Blatant corporate fraud, money laundering for drug cartels and financing terrorists aren’t prosecuted when the criminals are mega-banks. After their actions brought down the economy and cost millions of Americans their jobs — estimates vary from 7.7 to 8.8 million — neither the banks nor their executives have been brought to trial, let alone found guilty.
Bank of America, which was bailed out with $45 billion of taxpayer money four years ago, conspired in the LIBOR scandal, foreclosed the homes of tens of thousands of Americans and profited from worthless mortgage-backed securities it sold to unions and pension plans.
Last December, the U.S. Department of Justice fined Swiss bank UBS $1.5 billion for having manipulated global interest rates in collusion with other banks in the LIBOR scandal. (The LIBOR case was a conspiracy that secretly fixed rates that affected mortgages, student loans and financial derivatives — transactions worth hundreds of trillions of dollars.)
A week earlier, giant HSBC agreed to pay a record $1.9 billion fine (about five weeks’ profit) for the largest-ever case of money-laundering. HSBC admitted to laundering $881 million for Mexican and Colombian drug cartels and to violating sanctions for Iran, the Sudan and North Korea. Matt Taibbi calls the company “Gangster Bankers.”
“They violated every goddamn law in the book,” said former Senate investigator Jack Blum. “They took every imaginable form of illegal and illicit business.”
At the Banking Committee hearing on March 7, Sen. Elizabeth Warren (D-MA) observed about HSBC
And they didn’t do it just one time — it wasn’t like a mistake — they did it over and over and over again across a period of years. And they were caught doing it, warned not to do it and kept right on doing it and evidently making profits doing it.
Exasperated, Warren kept asking the same question:
What does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before somebody says, “We’re shutting you down”?
But no matter how many times she asked, she didn’t receive a straight answer.
Until finally U.S. Attorney General Eric Holder admitted what everyone suspected all along: the banks are not only too big to fail, they are also too big to jail:
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 … I am concerned that the size of some of these institutions has become so large that it does become difficult for us to prosecute them.
— Eric Holder, testifying before the Senate Judiciary Committee March 6, 2013
With this admission, Holder has given these behemoths a green light, a free pass to keep doing their business as usual. Without prosecution to bring these criminals to justice, any government agents or regulators who may have turned a blind eye will remain safely hidden in the shadows.
If the shutting down of a big bank will threaten the entire banking system, then let’s not shut them down. But let’s not allow them to continue profiting illegally. It’s time to break the conglomerates up until they are no longer too big to jail.