Finance capital is out of control - how can such entities be meaningfully brought to heel, when they can currently get away with working for terrorists and organised criminals and buying off the politicians and mainstream media?Recent reporting on illegal tax evasion by the world’s second largest bank, HSBC, opens a window onto the pivotal role of Western banks in facilitating organised crime, drug-trafficking and Islamist terrorism. Governments know this, but they are powerless to act, not just because they’ve been bought by the banks: but because criminal and terror financing is integral to global capitalism. Now one whistleblower who uncovered an estimated billion pounds worth of HSBC fraud in Britain, suppressed by the British media, is preparing a prosecution that could blow wide open the true scale of criminal corruption in the world’s finance capital.
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According to whistleblower Nicholas Wilson, HSBC has been integrally involved in a fraudulent scheme to illegally overcharge British shoppers in arrears for debt on store cards at leading British high-street retailers. Without knowing, hundreds of thousands of Britons have been defrauded of a total of one billion pounds worth of money, reveals Wilson, a former debt recovery specialist who uncovered the crimes.
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Most disturbing of all, the story of HSBC’s fraud against British consumers has been systematically ignored by the entire British press. In some cases, purportedly brave investigative journalism outfits have spent months investigating the story, preparing multiple drafts, before inexplicably spiking publication without reason.
To date, the only mainstream coverage Wilson has received was a brief appearance on BBC’s The Big Questions. That is not for want of understanding the story.
The full list of media organisations that have investigated, then spiked, Wilson’s story, despite its unprecedented importance and public interest value, includes BBC Panorama, BBC Newsnight, BBC Moneybox, BBC Radio 5 Live, The Guardian, Private Eye, and most recently, The Sunday Times.
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The threat of legal action is only one part of the explanation for the reluctance of the British media to pursue such critical issues. The other dimension is that HSBC has gone to great efforts to capture as much of the media as it possibly can.
In August last year, HSBC director Rona Fairhead was appointed as chair of the BBC’s board of trustees. Fairhead is currently chair of HSBC’s North America Holdings, and was chair of the audit and risk committee when HSBC was fined by US authorities for money-laundering. Some of the fraud exposed in the Swiss leaks occurred during her watch on the committee. Before her government nomination to the BBC, Fairhead was appointed a British Business Ambassador by Prime Minister David Cameron. Prior to that, she had been a non-executive board director for the UK Cabinet Office under the coalition government.
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HSBC’s effective immunity from meaningful sanction or accountability from government can be gleaned from disclosures in the US about the bank’s systematic complicity in criminal financing involving Islamist terrorism, drug-trafficking, money-laundering, among other things.
As investigative journalist Matt Taibbi wrote in Rolling Stone, the $1.9 billion in fines leveled at HSBC by the US Justice Department was for “the largest drug-and-terrorism money-laundering case ever.” The settlement was a mere slap on the wrist, equivalent to “about five weeks’ profit,” that allowed the bank to completely evade prosecutions.
Yet HSBC had engaged in aiding and abetting murder and terror on a grand scale — because organised crime is exceedingly profitable. Clients requiring criminal services can be charged any rate, allowing for literally fantastical scales of profit.
Much of HSBC’s misdemeanours were documented in an extensive 2012 report by the Senate Permanent Subcommittee on Investigations. Amongst its damning findings was HSBC’s longstanding relationship with Saudi Arabia’s al-Rajhi bank, described by the CIA in 2003 as a “conduit for extremist finance.” US intelligence assessed that al-Rajhi founder Sulaiman bin Abdul Aziz was a member of Osama bin Laden’s ‘Golden Chain’ financiers of al-Qaeda, and had in that capacity pushed al-Rahji bank to find ways to avoid subjecting the bank’s charitable donations to official scrutiny.
In 2003, HSBC was ordered by the US Federal Reserve to cease-and-desist its relationships with clients like al-Rahji. HSBC refused to do so, deceptively ending ties with al-Rahji bank and continuing relations with ‘al-Rahji Trading’ instead. Meanwhile, HSBC continued to engage dodgy clients, racking up dozens of repeated government warnings which it simply ignored. By 2006, the Bush administration canceled the 2003 cease-and-desist order, and HSBC almost immediately provided a billion dollars to al-Rahji. HSBC went on to launder money for Mexican and Colombian drug-cartels, criminal syndicates run out of foreign embassies, and countries under US sanctions like Iran and North Korea.
As Taibbi reveals, though, HSBC senior executives in London headquarters appeared to be fully aware of such activity: “… the chiefs in the parent company often knew about shady transactions when the regional subsidiary did not.” In the words of the Senate report, “HSBC was fully aware of the suspicions that al-Rajhi Bank and its owners were associated with terrorist financing, describing many of the alleged links in the al-Rajhi Bank client profile.”
By 2010, HSBC had racked up a backlog of 17,000 suspicious activity alerts that it had simply ignored. Yet the bank’s standard response when it received its next government cease-and-desist order was simply to ‘clear’ the alerts, and give assurances that everything was fine. According to former HSBC compliance officer and whistleblower Everett Stern, the bank’s executives were deliberately ignoring and violating anti-money laundering regulations. The Senate report found that HSBC had “exposed the US financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks.”
Why did the US government avoid seeking criminal charges and prosecutions against HSBC, despite its unambiguous track record of financial crimes? The explanation of then Justice Department criminal division chief, Lanny Breuer, is telling:
“Had the US authorities decided to press criminal charges, HSBC would almost certainly have lost its banking license in the US, the future of the institution would have been under threat and the entire banking system would have been destabilised.”
Breuer was rewarded amply by Wall Street for his kindness. The following year, he landed a job at his former law firm, Covington and Burling, with a salary of $4 million.
Assuming that it's out of the question to summarily shoot the felonious corrupt greedy bastards, of course.
