MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT Why Aren't Lawbreaking Bankers Behind Bars?
Matti Taibbi has a devastating piece on how the soon-to-be-departed head of the Department of Justice (DOJ) criminal division, Lanny Breuer, admits that the DOJ won't prosecute banks too big to fail, such as HSBC and UBS β among many others. Why?
Because as Taibbi quotes Breuer: "Our goal here is not to destroy a major financial institution."
Breuer also justified overlooking criminal activity at HSBC (and by implication other banks that have been given fines that amount to slaps on the wrist) with the reasoning that criminal activity must be tolerated to ensure that the international financial/banking system is not disrupted: "Had the U.S. authorities decided to press criminal charges," said Breuer "HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized."
BuzzFlash has written multiple commentaries on the injustice and danger of not prosecuting banks and bank officials who knowingly engaged in fraud, laundering money for terrorist-related banks and individuals, being bankers for drug cartels, and having financial dealing with nations under boycott by the US government (e.g., Iran). But, as we reported and Taibbi reconfirms, the US has a double standard that allows banks who engage in such activity to do so with impunity, while the individuals who are considered terrorists by the executive process, without due process, are targeted for assassination (and are killed along with an unrevealed numbers of collateral damage civilians). Furthermore, Truthout and BuzzFlash at Truthout have documented how the alleged US war on drugs in Mexico has resulted in the deaths of more than 120,000 Mexicans during the six years of the just-ended administration of Mexican President Calderon.
BuzzFlash at Truthout has lacerated the DOJ and regulatory agencies for treating financial firms as if they were the clients of the US executive branch β instead of these executive branch divisions serving the interests of the American people. As far as HSBC, we bluntly headlined a December commentary: "The New 007 License to Kill: HSBC and Big Banks". Prior to that, we posted, "HSBC: Big Bank Executives Not Prosecuted for Narco Blood Money Laundering as Tens of Thousands Die."
In the past few weeks, we have offered commentaries, including: "When US Doesn't Prosecute Wall Street Fraudsters, Taxpayers Get the Blowback"; "Consigliere Lanny Breuer, Head of the DOJ Criminal Division, Leaves Without Prosecuting One Made Man on Wall Street"; "The Covington & Burling Trio Overseeing the Department of Justice Criminal Division: An Injustice"; and "Treasury Approved Bonuses and Raises for Wall Street Bankers Who Tanked Economy," among other BuzzFlash commentaries.
BuzzFlash at Truthout also offered other commentaries on the dangers of the DOJ not criminally big banks and their executives for conducting financial activity that not only could result in a repeat of the cratering of the US and European economies in 2007-8, but also condone financial enabling of terrorism and narcotics trafficking: "The New Untouchables Are Wall Street Executives, Despite Evidence Many Likely Criminally Violated Sarbanes-Oxley Act"; and "Abusive Practices That Shortchange Investors Continue at Bank of America, New Documents Allege."
Taibbi's latest article in "Rolling Stone" provides the worrisome details of how US administrations, including Obama's, have tolerated banks who profit from knowingly engaging in transactions that aid terrorists and narcotics traffickers, providing details that nail the accusation. BuzzFlash at Truthout also documented the illicit banking activity in the commentaries cited above.
Whether one agrees or disagrees with the bi-partisan isolation and boycott of Iran, it is pure hypocrisy to rattle the sabers against the Persian nation while allowing big banks to violate the Trading With the Enemy Act without criminal sanctions.
Here are some of the details, Taibbi provides on HSBC's financial relationship with Iran:
When it wasn't banking for shady Third World characters, HSBC was training its mental firepower on the problem of finding creative ways to allow it to do business with countries under U.S. sanction, particularly Iran. In one memo from HSBC's Middle East subsidiary, HBME, the bank notes that it could make a lot of money with Iran, provided it dealt with what it termed "difficulties" β you know, those pesky laws.
"It is anticipated that Iran will become a source of increasing income for the group going forward," the memo says, "and if we are to achieve this goal we must adopt a positive stance when encountering difficulties."
The "positive stance" included a technique called "stripping," in which foreign subsidiaries like HSBC Middle East or HSBC Europe would remove references to Iran in wire transactions to and from the United States, often putting themselves in place of the actual client name to avoid triggering OFAC alerts. (In other words, the transaction would have HBME listed on one end, instead of an Iranian client.)
For more than half a decade, a whopping $19 billion in transactions involving Iran went through the American financial system, with the Iranian connection kept hidden in 75 to 90 percent of those transactions. HSBC has been headquartered in England for more than two decades β it's Europe's largest bank, in fact β but it has major subsidiary operations in every corner of the world. What's come out in this investigation is that the chiefs in the parent company often knew about shady transactions when the regional subsidiary did not.
What Taibbi emphasizes yet again, as BuzzFlash has been repeatedly doing on its commentary pages, is that there are two standards of justice. The banks get away with what other people are put on a "kill list" for doing, particularly in the area of facilitating terrorism and drug cartels.
If the executive branch and Congress are serious that Al Qaeda and the narco traffickers are a mortal threat to the US, then our own government is endangering our lives by letting banks and their executives knowledgeable about illicit activity escape prosecution.
As Taibbi succinctly puts it, "An arrestable class and an unarrestable class. We always suspected it, now it's admitted. So what do we do?"