Matt Taibbi: You Can Go to Prison for Pot, While Big Banks Get Away With Laundering Drug Cartel Cash
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The banking giant HSBC has escaped indictment for laundering billions of dollars for Mexican drug cartels and groups linked to al-Qaeda. Despite evidence of wrongdoing, the U.S. Department of Justice has allowed the bank to avoid prosecution and pay a $1.9 billion fine. No top HSBC officials will face charges, either. We’re joined by Rolling Stone contributing editor Matt Taibbi, author of "Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History." "You can do real time in jail in America for all kinds of ridiculous offenses," Taibbi says. "Here we have a bank that laundered $800 million of drug money, and they can’t find a way to put anybody in jail for that. That sends an incredible message, not just to the financial sector but to everybody. It’s an obvious, clear double standard, where one set of people gets to break the rules as much as they want and another set of people can’t break any rules at all without going to jail."
Amy Goodman: For more on the latest bank scandals, we’re joined by Taibbi. Now, how did Forbes put it, Matt? "What’s a bank got to do to get into some real trouble around here?"
MATT TAIBBI: Exactly, exactly. And what’s amazing about that is that’s Forbessaying that. I mean, universally, the reaction, even in—among the financial press, which is normally very bank-friendly and gives all these guys the benefit of the doubt, the reaction is, is "What do you have to do to get a criminal indictment?" What HSBC has now admitted to is, more or less, the worst behavior that a bank can possibly be guilty of. You know, they violated the Trading with the Enemy Act, the Bank Secrecy Act. And we’re talking about massive amounts of money. It was $9 billion that they failed to supervise properly. These crimes were so obvious that apparently the cartels in Mexico specifically designed boxes to put cash in so that they would fit through the windows of HSBC teller windows. So, it was so out in the open, these crimes, and there’s going to be no criminal prosecution whatsoever, which is incredible.
JUAN GONZÁLEZ: And emails found where bank officials were instructing officials in Iran and in some other countries at how best to hide their efforts to move money into their system?
MATT TAIBBI: Exactly, yeah, and that’s true at HSBC, and apparently we have a very similar scandal involving another British bank, Standard Chartered, which also paid an enormous fine recently for laundering money for—through Iran. This, again, comes on the heels of the Libor scandal, which has already caught up two major British banks—the Royal Bank of Scotland and Barclays. So, you have essentially all of the major British banks now are inveigled in these enormous scandals. We have a couple of arrests, you know, today involving low-level people in the Libor thing, but it doesn’t look like any major players are going to be indicted criminally for any of this.
JUAN GONZÁLEZ: And this whole argument that the bank is too big to indict because of the threat to the world financial system, most people don’t know that HSBC stands for Hong Kong and Shanghai Banking Corporation. It’s a British bank that goes back to the early days of British colonialism in Asia.
MATT TAIBBI: Sure.
JUAN GONZÁLEZ: And is it too big to be indicted?
MATT TAIBBI: The amazing thing about that rationale is that it’s exactly the opposite of the truth. The message that this sends to everybody, when banks commit crimes and nobody is punished for it, is that you can do it again. You know, if there’s no criminal penalty for committing even the most obvious kinds of crimes, that tells everybody, investors all over the world, that the banking system is inherently unsafe. And so, the message is, this is not a move to preserve the banking system at all. In fact, it’s incredibly destructive. It undermines the entire world confidence in the banking system. It’s an incredible decision that, again, is met with surprise even with—by people in the financial community.