Best of the Week
Most Popular
1.London House Prices Bubble, Debt Slavery, Crimea 2.0 - Russia Ukraine Annexation - Nadeem_Walayat
2. Gold And Silver – 2014 Coud Be A Yawner; Be Prepared For A Surprise - Michael_Noonan
3.Sheffield, Rotherham Roma Benefits Plague, Ch5 Documentary Gypsies on Benefits & Proud - Nadeem_Walayat
4.Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - Jim_Willie_CB
5.Don't Miss the Boat on Big Biotech Catalysts: Keith Markey - Keith Markey
6.Gold Prices 2014: Do What Goldman Does, Not What It Says - David Zeiler
7.Bitcoin Price Strong Appreciation to Be Followed by Declines? - Mike_McAra
8.Gold Preparing to Launch as U.S. Dollar Drops to Key Support - Jason_Hamlin
9.Doctor Doom on the Fiat Money Empire Coming Financial Crisis - Andrew_McKillop
10.The Real Purpose Of QE - It’s Not Employment - Darryl_R_Schoon
Last 72 Hrs
America has Become a Police State - 19th Apr 14
Elite Herd Psychology And War By Default - 19th Apr 14
E.U. Officially Adopts the Bank Depositors Bail-In - 19th Apr 14
Goldman Sachs Is Highly Motivated To Low-Ball Gold Price - 19th Apr 14
Save MtGox - Bitcoin Important Implications of Going Down - 19th Apr 14
Stock Market SPX Topping Valuations - 19th Apr 14
Tesco Profits Panic! Back to Back £5 Off £40 Shop Voucher Promotions - 18th Apr 14
The Obama Game - Is Putin Being Lured Into a Trap? - 18th Apr 14
The Growing Threat to Capitalism - 18th Apr 14
Build Biotech Wealth on Solid Platforms - 18th Apr 14
Has Solar Power Finally Arrived? - 18th Apr 14
Bank Depositor Bail-Ins and Real Assets vs Liability-Based Assets - 18th Apr 14
10 Ways to Screw up Your Retirement - 17th Apr 14
One of Harry Dent’s Three Keys to Market Prediction is Cycles - 17th Apr 14
Obamacare Proof Stocks - 17th Apr 14
Gold, Silver And The Mining Sector: Prepare For A Severe Fall - 17th Apr 14
Hidden Australian Life Sciences Bio-tech Growth Stocks - 17th Apr 14
Disrupting Big Data Status Quo - 17th Apr 14
What the Stock Market Bears Have Been Waiting for... - 17th Apr 14
Copper Is Pathological and Suffers from SAD, but It Has Value - 17th Apr 14
Old World Order New World Order, Chaos And Change - 17th Apr 14
Even The US Government Will Abandon the U.S. Dollar - 17th Apr 14
Gold - Coming Super Bubble - 17th Apr 14
Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - 16th Apr 14
High-Frequency Insider Trading - 16th Apr 14
Gold Prices 2014: Do What Goldman Does, Not What It Says - 16th Apr 14
These CEOs Will Make Investors Rich - 16th Apr 14
Climate Change, Central Banking And The Faustian Bargain - 16th Apr 14
Every Central Bank for Itself - 16th Apr 14
Social Security, U.S. Treasury Stealing Every Last Penny From Americans - 16th Apr 14
Ukraine Falling to Economic Warfare and Its Own Missteps - 16th Apr 14
Silver and Gold Miners Still Disappoint - 16th Apr 14
Silver, Gold, and What Could Go Wrong - 15th Apr 14
How I Intend to Survive the Meltdown of America - 15th Apr 14
France Wakes Up To The Multicultural Multi-Threat - 15th Apr 14
The Real Purpose Of QE - It’s Not Employment - 15th Apr 14
Peak Coal - 15th Apr 14
Flash Crash, Rigged Markets - What’s the Frequency Zenith? - 15th Apr 14
Forecasting U.S. GDP Growth: A Look at WSJ Economists’ Collective Crystal Ball - 15th Apr 14
Stock Market - Is Something Nasty About to Happen? - 15th Apr 14
How to Trade Your Way To Freedom - 15th Apr 14
Understanding (and Ignoring) the Media Bandwagon Against Gold - 15th Apr 14
When Stock Market Bubble Crashes, Take Refuge in Gold Stocks - 15th Apr 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

HSBC, the “favourite” Bank of Mexican Drug Cartel, Above-the-Law Global Banking Cartel

Politics / Banksters Dec 14, 2012 - 04:53 AM GMT

By: Andrew_G_Marshall

Politics

In what the New York Times declared as a “dark day for the rule of law” on December 11, 2012, HSBC, the world’s second largest bank, failed to be indicted for extensive criminal activities in laundering money to and from regimes under sanctions, Mexican drug cartels, and terrorist organizations (including al-Qaeda). While admitting culpability, and with guilt assured, state and federal authorities in the United States decided not to indict the bank “over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.” Instead, HSBC agreed to pay a $1.92 billion settlement.


The fear was that an indictment would be a “death sentence” for HSBC. The U.S. Justice Department, which was prosecuting the case, was told by the U.S. Treasury Department and the Federal Reserve that taking such an “aggressive stance” against HSBC could have negative effects upon the economy. Instead, the bank was to forfeit $1.2 billion and pay $700 million in fines on top of that for violating the Bank Secrecy Act and the Trading with the Enemy Act. In a statement, HSBC’s CEO stated, “We accept responsibility for our past mistakes… We are committed to protecting the integrity of the global financial system. To this end, we will continue to work closely with governments and regulators around the world.” With more than $7 billion in Mexican drug cartel money laundered through HSBC alone, the fine amounts to a slap on the wrist, no more than a cost-benefit analysis of doing business: if the ‘cost’ of laundering billions in drug money is less than the ‘benefit,’ the policy will continue.

As part of the settlement, not one banker at HSBC was to be charged in the case. The New York Times acknowledged that, “the government has bought into the notion that too big to fail is too big to jail.” HSBC joins a list of some of the world’s other largest banks in paying fines for criminal activities, including Credit Suisse, Lloyds, ABN Amro and ING, among others. The U.S. Assistant Attorney General Lanny A. Breuer referred to the settlement as an example of HSBC “being held accountable for stunning failures of oversight.” Lanny Breuer, who heads the Justice Department’s criminal division, which was responsible for prosecuting the case against HSBC, was previously a partner at a law firm (along with the U.S. Attorney General Eric Holder) where they represented a number of major banks and other conglomerates in cases dealing with foreclosure fraud. While Breuer and Holder were partners at Covington & Burling, the firm represented notable clients such as Bank of America, Citigroup, JP Morgan Chase and Wells Fargo, among others. It seems that at the Justice Department, they continue to have the same job: protecting the major banks from being persecuted for criminal behaviour.

With a great deal of focus on the $1.9 billion in fines being paid out by HSBC, little mention was made of the fact that HSBC had roughly $2.5 trillion in assets, and earned  $22 billion in profits in 2011. But not to worry, HSBC’s  executive said that they “accept responsibility for our past mistakes,” and added: “We have said we are profoundly sorry for them, and we do so again.” So not only did the executives of the world’s second largest bank apologize for laundering billions in drug money (along with other crimes), but they apologized… again. Thus, they pay a comparably small fine and face no criminal charges. I wonder if a crack dealer from a ghetto in the United States could avoid criminal prosecution if he were to apologize not once, but twice. Actually, we don’t have to wonder. In May of 2012, as HSBC executives were testifying before the U.S. Senate in Washington D.C., admitting their role in drug money laundering, a poor black man was convicted of peddling 5.5 grams of crack cocaine just across the river from the U.S. Capitol building, and he was given 10 years in prison.

Back in August the bank stated that they had put aside $700 million to pay fines for illegal activities, which conveniently was the exact amount they were fined by the U.S. Justice Department (not including the forfeiture of profits). Lanny Breuer declared the settlement to be “a very just, very real and very powerful result.” Indeed, one could agree that the results are “powerful” and “very real,” in that they provide a legal state-sanctioned decision that big banks will not be persecuted for their vast criminal activities, precisely because they are big banks. The “very real” result of this is that we can guarantee that such criminal behaviour will continue, since the banks will continue to be protected by the state. With news of the settlement, HSBC’s market share price rose by 2.8%, a clear sign that “financial markets” also reward criminal behaviour and the “pervasively polluted” culture at HSBC (in the words of the U.S. Senate report).

Jack Blum, a Washington attorney and former special counsel for the Senate Foreign Relations Committee who specializes in money laundering and financial crimes stated that, “If these people aren’t prosecuted, who will be?” He further asked: “What do you have to do to be prosecuted? They have crossed every bright line in bank compliance. When is there an offense that’s bad enough for a big bank to be prosecuted?” But the Justice Department’s Lanny Breuer explained that his department had to consider “the collateral consequences” of prosecutions: “If you prosecute one of the largest banks in the world, do you risk that people will lose their jobs, other financial institutions and other parties will leave the bank, and there will be some kind of event in the world economy?”

In other words, the U.S. Justice Department decided that big banks are above the law, because if they weren’t, there would be severe consequences for the financial system. And this is not just good news for HSBC, the “favourite” bank of Mexican drug cartels (according to Bloomberg), but it’s good news for all banks. After all, HSBC is not the only bank engaged in laundering drug money and other illegal activities. Back in 2010, Wachovia (now part of Wells Fargo) paid roughly $160 million in fines for laundering some $378.4 billion in drug money. Drug money has also been found to be laundered through other major financial institutions, including Bank of America, Banco Santander, Citigroup, and the banking branch of American Express. Nearly all of the world’s largest banks have been or are currently being investigated for other crimes, including rigging interest rates (in what’s known as the Libor scandal), and other forms of fraud. Among the banks being investigated for criminal activity by U.S. prosecutors are Barclays, Deutsche Bank, Citigroup, JP Morgan Chase, Royal Bank of Scotland, UBS, Bank of America, Bank of Tokyo Mitsubishi, Credit Suisse, Lloyds, Rabobank, Royal Bank of Canada, and Société Générale, among others. Regulators and investigators of the Libor scandal – “the biggest financial scandal ever” – report that the world’s largest banks engage in “organized fraud” and function like a “cartel” or “mafia.”

The pervasive criminality of this “international cartel” is so consistent that one commentator with the Guardian has referred to global banks as “the financial services wing of the drug cartels.” But indeed, where could be a better place for drug cartels to deposit their profits than with a financial cartel? And why would banks give up their pivotal role in the global drug trade? While the pharmaceutical drug industry records annual revenues in the hundreds of billions of dollars (which is nothing to ignore), the global trade in illicit drugs, according to the United Nations Office on Drugs and Crime, amounted to roughly 2.3-5.5% of global GDP, around $2.1 trillion (U.S.) in 2009. That same year, the same United Nations office reported that billions of dollars in drug money saved the major global banks during the financial crisis, as “the only liquid investment capital” pouring into banks. Roughly $325 billion in drug money was absorbed by the financial system in 2009. It is in the interest of banks to continue profiting off of the global drug trade, and now they have been given a full green light by the Obama administration to continue.

Welcome to the world of financial criminality, the “international cartel” of drug money banks and their political protectors. These banks not only launder billions in drug money, finance terrorists and commit massive fraud, but they create massive financial and economic crises, and then our governments give them trillions of dollars in bailouts, again rewarding them for creating crises and committing criminal acts. On top of that, we, the people, are handed the bill for the bailouts and have to pay for them through reduced standards of living by being punished into poverty through ‘austerity measures’ and have our labour, resources, and societies exploited through ‘structural reform’ policies. These criminal banks dominate the global economy, and dictate policies to national political oligarchies. Their greed, power, and parasitic nature knows no bounds.

The fact that the Justice Department refused to prosecute HSBC because of the effects it could have on the financial system should be a clear sign that the financial system does not function for the benefit of people and society as a whole, and thus, that it needs to be dramatically changed, cartels need to be destroyed, banks broken up, criminal behaviour punished (not rewarded), and that people should dictate the policies of society, not a small network of international criminal cartel banks.

But then, that would be rational, so naturally it’s not even up for discussion.

For a more detailed analysis of the criminal activities of the “international cartel” of banks, which scientists have referred to as a “super-entity”, see: “The Global Banking ‘Super-Entity’ Drug Cartel: The “Free Market” of Finance Capital.”

If your money isn’t being laundered through a cartel, please consider making a donation to The People’s Book Project, so that I can continue analyzing and exposing the activities and institutions of this cartel.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.

I am a 24 year old independent researcher and writer based out of Montreal, Canada. I have written dozens of articles, essays, and reports online and in print on a wide array of social, economic, and political issues, always from a highly critical perspective. My writing can be found on my blog, www.andrewgavinmarshall.com. I am Project Manager of The People's Book Project (www.thepeoplesbookproject.com), an initiative through which I am attempting to write a comprehensive book on the institutions and ideas of power in our world, and what we can do about it.

© 2012 Copyright Andrew Gavin Marshall - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014