June 30, 2014
Deal Making Ahead of Formal BNP Paribas Guilty Plea Underscores Potential Special Treatment for Mega-Banks
Statements by Lisa Gilbert, Amit Narang and Bart Naylor of Public Citizen’s Congress Watch division
Note: Today, BNP Paribas pleaded guilty to criminal charges for violation of sanctions related to trade with Sudan, Iran and Cuba. Below are comments from Public Citizen experts.
“Today BNP Paribas has agreed to plead guilty to processing billions of dollars of illegal transactions on behalf of entities subject to economic sanctions and will pay more than $8.9 billion in penalties. Extensive negotiations regarding the actual punishment BNP Paribas suffers from its guilty plea demonstrate that a separate justice system may continue to prevail at large financial institutions. The public deserves to know details concerning this deal. How did BNP’s size figure in the DOJ’s ultimate decision, and what did American bank regulators advise? Did the DOJ consult with independent experts about systemic risk? A smaller bank that provided illegal transfers to oppressive governments might be shuttered. Many questions remain unanswered, including, how the DOJ concluded that this was inappropriate at BNP but not at other entities.” – Lisa Gilbert, director of Public Citizen’s Congress Watch division
“Though we appreciate the magnitude of the BNP guilty plea, we believe this does not signify the end of ‘too big to jail’ that Attorney General Holder promised several weeks ago. Once again, federal prosecutors decided against the strongest possible punitive measures for egregious criminal activity at a large bank. At this point, it’s hard to imagine federal or state prosecutors taking bold enough action to put an end to the perception that large financial institutions are ‘too big to jail,’ and so we look to Congress to clarify what is actually occurring between regulators and our Justice Department.” – Amit Narang, regulatory policy advocate, Public Citizen’s Congress Watch division
“Again, business continues apace and at profit at one of the world’s largest banks. Requiring the bank to suspend temporarily certain operations represents only a modest penalty. The DOJ introduced too-big-to-jail when it failed to prosecute HSBC. The DOJ has now invented the pain-free guilty plea.” – Bartlett Naylor, financial policy advocate, Public Citizen’s Congress Watch division