HSBC laundered drug money senate inquiry finds.

[Magda Hassan]

Pair hired to clean up Irish banks named in US scandal

THE Government faces huge embarrassment today after two key figures appointed to help clean up the Irish financial system were named in an explosive US investigation into global banking giant
[URL="http://searchtopics.independent.ie/topic/HSBC"]
HSBC[/URL].By Donal O'Donovan and Peter Flanagan
Wednesday July 18 2012



Chairman of state-owned AIB David Hodgkinson, and Michael Noonan's top NAMA adviser Michael Geoghegan, are both named in a 330-page report that follows an investigation into HSBC by a US Senate subcommittee set up in the wake of the 9/11 terrorist attack on New York.
HSBC is accused of "playing fast and loose with US banking rules" between 2004 and 2010 by US Senator Carl Levin, a key ally of US President Barack Obama, who chaired the team that published the report. Top NAMA adviser Michael Geoghegan was HSBC's most senior executive for almost the entire period now under investigation.
The current AIB chairman was the bank's chief operating officer between 2006 and 2008 and before that ran its Middle East business.
Crucially, the damning report makes clear that both Michael Geoghegan and David Hodgkinson were aware of the major issues at the bank during the period under investigation, including HSBC's processing of billions of dollars worth of hidden deals for Iranian banks.
Worryingly, the report puts Mr Hodgkinson at the centre of the controversial practice where Iranian deals were obscured during his term as a senior executive at the banks Middle East unit.
Dubbed "U-turns", these deals saw HSBC alter documents so that money moved between Iran and the US did not arouse suspicion from authorities. The Senate Committee said that in all HSBC conducted almost 25,000 US dollar transactions with Iran, amounting to $19.4bn.
"The vast majority of the Iranian transactions, ranging from 75-90pc over the years, were sent through HBUS (the bank's US operation) and other US dollar accounts without disclosing any connection to Iran," the report states.
In an extraordinary revelation, the report says that when internal efforts were made to stop the practice, Mr Hodgkinson contacted Michael Geoghegan, now the top advisor on NAMA, asking for his "intervention and support".
The report says Mr Hodgkinson got his way, as the Middle East unit was given a free hand or "dispensation" that meant it was free to continue altering Iranian transactions until the end of 2004.
A trawl of emails shows that Mr Geoghegan was told by another executive, John Ranaldi, that the policy amounted to a "fudge" by the bank of the true nature of its dealings, "to avoid the US embargo and seizure".
Last night a spokeswoman for AIB said the bank had no concerns over the case.
"David Hodgkinson is not a person of interest in this inquiry. There is nothing for the bank to consider."
- Donal O'Donovan and Peter Flanagan
Irish Independent