushing for criminal charges, the big banks' best friends within the government (the Treasury Department, of course, and other unnamed regulators) were too fearful that an indictment could destabilize the global financial system. Yes, it's 2008 all over again. In the name of systemic stability, a megabank again escapes accountability for its actions, rescued by compliant officials........................

The enduring presumption of bailouts in our banking system already drives the largest banks to take on too much risk with too little disclosure and too much leverage, a toxic cocktail that will inevitably lead to another financial crisis. Yesterday's action now spikes the punch with a new toxin, confirmation that criminal penalties are off the table, leaving a worst-case scenario of a fine totaling far less than even a single quarter's earnings. Given the potential profits of criminal behavior and the unlikelihood of personal consequences for the executives directing it, the message is clear: Crime pays. This will inevitably lead to more reckless risk-taking that will further undermine systemic stability and lead to an even greater financial meltdown down the road.

There is, of course, a solution for our emerging two-tier system of justice. The largest banks need to be broken up, the only realistic way to truly end both too big to fail and too big to jail. But since our government has demonstrated a reluctance to do so, perhaps the next time a megabank presents HSBC's argument that it should not be criminally charged because it would destabilize the financial system, instead of capitulating to this threat, DOJ should require at a bare minimum that in return for allowing the bank to survive, it must break itself up, ensuring that it could never hold the justice system hostage again. Otherwise, we can look forward to many more press conferences that are long on drama but short on impact.
Neil Barofsky was the Special United States Treasury Department Inspector General to oversee the Troubled Assets Relief Program from 2009 until his resignation in February 2011

[denjohn]

Good start. We know what to do at the next election.

Colin.....what gives you hope that we will have any more choice of quality candidates in the next election cycle than we did in the recent one ?
The only way I see that happening is if things seriously unravel in the meantime, seems we are well beyond tweaking the system.
Another quote from Jesse re our current state of affairs, can you fault the reasoning:

A credibility trap is when the regulatory, political and informational functions of a society have been compromised by corruption and fraud, so that the leadership cannot effectively reform or even honestly address the situation without impairing and implicating, at least incidentally, a broad swath of the power structure, including themselves.

The status quo tolerates the corruption and the fraud because they have profited at least indirectly from it, and would like to continue to do so. Even relatively honest reformers within the power structure are susceptible to various forms of soft blackmail and coercion.

And so a failed policy and its support system are almost self-sustaining, long after it is seen by the people to have failed. In its failure it becomes counterproductive, and an impediment to recovery in the real economy. Admitting failure is not an option for those who receive their power from that system.

The continuity of the structural hierarchy must therefore be maintained at all costs, even to the point of becoming a painfully obvious hypocrisy.

And one more:

Need Little - Want Less - Love More