Two Standards of Justice
Elizabeth Warren: Banks Get Wrist Slaps While Drug Dealers Get Jail
During a Senate Banking Committee hearing about money laundering, Warren (D-Mass.) grilled officials from the Treasury Department, Federal Reserve and Office of the Comptroller of the Currency about why HSBC, which recently paid $1.9 billion to settle money laundering charges, wasn’t criminally prosecuted and shut down in the U.S. Nor were any individuals from HSBC charged with any crimes, despite the bank confessing to laundering billions of dollars for Mexican drug cartels and rogue regimes like Iran and Libya over several years.
Defenders of the Justice Department say that a criminal conviction could have been a death penalty for the bank, causing widespread damage to the economy. Warren wanted to know why the death penalty wasn’t warranted in this case.
“They did it over and over and over again across a period of years. And they were caught doing it, warned not to do it and kept right on doing it, and evidently making profits doing it,” Warren said of HSBC. “How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?”
Elizabeth Warren: Banks Get Wrist Slaps While Drug Dealers Get Jail
How can you teach business ethics with a straight face in this kind of environment? A bank participates in the systematic subversion of a friendly government, makes billions of dollars and is then fined a small proportion of its profits.This is not an
example you want to lead with in an ethics lecture in a business class. In fact, it’s not something you want to think about too hard while trying to make moral decisions. Anybody who uses the nonsensical argument, “Everybody does it,” just got enough ammunition for years of abuse. What are the rest of us supposed to do?
We could start by marveling at the idea that any rational human being could contemplate a fine as a penalty for international subversion? This subversion involved laundering money so it could be used anywhere in the economic system, thus, making it available to pay for bribes, drug smuggling, murder and kidnapping.
We could wander casually over to our second problem which is bankers, especially the international and investment variety, and wonder what made them so special? It is a simple matter to document one law for them and one law for the rest of us. That is the why Ms. Warrent’s example hits home. We are living by two sets of laws, one harsh and punitive and another for the banks.
Let us conclude with out third problem, where do get off allowing banks to attack foreign governments? Can there be any doubt in anyone’s mind that laundering billions in drug cartel money is the equivalent of a direct attack on the nation of Mexico and a more minor, by comparison, attack on this country, the United States?
It might be better if instead of thinking of the HSBC bank as a financial institution but more as a hostile foreign power willing to exploit our financial system for profit. I believe that is a more accurate reading of how it views its status in the world.
I don’t think Mexico feels safer after we fined HSBC. They may not feel that we have sent a message to those who would empower those who actively kidnap and murder in their country?
How would you feel about this if you lived in Mexico? Does it make you feel secure in American protection anywhere on earth?
James Pilant
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