HSBC Settlement Proves Drug War is a Joke
Matt Taibbi details in Rolling Stone magazine the brazenly unfair slap on the wrist the financial giant received for laundering drug cartel money.
In today’s “drug war” climate, drug defendants regularly receive long and harsh prison sentences for minor crimes. For international banking giant HSBC, however, the punishment for engaging in serious and far-reaching drug-related crime is tantamount to a slap on the wrist.
In the most recent issue of Rolling Stone, Matt Taibbi details how HSBC admitted to laundering billions of dollars of cartel- and terrorist-related drug money and violating many international banking laws. But instead of receiving an appropriate punishment, the bank settled with the justice department for $1.9 billion, or about five weeks’ worth of income for the bank.
While people like Sandra Avery are serving life sentences for crimes involving less than two ounces of crack, HSBC executives who were involved in laundering drug money from Mexican drug cartels and terrorist organizations are having their bonuses partially deferred. The justification for the light punishment? Any criminal indictment which would send these executives to jail might destabilize the financial system.
The bank’s drug money laundering procedures were so obvious that they must not have been concerned with the law. In addition to dealing with “Saudi Arabian terrorists, Mexican drug cartels and rogue regimes in North Korea and Cuba,” transgressions for which they had to “apologize” to a senate subcommittee, they also allowed drug dealers to use custom designed boxes that fit the bank teller windows perfectly in order to move as much money as possible as quickly as possible into HSBC. As Taibbi points out, Tony Montana’s minions moving dufflebags full of cash in Miami was less obvious than the HSBC transactions.
If this really were a fair playing field, Taibbi writes, then all of HSBC’s illegally gained money would be taken and all of the people involved would be thrown in jail. That is exactly what happens to a regular guy who is found with too much money. If police find a substantial sum of money in your car, they can seize it with the justification that you were probably on your way to buy drugs with it. They offer you a choice: forfeit the money or face money laundering and drug charges. It’s big business for the justice department. In 2010, government accounts received almost $1.8 billion in forfeiture money.
We’ve known for a long time that the drug war is ineffective at best, and very harmful at worst. The HSBC case is just the latest example in a “war” that seems designed to help the rich get richer while imposing increasingly cruel punishments on the poor and disenfranchised.