Exhibit A:
www.rollingstone.com/politics/blogs/taib...r-is-a-joke-20121213
If you've ever been arrested on a drug charge, if you've ever spent even a day in jail for having a stem of marijuana in your pocket or "drug paraphernalia" in your gym bag, Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me.
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.
The banks' laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "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."
This bears repeating: in order to more efficiently move as much illegal money as possible into the "legitimate" banking institution HSBC, drug dealers specifically designed boxes to fit through the bank's teller windows. Tony Montana's henchmen marching dufflebags of cash into the fictional "American City Bank" in Miami was actually more subtle than what the cartels were doing when they washed their cash through one of Britain's most storied financial institutions.
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.
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. What was the Justice Department's opening offer – asking executives to restrict their Caribbean vacation time to nine weeks a year?
Exhibit B:
www.theguardian.com/uk-news/2013/nov/17/...n-drugs-paul-flowers
The Co-operative Bank's former chairman Paul Flowers could face criminal charges after police said they are investigating claims that he bought drugs including cocaine and crystal meth.
Flowers apologised for his "stupid and wrong" behaviour and said he was seeking professional help after being confronted with a video that showed him counting out £300 in cash in response to a request for "money for the coke".
A West Yorkshire police spokesman said: "We have been made aware of these allegations and we have opened an investigation." He said more details would be released on Monday.
The Mail on Sunday said a friend of Flowers had handed over the footage, purportedly recorded days after he testified to the Treasury select committee about the Co-operative Bank's £700m in losses and its abandoned bid to buy branches of the bailed-out Lloyds Bank. Flowers also asks for "ket" (ketamine) in the video.
Stuart Davies passed on the footage and a series of incriminating text messages after becoming "disgusted by the hypocrisy" of a man who had chaired the anti-drugs charity Lifeline and written columns about the evils of drug use, the Mail on Sunday said.
After being confronted with the material, Flowers, 63, referred to the pressures of his job and dealing with a family bereavement.
"This year has been incredibly difficult, with a death in the family and the pressures of my role with the Co-operative Bank," he said. "At the lowest point in this terrible period I did things that were stupid and wrong. I am sorry for this and I am seeking professional help and apologise to all I have hurt or failed by my actions."
One of the text messages purportedly sent from Flowers to Davies said: "I was 'grilled' by the Treasury select committee yesterday and afterwards came to Manchester to get wasted with friends." In others he said he was on "ket" and had the club drug GHB. Davies said he smoked cannabis with Flowers and witnessed him smoking crack cocaine.
