HSBC Under Multiple Investigations
for Drug Money Laundering
July 12, 2012 (EIRNS)—This release was issued today by the Lyndon LaRouche Political Action Committee.
Today, the Financial Times, the same newspaper, which has launched a campaign to return to Glass-Steagall, revealed on page 1 that HSBC will appear before a U.S. Senate investigative hearing on July 17 and that, in advance of that hearing, the CEO of HSBC, Stuart Gulliver, has released an internal memo to staff saying:
"Between 2004 and 2010, our anti-money laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behavior." He said it was "right that we be held accountable and that we take responsibility for fixing what went wrong."
The Financial Times reports that HSBC may face $1 billion in fines, which is more than the $619 million that the Dutch bank ING agreed to pay to settle accusations that it violated US sanctions by helping Iranian and Cuban companies move billions of dollars through the U.S. financial system. Gulliver warned that HSBC was likely to face further action from other U.S. authorities in coming months.
According to the Financial Times, Irene Dorner, chief executive of HSBC's North American business, and at least one other senior executive are expected to testify. The full list of witnesses will be available on Friday, July 13.
The title of the hearing scheduled by the Senate Committee on Homeland Security and Government Affairs' Permanent Subcommittee on Investigations is "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History." The Subcommittee reports that it
"plans to hold a hearing on the money laundering and terrorist financing vulnerabilities created when a global bank uses its U.S. affiliate to provide U.S. dollars, U.S. dollar services, and access to the U.S. financial system to high-risk affiliates, high-risk correspondent banks, and high-risk clients, using HSBC as a case study."
The ThisIsMoney.co.uk website reports that the Senate probe has lasted months. In addition, HSBC is under investigation by the U.S. Securities and Exchange Commission and the U.S. Department of Justice. Another probe by the U.S. Federal Reserve and Office of the Comptroller of the Currency found that there was significant potential for unreported money laundering or terrorist financing.
HSBC is reportedly also under investigation for its involvement in the Libor rate-fixing scheme.
HSBC's involvement in drug money laundering also has implications for the Obama administration. In December 2011 the New York Times reported on the Department of Justice's involvement in drug money laundering. Immediately, the House Oversight and Government Reform Committee, which is investigating Operation Fast and Furious, announced that it was going to expand its investigation of gunwalking to the Mexican Sinaloa drug cartel to now include drug money laundering, but the Department of Justice refused to cooperate.
The same Lanny Breuer who is implicated in gunwalking also was involved in letting Wachovia Bank off with a slap on the wrist after it had been established that it was laundering drug money for the same Sinaloa cartel. HSBC then moved in to take over the drug money laundering activity of the cartel under the watchful eye of the Obama administration.
The question posed by Lyndon LaRouche is, how much of the drug money was funneled into the 2008 Obama Presidential campaign?
A serious investigation would have to explore the relationship between gunwalking and drug money laundering, and whether there was a deal between the Obama campaign and the drug cartel to launder funds into the campaign.