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The real scandal

30 December 2013

Matt Taibbi in Rolling Stone:

… 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.”


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.

hsbc-mexico-city-mIt should be pointed out that the major money laundering centers are mostly British dependencies, and the United States — while not as problematic as most countries — is extremely lax when it comes to currency and banking controls.  Mexican banks saved the U.S. banks (Banamex was the only thing that kept Citibank from folding,   and it took some fancy — and rather dubious — legalistic footwork by Agustín Carstens to keep Banamex from being seized and resold as any bank with a foreign government holding a substantial interest is supposed to be, when the U.S. government had to buy Citi’s assets for a time when the U.S. government had to bail out Citi, and ended up being a major stockholder).   And there is some feeling that it was “drug dealers” that kept the rest of the banking industry from complete collapse.  Not even a thank-you note?

The scandal is not the “slap on the wrist” for the British banking giant… it’s the assumption that this crime was committed against the United States… which simultaneously supports both the criminal enterprise and the “war” on that enterprise… costing Mexico untold billions of wasted dollars, and killing at last estimate around 100,000 of its people.  I don’t see the U.S. government even making a token payment of that token payment to those who are the real victims — both here and in Colombia and elsewhere — nor that Latin American will receive any justice from a government set up to meet the needs of “just US”.

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