The "FinCen files" story reveals: getting caught doesn't stop banks from taking dirty money. It may even encourage them
An excellent piece, Matt, and good example of what we all pay for each month.
I saw that Wall Street on Parade also picked up this story. They've done great work for years on banking/Wall Street corruption.
This is more evidence -- if we needed any more after the 08/09 debacle, which we don't -- of the culturally toxic effect of "too big to fail or jail" banks. If banks were smaller & more numerous they'd have a harder time buying politicians, and regulators could regulate effectively and shut them down without any excuse. If it came to it, regulators could:
1. fire all senior management,
2. fire the board
3. retain the workforce to the extent possible (in many cases it would be).
4. recapitalize the bank
5. re-open under a new name or merge with another bank if the combined bank would remain small enough.
If any bank's activity breached criminal thresholds, then prosecute whatever executives deserve it. Banks can afford good lawyers who should be able to keep honest bankers out of trouble. I'm not one who supports lynch mobs or malicious prosecutions. The laws should be made so clear that not even a greedy fool could make a mistake and do something illegal. Therefore, if illegality occurs, it has to be premeditated and willful.
I think the record at this point is clear as day -- the alleged "economic efficiencies" created by "systemically important" big banks are efficiencies for their politician friends (many of whom are Democrats who seem fond of social justice posturing as a diversion), big corporations, and bad actors only, not for Main Street or American society -- if we even have one anymore. Restore Glass-Stegal. End Too Big to Fail or Jail. Make America Great Again! [I had to throw in the last one for fun. hahaha. But there could be some causative truth in this context.].
What’s to be surprised about here. First, this is exceptional journalism and I applaud the effort to uncover these schemes. However, we know the system is rigged against the little guy and will continue to be so until a reset occurs starting with the FED. I mean I deduct my office space on my taxes and the IRS is calling me in to audit a few thousand dollars of a legitimate write-off. That’s how screwed up the system is.
Matt - Is it possible giving banks a mandate to investigate was a bad idea in the first place? They were never meant to do more than take deposits and extend loans. Expecting them to monitor their clients feels analogous to how FB & Twitter censor their users to stay in good graces with the government. The whole thing feels like law enforcement & legislative authorities passing the buck so they have a whipping boy when the inevitable happens and companies put profits over everything else.
Unfortunately the politicians in a position to change this corrupt system are part of the problem. They all take money from the wealthy people who benefit from this greed. When the oligarchs, Wall Street titans and politicians who benefit most from this corruption end up in real jail, not country club jail, this will end. It is possible to jail the CEO, leading executives and the corporate board of HSBC without ending HSBC as an institution. These folks are criminals. They deserve prison and I'm betting they wouldn't like it much at all. They are no better than the thugs who steal your car, beat their wife or rob your bank. Let's give them equal treatment.
In the 2008 financial crisis, I was a fairly staunch libertarian 21 year old. Seeing the banks get bailed out was one of the biggest slaps in the face and probably the first major wake up call in my political memory. While I’m far less libertarian now, I still wish everything had been burnt to the ground back then. Unfortunately, nothing will change until our entire fake economy collapses.
The pretense of justice is worse than the laundering.
The recent stories on money laundering that I've read all seem to take for granted how the vast majority of that money was accrued: through the global trade in prohibited substances. The result is to underplay the institutional framework that has made money laundering such a lucrative business: Zero Tolerance Drug Prohibition, a policy ostensibly intended for the purpose of "control" that in practice more resembles a platform to enable "no control": lawlessness and impunity.
The last time I checked, the global market in prohibited substances was larger than any other international trade commodity other than oil and weapons. As McGill Economics Professor R. T. Naylor pointed out as far back as the early 1980s, within a period of a few short years, the annual world balance of trade had shifted from roughly zero- i.e., with all exchanges accounted for- to a deficit of around $110 billion, or 10% of the global trade in that era.
I recommend Naylor's book Hot Money and the Politics of Debt for more on that subject; the 1987 edition is good, but the 1994 edition contains the best summary of the financial machinations of the Iran-Contra affair that I've run across. (I haven't read the 2004 edition.) https://books.google.com/books/about/Hot_Money_and_the_Politics_of_Debt.html?id=z9C5bA5xN84C
If I recall correctly, the Ukrainian government nationalized PrivatBank in order to protect the deposits of millions of Ukrainian citizens. After taking over the bank, outside auditors discovered approximately 5.5 Billion USD missing. Isn't it interesting that during the previous 8 years of the Obama administration, Vice-President Biden was the "point-man" for the Ukraine while Kolomoisky was using Delaware front men to purchase properties in the United States. (Can anyone guess which state Biden represents in the Senate?). Also noteworthy is that a lot of aid from the US and the IMF was deposited in PrivateBank. Could it be that US aid money sent to the Ukraine was used to buy rusted out factories in the US? Just wondering.
It’s kind of insane that you can go to prison for life in some states for being caught three times with heroin on you, but if you’re the CEO of a corporation that launders billions of dollars worth of drug money and get caught over and over again, you get nothing.
Okay, let’s be fair, maybe not nothing. Maybe you defer that multi-million dollar bonus you didn’t really even need for a few months and have your lackeys make up some bullshit about how you had no idea this was happening. Or possibly it’s so egregious that you are forced to take that multi-million dollar golden parachute out the door. Maybe though, fucking horror, you get the boot out of the company with nothing! Holy shit what a punishment! Talk about harsh! You head home to your mega mansion in Connecticut to complain to your maid about how life isn’t fair while taking offers from your buddies for a lower profile job that still throws millions at you.
Whoa though, let’s not get into class warfare right? I mean, that guy that did heroin was a real fucking blight on society.
There is much suspicion regarding the reporting of the ICIJ. There were almost -0- consequences from the Panama Papers, and there will not be from this. These leaks have the feeling of "limited hangouts" or propaganda to demonstrate the vast powers of the oligarchy and why resistance is futile.
Your characterization of HSBC as a "European" bank while maybe technically correct in reality the Hong Kong and Shanghai Banking Company is a legacy institution of the British empire.
HSBC is also involved in the case of the Huewei executive kidnapped in Canada providing entrapping evidence to Western authorities.
These stories are just propaganda distractions without much consequence.
The lords of banking and industry are just a form of hoodlum, thug criminals. The USG provides protection and actually supports the cartels in Mexico, 95% of the worlds opium comes out of Afghanistan protected by CIA contractors. The oligarchs that own Exxon also own the opium trade and in fact most of global organized crime, they are the same people. It is THERE money, it belongs to oligarchs no different from Gates or Buffet.
Do you think it was some mistake that the US military was held back from attacking the Taliban until they fully destroyed the opium trade, then moved in to push them out and start the trade all over again with them as the full owners. This is what the US military does every day - protect and expand the power of the oligarchs.
The meeting you talk about at first was nothing more than a planning session on how to proceed, it was never intended for any other purpose. We live in a feudal culture, society and civilization.
I still don't understand why individual actors cannot be arrested. As far as I am aware, there is no law or immunity clause that prohibits that. If an investigation reveals that a bank employee or employees from the loan officer on up to the top floor were aware of and/or facilitated the money laundering, why aren't they be arrested on criminal charges? Seems to me that would be a simple fix without bringing down big banks, which could disrupt economies.
What was that quaint old saying that applies here? Let me see...what was it?
Oh yeah, Crime Doesn't Pay.
What a hoot.
I wish this was shocking.
Luckily for all involved most news is dissecting every fart & burp out of Trump's orifices so I suspect that this news item will get very little air time.
"Divide & conquer" is a much better 21st "news" strategy than "Hey those respectable rich bankers are in bed with drug cartels."
"There’s an incentive for banks to cycle through creative ways of looking like they’re engaging in compliance, without actually doing so."
So basically, it's money-laundering laundering.
Next year will mark the 30 year anniversary of when I was first made aware of how the banks willingly launder money for drug cartels. It saddens me that nothing has changed.
I would think that writing of this as you do on a regular and on going basis would tend to depress as you essentially simply write about the same thing over and over with some name changes and the amounts getting larger and larger.
Some poor pothead pulled over on a tail light violation could have his auto confiscated bec of some stray white dust particles. Or whatever. What’s good for the goose is good for the gander. Minimum: Confiscate the “$2 trillion in suspicious transactions“ or leave the poor pothead alone.