Lynn Stuart Parramore: Big Banks Can Finance Terrorists and Walk Scot Free

The New York Times reports this week that mega-bank HSBC has escaped criminal prosecution for money laundering that probably funded terrorists and narcotics traffickers. Why? Because regulators and prosecutors were petrified that an indictment would undermine the entire financial system. The Times quotes anonymous government sources who confessed fears about bringing formal charges, because doing so would be a "death sentence" for the bank, so they let it off the hook. That's right, HSBC is officially above the law. Too big to fail has become too big to prosecute. A year long investigation found that the British banking giant had blown right past federal laws by laundering billions of dollars from Mexican drug trafficking and processing banned transactions on behalf of Iran, Libya, Sudan and Burma. A Wednesday Times article serves up vivid passages about the shady goings on, including HSBC officials working closely with Saudi Arabian banks linked to terrorist organizations. According to the report, "the four count criminal information filed in the court, charged HSBC with failure to maintain an effective anti money laundering program, to conduct due diligence on its foreign correspondent affiliates, and for violating sanctions and the Trading With the Enemy Act." In a statement, the bank said it "will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect." HSBC apologized and promised never, ever to do it again, scout's honor. I'm pretty sure I know what would happen to me if I stole a loaf of bread from the corner store. But a big bank can act as financier to freaking terrorists, and never worry about things like jail. Funny how a corporation is a person, until it breaks the law. Senator Carl Levin, chairman of the US Senate Permanent Subcommittee on Investigations, a congressional watchdog panel, observed that "the culture at HSBC was pervasively polluted for a long time."