Punish Bankers Who Violate the Law Alex Ferreras - McClatchy Newspapers
go to original July 26, 2012

A recent Senate report on money laundering through U.S. banks and their foreign affiliates raises serious questions about bankers who, for the sake of profits, worked to circumvent U.S. law and help America’s enemies. That’s a criminal action worthy of full-scale prosecution.

A 340-page report released last week by the Senate Homeland Security and Governmental Affairs Committee outlines a long list of shocking actions by the international banking group HSBC, based in London. The report details billions of dollars in bank transactions that may have financed terrorist groups, the Iranian government and Mexican drug cartels. HSBC officials have acknowledged major lapses and apologized.

The findings help explain the difficulties faced by the United States and other governments in blocking Iran’s ability to finance research into weapons-grade uranium enrichment. Similarly, it shows why the financial empire of major Mexican cartels keeps growing and how drug lords continue to repatriate billions of dollars from their U.S. markets.

U.S. anti-money-laundering laws were strengthened after the 9/11 attacks because of evidence that al-Qaeda had used secret offshore bank accounts to funnel funds to its operatives. U.S. Treasury monitors have cited HSBC, which has $2.5 trillion in assets, 89 million customers and 300,000 employees, for failing to address a “massive backlog” of 17,000 suspicious-activity alerts, the Senate report said.

The bank’s affiliates completed an estimated $15 billion in bulk cash transactions through accounts that, the report said, should have been monitored as suspicious. For example, an HSBC affiliate in Mexico was known to offer offshore bank services to clients deemed high-risk because of their questionable income sources. The clients’ money passed repeatedly through Mexican money-exchange houses and U.S. money-service businesses.

Instead of investigating, the Mexico affiliate of HSBC assisted clients in processing the funds through secret dollar accounts in the Cayman Islands. In 2007 and 2008, $7 billion passed through HSBC-affiliated operations despite concerns raised by U.S. and Mexican authorities that such “bulk cash shipments could reach that volume only if they included illegal drug proceeds,” the report said.

The Treasury Department’s Office of Foreign Assets Control was tasked with helping banks install filters to identify and halt banned transactions by countries under sanction, such as Iran, North Korea and Sudan. The report says HSBC affiliates “systematically altered transaction information” to evade those filters. An HSBC audit found 28,000 sensitive transactions from 2001 to 2007, valued at $19.7 billion, that should have been disclosed to regulators but were not.

The typical response would be to levy stiff fines and warn HSBC to sin no more. But banks are made up of actual human beings, who either made conscious decisions to help America’s enemies or simply chose to ignore their suspicious activities. Those individuals must not escape legal accountability.

We invite you to add your charity or supporting organizations' news stories and coming events to PVAngels so we can share them with the world. Do it now!