The website Antifascist Calling – “Exploring the shadowlands of the corporate police state” – is by “A researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly, Love & Rage and Antifa Forum, I am the editor of Police State America: U.S. Military “Civil Disturbance” Planning, distributed by AK Press”.

This article appeared last Sunday (29) containing this paragraph: “In 2008 alone the Senate revealed that the bank’s [HSBC] Cayman Islands branch handled some 50,000 client accounts (all without benefit of offices or staff on Grand Cayman, mind you), yet still managed to ship some $7 billion (£10.9bn) in cash from Mexico into the U.S.”

We all know that HSBC does have an office here now, although the article fails to point that out. However, it is an interesting story with a heavy slant towards corruption that, unfortunately, seems rife in today’s banking world.

Here is a short excerpt from the article

Black Dossier: HSBC & Terrorist Finance

It’s tough being the world’s second largest bank.

HSBC, the London-based British multinational banking and financial services giant operates in 85 countries with 7,200 offices worldwide with assets totaling more than $2.6 trillion (£4.06tn).

They’re also caught-up in serial scandals: the Libor interest rate-fixing scam, serious charges of drug money laundering as well as suspicions that bank officers “palled around” with terrorist financiers.

Founded in 1865 when the British Crown seized Hong Kong as a colony in the aftermath of the First Opium War, British merchants (today we’d call them drug lords) needed a bank to handle the brisk trade in the illicit substance and launched the Hongkong and Shanghai Banking Company Limited. Rebranded “HSBC” in 1991, the bank expanded at breakneck speed in the heady days after The Wall fell.

While some might call them a success story, exemplars of financial wizardry in tough economic times, more appropriately perhaps, we might borrow a term from Mafia lore to describe their preeminent position in the capitalist pantheon of corrupt institutions: juiced.

‘Sorry, now Go Away’

Today, the “War on Drugs” rivals the “War on Terror” for top spot on the global hypocrisy index.

Moral equivalencies abound. After all, when American secret state agencies manage drug flows or direct terrorist proxies to attack official enemies it’s not quite the same as battling terror or crime.

Pounding home that point, a new report by the Senate Permanent Subcommittee on Investigations accused HSBC of exposing “the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering (AML) controls.”

That 335-page report, “U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History,” (large pdf file available here) was issued after a year-long Senate investigation zeroed-in on the bank’s U.S. affiliate, HSBC Bank USA, N.A., better known as HBUS.

Drilling down, we learned that amongst the “services” offered by HSBC subsidiaries and correspondent banks were sweet deals with financial entities with terrorist ties; the transportation of billions of dollars in cash by plane and armored car through their London Banknotes division; the clearing of sequentially-numbered travelers checks through dodgy Cayman Islands accounts for Mexican drug lords and Russian mafiosi.

From richly-appointed suites at Canary Wharf, London, the bank’s “smartest guys in the room” handed some of the most violent gangsters on earth the financial wherewithal to organize their respective industries: global crime.

A case in point. In 2008 alone the Senate revealed that the bank’s Cayman Islands branch handled some 50,000 client accounts (all without benefit of offices or staff on Grand Cayman, mind you), yet still managed to ship some $7 billion (£10.9bn) in cash from Mexico into the U.S. Now that’s creative accounting!

Playing fast and loose with U.S. banking rules, Subcommittee Chairman Carl Levin (D-MI) said that by exploiting the bank’s “poor AML controls, HBUS exposed the United States to Mexican drug money, suspicious travelers cheques, bearer share corporations, and rogue jurisdictions.”

Describing a “compliance culture” that was “pervasively polluted for a long time,” Levin said it “will take more than words for the bank to change course.”

Yet weasel words and butt-covering were all that were proffered to the American people even before Senate hearings began. Bank spokesman Robert Sherman said in an emailed statement that HSBC “will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect. We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong.”

Right on cue, chief compliance officer David Bagley dramatically fell on his sword during those hearings and resigned on camera. It was quite a performance even by Washington’s tawdry standards.

Appearing contrite, Bagley told the panel: “Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators. … I recommended to the group that now is the appropriate time for me and for the bank, for someone new to serve as the head of group compliance.”

While there’s no word yet just how big Bagley’s golden parachute will be, it’s a sure bet he won’t spend a day in jail, nor for that matter will Lord Stephen Green, HSBC’s former Chairman and Chief Executive Officer.

Between 2003-2010, Green tilled the helm after serial stints directing The Bank of Bermuda Ltd., HSBC Mexico, SA, HSBC Private Banking Holdings (Suisse) SA and HSBC North American Holdings Inc.; units which feature prominently in the scandal. Sensing perhaps that the jig was up, last year he joined David Cameron’s Conservative government as Minister of State for Trade and Investment.

Unlike Pappy Bush who claimed to be “out of the loop” during the Iran-Contra guns-for-drugs affair, Green was fully apprised of bank shenanigans and the Senate published emails which prove it.

Cheekily however, while underlings take the fall, Green told The Daily Telegraph, “I do not believe that I have a case to answer other than in the important sense that as chairman and chief executive I was responsible for what the company did. HSBC has expressed regret for the failures. I share that regret.”

The Telegraph noted that Green has not considered resigning from Cameron’s government, saying he was “very engaged” with his current plum post.

Ironically enough, the current Baron of Hurstpierpoint is an ordained priest in the Church of England and the author of an inspirational tome, Good Value: Reflections on Money, Morality and an Uncertain World. And no, you can’t make this stuff up!

The top spot is now occupied by Stuart Gulliver who, quicker than you can say “we’re sorry,” admonished employees to “do better” and expressed remorse over his firm’s “unacceptable behavior.” Never mind that before ascending the throne, Gulliver was director of HBUS, HSBC Latin American Holdings Ltd., and HSBC Bank Middle East Ltd., divisions that have raised more than an eyebrow or two amongst Subcommittee investigators.

Topping Bagley’s Kabuki-lite performance with her own rendition of clown car camp, Irene Dorner, HBUS’s President and CEO told the Senate: “We deeply regret and apologize for the fact that HSBC did not live up to the expectations of our regulators, our customers, our employees, and the general public. HSBC’s compliance history, as examined today, is unacceptable. … We’ve worked hard to foster a new culture that values and rewards effective compliance, and that starts at the top.”

Bathos aside, it was a polite way of saying “let’s move on” and get back to the business of lining our pockets; after all, it’s what we do best.
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