Public Citizen activists take on “too big to jail” bank HSBC
The grassroots groundswell against “too big to jail” is growing.
More than 30,000 activists have signed the petition urging Maryland’s attorney general to revoke the corporate charter of HSBC, the massive bank that was fined only about a month’s worth of profits for laundering hundreds of millions of dollars on behalf of alleged terrorists in the Middle East and drug cartels in Mexico and Colombia.
Shamefully, the Justice Department refused to criminally prosecute the London-based banking behemoth, even though the evidence against HSBC — the third largest bank in the world, with more than $2.5 trillion in assets — was overwhelming.
“The U.S. Department of Justice (DOJ) was apparently so frightened by the possibility that criminally prosecuting the third-largest bank in the world would cause the global economy to implode, that it refused to initiate proceedings against the bank for its misconduct,” wrote Micah Hauptman, financial policy counsel for Public Citizen’s Congress Watch, in The Hill. “Instead, the DOJ entered into a deferred prosecution agreement with HSBC, in which the bank admitted to engaging in widespread illegal conduct, paid a relatively insignificant fine and promised never to engage in such conduct again.”
HSBC’s slap on the wrist is a slap in the face to anyone who believes that there should be no such thing as “too big to jail.”
Public Citizen has issued a letter urging Maryland Attorney General Doug Gansler to revoke HSBC’s charter. The US division of HSBC is chartered in the state of Maryland. Under Maryland law, the attorney general has the power to revoke a company’s corporate charter as punishment for engaging in organized crime. Charter forfeiture is a very strong, but too-seldom used, tool that states can use to ensure corporate integrity.
In addition, Public Citizen sent a letter urging the FDIC to revoke HSBC’s deposit insurance and sent FOIA requests to the Department of Justice, Department of the Treasury and the Office of the Comptroller of the Currency seeking the government’s detailed justification for not prosecuting HSBC criminally.
Two things are particularly baffling about the Justice Department’s failure to prosecute HSBC criminally:
First, as part of its “deferred prosecution” deal, HSBC admitted that it engaged in widespread illegal behavior. Second, HSBC’s violations of the law concerned matters purportedly of top priority to the Justice Department — drug trafficking and terrorism. The only thing that saved HSBC was its size.
Public Citizen is not alone in finding this an outrage. Sen. Carl Levin (D-Mich.), for example, summarized the findings of a year-long probe of HSBC’s money laundering with this policy option: “If an international bank won’t police its own affiliates to stop illicit money, the regulatory agencies should consider whether to revoke the charter of the US bank being used to aid and abet that illicit money.”
Meanwhile, lawmakers on both sides of the political aisle, including Sens. Charles Grassley (R-Iowa) and Sherrod Brown (D-Ohio), are calling on the Department of Justice to justify its gentle treatment of financial giants.
No corporation — no matter how vast — should be above the law.
Join Public Citizen’s campaign to hold HSBC accountable. Add your name to the petition to revoke HSBC’s corporate charter.
Rick Claypool is Online Director for Public Citizen’s Congress Watch division. Follow him on Twitter at @RickClaypool.