HSBC damaged by publication of UK tax avoidance scheme

[David Guyatt]

In response to this breaking news - another crooked bank in action - HSBC has responded by saying that it had now changed its practices.

Oh, okay, that's alright then. Not even a botty will get smacked. Even though the whistleblower got sacked and said these practices continued through 2013.

Move along folks, nothing to see here. Not even a "double standard."

HSBC accused of helping 7,000 to avoid paying tax: Investigation finds bank used Swiss operation to help clients shield what they were really worth

• Offshore accounts are not illegally but often used to hide earnings
  
• Account details stolen by a hacker in 2007 were given to HMRC in 2010
  
• HSBC says it's now cut the number of Swiss accounts by nearly 70%
  

By FRANCESCA INFANTE FOR THE DAILY MAIL and COREY CHARLTON FOR MAILONLINE
PUBLISHED: 23:05, 8 February 2015 | UPDATED: 07:15, 9 February 2015



+2
Probe: HSBC is alleged to have helped wealthy customes hide their cash and assets from the government to avoid paying their full tax bills

HSBC helped 7,000 wealthy Britons avoid millions of pounds in tax by using secret 'black' accounts, it was alleged today.
A BBC Panorama investigation claims the bank routinely used its operations in Switzerland to help clients shield their true value from the taxman and offered tips on how they could stay one step ahead of the law.
The programme, which will air on BBC1 tonight, has seen thousands of leaked accounts showing how bankers helped clients nearly 7,000 of them British to avoid taxes.
Offshore accounts are not illegal but they are often used as a way of hiding earnings from HM Revenue and Customs.
Some account details were stolen by a computer hacker in 2007 and were presented to HMRC in 2010.
The banking documents which form the expose have now become the biggest banking leak in history, The Guardian reported.
Among them are the revelations HSBC's Swiss bank allowed its clients to withdraw bricks of cash, allowed clients to conceal undeclared 'black accounts' and gave accounts to criminals and corrupt businessmen.
The documents show royalty were among those who benefited from the operation, as well as relatives of dictators and people implicated in cases of African corruption.
In one example, HSBC's Swiss bankers were prepared to help Emmanuel Shallop - a man later convicted of dealing in blood diamonds, the paper reported.
Around 1,100 people who had not paid what they should have done were identified, but almost five years later only one person has been prosecuted.
HMRC says that £135million in tax, interest and penalties has now been paid by those who hid their assets in Switzerland.
[B]RELATED ARTICLES[/B]

• Tories promise business a £10billion boost as party seeks to...BBC set to name businessmen who have put their cash in Swiss...
  

But Labour MP Margaret Hodge, chairman of the Commons public accounts committee, says they still need to be much tougher with those who seek to avoid tax.
She said: I just don't think the tax authorities have been strong enough, assertive enough, tough enough in securing for the taxpayer the monies that are due.'
HSBC claims that since the documents were leaked, it has radically overhauled its private banking business and reduced the number of Swiss accounts by almost 70 per cent since 2007.


+2
HSBC HQ in Canary Wharf: The bank claims that since the documents were leaked, it has overhauled its private banking business and reduced the number of Swiss accounts by almost 70 per cent since 2007

The man in charge of HSBC at the time, Stephen Green, was made a Conservative Peer and appointed to the government.
Lord Green was made a Minister eight months after HMRC had been given the leaked documents from his bank. He served as a Minister of Trade and Investment until 2013.
Lord Green told Panorama: As a matter of principle I will not comment on the business of HSBC past or present.'
But Panorama spoke to a whistleblower who said HSBC had still failed to implement changes when she worked there in 2013.
Sue Shelley, who was the private bank's head of compliance in Luxembourg, said: The verbal messages were great but they weren't put into practice.'
She was sacked after raising concerns and an unfair dismissal tribunal ruled in her favour.

[David Guyatt]

Blimey! This is news. The Guardian does a news story justice.

Does this mean that it's news aversion policy is changing?

HSBC files show how Swiss bank helped clients dodge taxes and hide millions

• [*=left]Part 1The leak
  [*=left]Coming MondayThe cash machine
  

HSBC files: how secret Swiss account data detailing misconduct came to light

David Leigh,James Ball,Juliette Garsideand David Pegg
Sunday 8 February 201521.00 GMT

HSBC's Swiss banking arm helped wealthy customers dodge taxes and conceal millions of dollars of assets, doling out bundles of untraceable cash and advising clients on how to circumvent domestic tax authorities, according to a huge cache of leaked secret bank account files.
The files obtained through an international collaboration of news outlets, including the Guardian, the French daily Le Monde, BBC Panorama and the Washington-based International Consortium of Investigative Journalists reveal that HSBC's Swiss private bank:
Routinely allowed clients to withdraw bricks of cash, often in foreign currencies of little use in Switzerland.
Aggressively marketed schemes likely to enable wealthy clients to avoid European taxes.
Colluded with some clients to conceal undeclared "black" accounts from their domestic tax authorities.
Provided accounts to international criminals, corrupt businessmen and other high-risk individuals.
The HSBC files, which cover the period 2005-2007, amount to the biggest banking leak in history, shedding light on some 30,000 accounts holding almost $120bn (£78bn) of assets.
The revelations will amplify calls for crackdowns on offshore tax havens and stoke political arguments in the US, Britain and elsewhere in Europe where exchequers are seen to be fighting a losing battle against fleet-footed and wealthy individuals in the globalised world.
Approached by the Guardian, HSBC, the world's second largest bank, has now admitted wrongdoing by its Swiss subsidiary. "We acknowledge and are accountable for past compliance and control failures," the bank said in a statement. The Swiss arm, the statement said, had not been fully integrated into HSBC after its purchase in 1999, allowing "significantly lower" standards of compliance and due diligence to persist.
That response raises serious questions about oversight of the Swiss operation by the then senior executives of its parent company, HSBC Group, headquartered in London. It has now acknowledged that it was not until 2011 that action was taken to bring the Swiss bank into line. "HSBC was run in a more federated way than it is today and decisions were frequently taken at a country level," the bank said.
HSBC was headed during the period covered in the files by Stephen Green now Lord Green who served as the global bank's chief executive, then group chairman until 2010 when he left to become a trade minister in the House of Lords for David Cameron's new government. He declined to comment when approached by the Guardian.
Although tax authorities around the world have had confidential access to the leaked files since 2010, the true nature of the Swiss bank's misconduct has never been made public until now. Hollywood stars, shopkeepers, royalty and clothing merchants feature in the files along with the heirs to some of Europe's biggest fortunes.
In one memo, an HSBC manager is recorded discussing how a London-based financier whom the bank codenamed "Painter", and his partner, could cheat on Italian tax. "The risk for the couple is, of course, that when they return to Italy the UK tax authorities will pass on information on them to the Italian tax authorities. My own view on this was that … there clearly was a risk."
According to the files, HSBC's Swiss bankers were also prepared to help Emmanuel Shallop, who was subsequently convicted of dealing in "blood diamonds", the illegal trade that fuelled war in Africa.
One memo records: "We have opened a company account for him based in Dubai … The client is currently being very careful because he is under pressure from the Belgian tax authorities who are investigating his activities in the field of diamond tax evasion."
The records indicate HSBC managers were untroubled that a customer collecting cash bundles of kroner might be breaking Danish law. HSBC staff were instructed: "All contacts through one of her 3 daughters living in London. Account holder living in Denmark, i.e. critical as it is a criminal act having an account abroad non declared."
HSBC's Swiss bankers routinely handed over large sums of cash to visiting clients, asking few questions, the files show. The bank said it had since tightened its controls. "The amended terms and conditions allowed the private bank to refuse a cash withdrawal request, and placed strict controls on withdrawals over $10,000 [£6,600]," its statement said.
One example of the old system detailed in the files involves Richard Caring, a British tycoon and owner of London's celebrity-packed Ivy restaurant, who on one day in 2005 removed 5m Swiss francs (£2.25m) in cash. When the Guardian asked him why, he declined to explain. His lawyer said it was a private matter and involved no impropriety. Caring's UK tax status allowed him legally to keep his accounts secret from the tax authorities.
The files show how HSBC in Switzerland keenly marketed tax avoidance strategies to its wealthy clients. The bank proactively contacted clients in 2005 to suggest ways to avoid a new tax levied on the Swiss savings accounts of EU citizens, a measure brought in through a treaty between Switzerland and the EU to tackle secret offshore accounts.
The documents also show HSBC's Swiss subsidiary providing banking services to relatives of dictators, people implicated in African corruption scandals, arms industry figures and others. Swiss banking rules have since 1998 required high levels of diligence on the accounts of politically connected figures, but the documents suggest that at the time HSBC happily provided banking services to such controversial individuals.
The Guardian's evidence of a pattern of misconduct at HSBC in Switzerland is supported by the outcome of recent court cases in the US and Europe. The bank was named in the US as a co-conspirator for handing over "bricks" of $100,000 a time to American surgeon Andrew Silva in Geneva, so that he could illegally post cash back to the US.
Another US client, Sanjay Sethi, pleaded guilty in 2013 to cheating the US tax authorities. He was one of a group of convicted HSBC clients. The prosecution said an HSBC banker promised "the undeclared account would allow [his] assets to grow tax-free, and bank secrecy laws in Switzerland would allow Sethi to conceal the existence of the account".
In France, an HSBC manager, Nessim el-Maleh, was able to run a cash pipeline in which plastic bags full of currency from the sale of marijuana to immigrants in the Paris suburbs were collected. The cash was then taken round to HSBC's respectable clients in the French capital. Bank accounts back in Switzerland were manipulated to reimburse the drug dealers.
HSBC is already facing criminal investigations and charges in France, Belgium, the US and Argentina as a result of the leak of the files, but no legal action has been taken against it in Britain.
Former tax inspector Richard Brooks tells BBC Panorama in a programme to be aired on Monday night: "I think they were a tax avoidance and tax evasion service. I think that's what they were offering.
"There are very few reasons to have an offshore bank account, apart from just saving tax. There are some people who can use an ... account to avoid tax legally. For others it's just a way to keep money secret."
The Labour party said: "Tax avoidance and evasion harms every taxpayer in Britain, and undermines public services like the NHS. What is truly shocking is that HMRC were made fully aware of these practices back in 2010 but since then very little has been done."

The origin of the leak

The HSBC files were obtained through an international collaboration of news outlets, including the Guardian, Le Monde, BBC Panorama and the International Consortium of Investigative Journalists

1
In late 2007, Hervé Falciani, an IT expert at HSBC's Swiss bank, hacked into its customer files. He fled to France with police on his trail for breaching Switzerland's rigid bank secrecy laws.

2
The French authorities detained him, but refused to extradite him when they realised the data could identify thousands of French tax evaders. Falciani now lives in France under protection.

3
In early 2010, under finance minister Christine Lagarde, France prepared confidential lists of the leaked names for other countries. The so-called "Lagarde list" led to scandal and arrests in Greece, Spain, the US, Belgium and Argentina.

4
Britain's tax authority, HMRC, received a list in 2010 from which it identified more than 1,000 tax evaders. More than £135m ($206m) was quietly recovered in repayments, but only one person was prosecuted. There has been no

[Magda Hassan]

https://deeppoliticsforum.com/forums/sho...9-Falciani

[David Guyatt]

UK tax avoidance is calculated on £20 billion. The UK tax authorities have been reimbursed just £135 million, and believe they have done their job properly. If you're wealthy you're genuinely immune to the law - even the tax laws.

HSBC files: international outcry over activities at bank's Swiss arm


[URL="http://www.theguardian.com/news/2015/feb/09/hsbc-files-bank-swiss-arm-tax-international-response#img-1"]
[/URL] HSBC offices in Geneva, Switzerland. Photograph: Harold Cunningham/Getty ImagesJuliette Garside,Patrick Wintourand Karen McVeigh
Monday 9 February 201521.42 GMT

HSBC is fighting an international firestorm over revelations that its Swiss private bank helped clients conceal undeclared accounts and provided services to criminals and corrupt businessmen.

Europe's largest bank is facing renewed government scrutiny in the UK, Europe and the US after the Guardian and dozens of other media outlets published details from the biggest banking leak in history.
In the UK, the HSBC investigation ignited a ferocious political response, with Treasury minister David Gauke forced to appear before the Commons to defend the government's efforts to clamp down on tax evasion.
He faced questions from Labour on how thoroughly the government had vetted HSBC's long-serving chief executive and chairman Stephen Green before appointing him trade minister Britain's chief business representative abroad following the May 2010 election.
Margaret Hodge, Labour chair of parliament's public accounts committee, announced that she would be reopening her investigation into the behaviour of HSBC, and would be calling on its officials, including Lord Green, to appear.
Danny Alexander, the Liberal Democrat chief secretary to the Treasury, issued a strongly worded statement warning that tax cheats should be prosecuted in the same way as conventional criminals.
"Financial institutions who are proven to have colluded with tax evaders should have the full force of the law," Alexander said.
"We quite rightly prosecute and often jail people guilty of damaging our society through conventional crime and antisocial behaviour. The way we treat systematic tax evasion should be no different. If that means jail for offenders and those that conspire with them, then so be it."
Outside the UK, calls multiplied throughout the day for investigations into events at HSBC's Swiss subsidiary, whose inner workings have been exposed in data covering the period from 2005 to 2007.
In Belgium, where HSBC Switzerland is under investigation over tax fraud allegations, a judge is considering issuing international arrest warrants for directors of the Swiss division of the bank.
In Switzerland, senior politicians called for investigations by regulators into the scandal.
In the United States, a leading member of the Senate banking committee asked the US government to explain what action it took after receiving a massive cache of the leaked bank accounts.
In Denmark, the government said it would seek the names of its citizens who may have used Swiss bank accounts to avoid domestic taxes.
In France, which has also launched an investigation, the prime minister, Manuel Valls, said he was determined to fight tax evasion and would continue to take action at home and on a European level.

How secret Swiss account data detailing misconduct came to lightEvidence that the bank colluded with hundreds of clients to conceal undeclared "black" accounts and used its Geneva branch to hand out bricks of cash in a variety of currencies from euros to pounds has been sitting in the hands of tax officials around the world since May 2010.
While France, Belgium, Spain, the US and Argentina have launched legal proceedings against HSBC and its high net worth clients, the UK's tax authority has in five years used the data to bring only one prosecution.
Meanwhile, neither HM Revenue and Customs, the Serious Fraud Office nor the Financial Conduct Authority have taken action against HSBC.
Green has so far declined to comment on the affair, telling the Guardian: "As a matter of principle, I will not comment on the business of HSBC, past or present."
Speaking on Sky News, Hodge took a firm line, saying the UK tax authorities had "done too little too late".
"If this had been benefits scroungers, they would have been queuing around the courtrooms to have their court appearances. Because it's relatively well off people, there's only one person who's been taken to court. We want to demonstrate to others that you will not get away with avoiding or evading your tax."
Hodge said only 1,100 of HSBC's roughly 7,000 Swiss bank customers had been tackled by HMRC, which had managed to collect just £135m in back tax and penalties from roughly $20bn which the International Consortium of Investigative Journalists which has collaborated with the Guardian and other media outlets in publishing the leaks, including Le Monde and BBC Panorama estimates was banked by customers with UK addresses.

Margaret Hodge says HSBC should be brought to account over tax claimsBelgian investigating judge, Michel Claise will now consider further action, a prosecution spokeswoman told the AFP news agency.
"The judge believes that it is now time for the bank to cooperate, otherwise he will be forced to issue international arrest warrants for the current and former heads of the bank," prosecution spokeswoman Ine Van Wymeersch said.
A leading member of the Senate banking committee is calling on the US government to explain what action it has taken. The Guardian has established that the leaked data was shared with US regulators five years ago.
"I will be very interested to hear the government's full explanation of its actions , or lack thereof , upon learning of these allegations in 2010," said Ohio senator Sherrod Brown, the leading Democrat on the committee.
Referring to previous charges against HSBC, which were resolved in a landmark civil settlement in 2012, and included a $1.9bn fine, he added: "If the charges are true, the same institution that was first caught violating US sanction laws and laundering money for Mexican drug cartels could then escape accountability for promoting widespread evasion of US tax laws. I intend on pressing regulators, the IRS [Internal Revenue Service] and the DoJ [Department of Justice] for answers."
Micheline Calmy-Rey, who served as foreign minister in Switzerland between 2003-2011, said opening an investigation "would be the least that could be done".
Speaking on Swiss radio, she said: "I am angry. Switzerland has a good reputation for its efforts towards peace, for its economy. But then we learn there are slick individuals who do things." Swiss socialist politician Roger Nordmann also called for the opening of an inquiry into HSBC Suisse.
So far, Switzerland has concentrated on bringing Hervé Falciani, the bank IT worker who leaked the data, to justice. Falciani is under police protection in France, having handed over CDs containing the data on an estimated 130,000 clients to French tax investigators across the table of a cafe in Nice airport during Christmas 2008.
In November 2014, the Swiss federal government indicted Falciani for industrial espionage and for violating the country's bank secrecy law, an offence which is punishable by up to three years in prison.
The Swiss Banking Association meanwhile said that banks "must always respect existing laws when carrying out their activities".
"This goes for both the laws in their own country and the laws in the countries where they operate," it said in a statement sent to AFP, adding that if banks did not follow these laws "they have to take the consequences".

[Magda Hassan]

India is paying them for the names of any Indians that they have on their books.

[R.K. Locke]

This should help:

http://www.theguardian.com/business/2013...-mi5-chief


HSBC recruits former MI5 chief

HSBC, fined £1.9bn last year for money laundering, appoints Sir Jonathan Evans as independent non-executive director

Sir Jonathan Evans
Jonathan Evans worked for the security services for 33 years, and was head of MI5 from 2007 until his retirement last month. Photograph: PA

Josephine Moulds

Friday 31 May 2013 13.54 BST

HSBC Britain's biggest bank, which was last year fined $1.9bn (£1.3bn) for acting as banker for rogue states, terrorists and drug lords has recruited the former director general of MI5 to join the board.

Sir Jonathan Evans will be paid £125,000 a year as an independent non-executive director. He will also become a member of the financial system vulnerabilities committee, which has been set up to help the bank identify areas where it could be exposed to financial crime.

Evans worked for the security services for 33 years, heading MI5 from 2007 until his retirement last month. HSBC cited his experience in "counter-terrorism, both international and domestic including, increasingly, initiatives against cyber threats".

HSBC's chairman, Douglas Flint, said Evans's "experience and expertise gained from a career at the highest level of public service combatting threats to data security, critical infrastructure and from international terrorism and organised crime will be of considerable value to the board as it addresses its governance of systemic threats".

[Magda Hassan]

Isn't the BBC director on their board as well? I need to check that but pretty sure it is right.

[David Guyatt]

Spooks in British banks has a long tradition...

[David Guyatt]

Criminal bank executives purloin investor monies to pay bribes - er scratch that, I meant 'fines' - to the government to get off scot-free and are not even named, whereas ordinary people get convicted and go to prison for far lesser crimes.

As the guy says, all this is pre-agreed at that "place called Justice."

HSBC Got Away With Buying Cocaine Plane

While the Justice Department was busy prosecuting American HSBC customers for tax evasion, it has taken no action against the bank for nearly five years.
The U.S. Justice Department is shocked, simply shocked by recent press reports that the megabank HSBC aided Americans in evading taxes.
But, here is what really is shocking: DOJ has known about the tax-evasion allegations for nearly five years.
And DOJ took no action against HSBC even as it prosecuted bank customers for their part in the same schemes.
This rank unfairness by the folks at the place called Justice was compounded three years ago after the feds caught HSBC laundering $881 million in drug cartel money and actively concealing illegal dealings with Iran and North Korea.
A money-laundering investigation as big as the bank itself ended with a deferred prosecution agreement that allowed HSBC to escape criminal charges and suffer only a fine.
This while the DOJ was jailing non-bankers by the dozen for laundering drug money, including cash from the Sinaloa cartel, which had been a prime HSBC co-conspirator.
Two men at a car dealership who took cartel cash for automobiles got serious prison time.
HSBC got a pass on helping the Sinaloa bunch acquire an airplane that was used to smuggle drugs by the ton.
In the meantime, the same shameful principle of letting the big bank skate and going after the little guy was at work in the tax-evasion cases.
DOJ aggressively prosecuted private citizens such as a New Jersey businessman who was lured into a tax scheme by HSBC and a Virginia doctor who sought to avoid paying taxes on money his deceased mother had stashed in a secret HSBC account in Switzerland.
But neither the bank nor the particular bankers were ever charged.
And, as dictated by DOJ policy on uncharged parties, HSBC and its executives were never so much as named in court papers and proceedings.
Even as the doctor, Andrew Silva, pleaded guilty to tax evasion in in June 2010, the government termed HSBC only as "the International Bank."
"The reason that the government did not disclose the name of the banker, the bank… in our proceedings is because I don't think we, as the government, are supposed to do that," the prosecutor told the judge during the sentencing in Alexandria federal court. "We have no objection, and there is no reason why the defendant cannot say who it is, it is not a secret, but I think we are just not, we, the government, are not supposed to put it in pleadings."
The doctor got probation, in part because he had agreed to cooperate with the government, though nearly five years later no charges have been brought against anyone else in the case.
A New Jersey businessman named Sanjay Sethi also received probation after pleading guilty in June 2012 to a tax-evasion scheme that court papers say was conceived and proposed by HSBCwhich again was named only as "the International Bank."
The criminal complaint charges that the bank "marketed offshore banking services for U.S. citizens of Indian descent," encouraging them "to open undeclared bank accounts in India."

More than $1 billion in cash was moved by HSBC from the cartel's Mexican hometown of Culiacán to New York between 2006 and 2008.

Sethi opened such an account in India in 2001. He received a call the following year from someone identified in the complaint as U.S. Banker A, a senior vice president at the New York office of the International Bank.
U.S. Banker A allegedly set up a meeting between Sethi and someone identified as U.K. Banker A, a London-based "high-ranking executive of the International Bank" who headed a division "focused on developing and serving clients worldwide with ties to countries in south Asia."
Not long afterward, Sethi met with U.K. Banker A in the International Bank's New York offices and discussed opening another undeclared account, this one in Switzerland.
"U.K. Banker A told Sethi that the undeclared account would allow Sethi's assets to grow tax-free and that the bank secrecy laws in Switzerland would allow Sethi to conceal the existence of the account," the complaint says.
Sethi proceeded to stash $3.4 million in an HSBC account in Switzerland. Neither he nor the bank could have foreseen that an HSBC computer analyst turned whistleblower in Switzerland would hack into the bank's computers in 2008.
This self-styled "Edward Snowden of bankers" subsequently furnished French authorities with the details of thousands of secret accounts.
In 2010, then French Finance Minister Christine Lagarde passed the pertinent information on to the United States and other countries. The Americans on the "Lagarde list" apparently included Sethi and Silva.
All this was known to the U.S. Justice Department as it completed an unrelated money-laundering investigation targeting HSBC.
The probe resulted in a 13-page "criminal information" that actually named HSBC, charging it with dodging sanctions against such countries as Iran and North Korea, as well as laundering at least $881 million in drug proceeds.
Much of the narcotics money originated with the Sinaloa cartel, and the total may be much higher. More than $1 billion in cash was moved by HSBC from the cartel's Mexican hometown of Culiacán to New York between 2006 and 2008.
But while the complaint named the bank, it made no reference at all to particular bankers.
And before the charges were even filed the feds worked out a deferred prosecution agreement with HSBC.
The bank got off with paying a $1.26 billon fine and agreeing to anti-money laundering precautions overseen by a federal monitor.
Among the smaller narco money transfers the bank facilitated was from a pair of HSBC accounts maintained in 2007 by Sinaloa front companies in the Cayman Islands. The money went to an Oklahoma aircraft company for the purchase of a Super King 200 plane that was later impounded by Mexican cops while being used fly in two tons of cocaine from Venezuela.
The idea that HSBC and its officers escaped any criminal liability for helping the cartel acquire an airplane becomes all the more galling when you consider what happened to the top executives of JM2 Auto Sales of Orlando, Florida, after they took cartel money for automobiles.

In December 2012, the same month the government granted the deferred prosecution agreement to HSBC, the president of JM2, Joel Torres, and the vice president, Eladio Marroquin-Medina, were found guilty of money laundering. Torres got 40 months in prison. Marroquin-Medina got 72 months.
In 2013, a Mississippi woman named Bridget Michelle Bland was sentenced to 60 months in prison for laundering drug proceeds by setting up a trucking company.
In 2014, a California truck driver named Adolfo Pulido was sentenced to 50 months in prison for transporting $1.5 million in cash the old-fashioned way across the border from Mexico.
That is 50 months more than anybody at HSBC received after the bank moved hundreds of millions, perhaps billions of cartel cash into the United States.
And a non-banker does not have to launder drug money to be prosecuted. A Syrian rabbi in Brooklyn was arrested for washing non-narco cash through religious charities in 2009.
The ordained Protestant priest who headed HSBC from 2006 to 2010, Stephen Green, was never charged despite the mountains of drug money. He proceeded on as Lord Green to become Britain's trade minister and has written a book calledGood Value: Reflections on Money, Morality and an Uncertain World.
"The truth is that the value of our business is dependent on the values with which we do our business," he actually opined. "Values go beyond what you can get away with.'"
The criminal information against HSBC was signed by the U.S. attorney for the Eastern District, Loretta Lynch, who is now the nominee to become the next attorney general.
But the deferred prosecution agreement was marshaled by then-Assistant Attorney General Lanny Breuer in Washington. Breuer subsequently acknowledged that in his view, HSBC was essentially too big to jail.
"Had the U.S. authorities decided to press criminal charges, HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat, and the entire banking system would have been destabilized," Breuer told a press conference.
His boss and the person ultimately behind the settlement, Attorney General Eric Holder, said much the same to a Senate panel three months later. He presented too big to jail as a corollary of too big to fail.
"I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy," Holder said.
The continuing outrage about the HSBC deal must have caused Holder to fret that if he was once known as a champion of civil rights, he might go down in history as an abettor of criminal wrongs by big banks.
He made a pronouncement in a DOJ video.
"There's no such thing as too big to jail,'" Holder declared.
As Holder prepares to depart, DOJ is pressuring four megabanksbut not HSBCto plead guilty to felony charges of manipulating foreign currency rates. There is talk of actual people being indicted, but only relatively low-level traders. Holder will almost certainly leave with a perfect record of not having busted a single senior banker.
That is not a record that Loretta Lynch would likely hope to match as she awaits her all but assured confirmation.

Lynch has already indicated the deferred prosecution agreement on the money laundering does not preclude HSBC from being prosecuted for other crimes, tax evasion among them.
"I want to reiterate, particularly in the context of recent media reports regarding the release of HSBC files pertaining to its tax clients, that the Deferred Prosecution Agreement reached with HSBC addresses only the charges filed in the criminal information, which are limited to violations of the Bank Secrecy Act for failures to maintain an adequate anti-money laundering program and for sanctions violations," Lynch said in a letter submitted Monday in response to a series of written questions from the Senate Judiciary Committee.
She went on, "The DPA explicitly does not provide any protections against prosecution for conduct beyond what was described."
She added, "Furthermore, I should note the DPA explicitly mentions that the agreement does not bind the Department's Tax Division, nor the Fraud Section of the Criminal Division."
Lynch seemed unaware that only the news reports about the DOJ tax files are new and that the DOJ has had the details since 2010.
Equally not in the know was Sen. Elizabeth Warren (D-MA), who had been very vocal in her disapproval when HSBC got off with only a fine for the massive money laundering.
On Tuesday, Warren spoke with renewed outrage in a statement to The Guardian, one of the news organizations at the forefront in reporting the tax-evasion charges.
"The new allegations that HSBC colluded to help wealthy people and rich corporations hide money and avoid taxes are very serious, and, if true, the Department of Justice should reconsider the earlier deferred prosecution agreement it entered into with HSBC and prosecute the new violations to the full extent of the law," Warren told the newspaper.
Wait until she and everyone else find out that the DOJ has already prosecuted Dr. Silva and the New Jersey businessman Sethi for tax evasion without moving on HSBC.

From The Daily Beast

[David Guyatt]

Suppressing news to protect advertising revenue? Say it ain't true.

Still, at least one journo has got the balls to stand up and be counted. That's rare in these times.

But I note the usual lies streaming out of flunkies who dare not name themselves (said the Telegraph).

In any event, this is simply the tip of the spear. When you add to revenue protection, downright propaganda, D notices and other pressures, the UK media these days amounts to no more than a mish-mash of partial truths, deceptions, self censorship, story framing etc (but don't get me on to the subject of The Guardian, okay).

The motive of profit acting as king, queen, emperor and god does that.

Peter Oborne resignation: Senior writer quits Telegraph dramatically over HSBC allegations



Columnist accuses paper's owners of suppressing reportage for fear of losing advertising revenue

ADAM SHERWIN

Tuesday 17 February 2015

A senior writer at the Daily Telegraph has dramatically quit the newspaper after accusing its owners, the Barclay Brothers, of suppressing reports about the HSBC scandal out of fear of losing advertising revenue.

Peter Oborne, the paper's chief political commentator and an award-winning author, announced his resignation in a blog on the openDemocracy website, in which he accused the Telegraph of committing a "fraud" on readers by burying reports on the HSBC tax scandal.
The journalist quoted a conversation with Murdoch MacLennan, chief executive of Telegraph Media Group, whom he said freely admitted that advertising was allowed to affect editorial at the paper.
Referring to the phone-hacking scandal which hit Rupert Murdoch's newspapers, Oborne argued that democracy was being undermined by "shadowy" media executives "who determine what truths can and what truths can't be conveyed" by news organisations.
Mr Oborne detailed a series of investigations about HSBC, and other financial scandals, which he said executives at the newspaper had closed down.
He declared that "democracy itself is in peril" if "major newspapers allow corporations to influence their content for fear of losing advertising revenue".
The Telegraph called Mr Oborne's attack "full of inaccuracy and innuendo". The paper denied that its editorial judgements had ever been compromised by commercial imperatives.
Mr Oborne, an associate editor of The Spectator, who has presented investigations for Channel 4's Dispatches, criticised his paper's minimal coverage of the tax evasion scandal which engulfed HSBC and its Swiss banking arm.
He wrote: "You needed a microscope to find the Telegraph coverage: nothing on Monday, six slim paragraphs at the bottom left of page two on Tuesday, seven paragraphs deep in the business pages on Wednesday.
"The Telegraph's recent coverage of HSBC amounts to a form of fraud on its readers. It has been placing what it perceives to be the interests of a major international bank above its duty to bring the news to Telegraph readers."
Oborne has attacked the Telegraph's coverage of the HSBC tax scandal (Getty)
The paper had made a sudden about turn after journalists pursued previous investigations into the bank. Mr Oborne wrote: "From the start of 2013 onwards stories critical of HSBC were discouraged. HSBC suspended its advertising with the Telegraph.
"Its account, I have been told by an extremely well informed insider, was extremely valuable. HSBC, as one former Telegraph executive told me, is the advertiser you literally cannot afford to offend'.
"HSBC today refused to comment when I asked whether the bank's decision to stop advertising with the Telegraph was connected in any way with the paper's investigation into the Jersey accounts.
"Winning back the HSBC advertising account became an urgent priority. It was eventually restored after approximately 12 months. Executives say that Murdoch MacLennan was determined not to allow any criticism of the international bank."
As a result of a 2012 investigation into accounts held by HSBC in Jersey, he claimed: "Reporters were ordered to destroy all emails, reports and documents related to the HSBC investigation. I have now learnt, in a remarkable departure from normal practice, that at this stage lawyers for the Barclay brothers became closely involved."
Mr Oborne, who wrote regular columns for the paper on what he perceived to be a moral corruption at the heart of Britain's political culture, accused his bosses of appeasing Chinese interests by refusing to publish critical comment after China barred British MPs from a visit to Hong Kong.
He argued: "An editorial operation that is clearly influenced by advertising is classic appeasement. Once a very powerful body knows they can exert influence they know they can come back and threaten you. It totally changes the relationship you have with them."
A Telegraph spokesperson said: "Like any other business, we never comment on individual commercial relationships, but our policy is absolutely clear. We aim to provide all our commercial partners with a range of advertising solutions, but the distinction between advertising and our award-winning editorial operation has always been fundamental to our business. We utterly refute any allegation to the contrary.
"It is a matter of huge regret that Peter Oborne, for nearly five years a contributor to the Telegraph, should have launched such an astonishing and unfounded attack, full of inaccuracy and innuendo, on his own paper."
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"The sackings continued. A little while later I met Mr MacLennan by chance in the queue of mourners outside Margaret Thatcher's funeral and once again urged him not to take Telegraph readers for granted. He replied: "You don't know what you are fucking talking about."
With the collapse in standards has come a most sinister development. It has long been axiomatic in quality British journalism that the advertising department and editorial should be kept rigorously apart. There is a great deal of evidence that, at the Telegraph, this distinction has collapsed.
"I was resigning as a matter of conscience. Mr MacLennan agreed that advertising was allowed to affect editorial, but was unapologetic, saying that "it was not as bad as all that" and adding that there was a long history of this sort of thing at the Telegraph.
"The past few years have seen the rise of shadowy executives who determine what truths can and what truths can't be conveyed across the mainstream media. The criminality of News International newspapers during the phone hacking years was a particularly grotesque example of this wholly malign phenomenon."