Joaquin “El Chapo” Guzman
US media are celebrating the arrest of alleged Mexican drug kingpin Joaquín “El Chapo” Guzmán Loera, whose Sinaloa Cartel is thought to be the most powerful trafficker in the world and “a main combatant in a spasm of violence that has left tens of thousands dead in Mexico” (New York Times, 2/22/14).
US Attorney General Eric Holder called the arrest a “landmark achievement”: “The criminal activity Guzman allegedly directed contributed to the death and destruction of millions of lives across the globe through drug addiction, violence and corruption.”
But that activity wasn’t conducted by Guzman alone, and another notable player appears to be missing from the current story.
In 2012, banking corporation HSBC agreed to forfeit $1.256 billion and enter into a deferred prosecution agreement with the Justice Department for violating myriad laws by, among other things, laundering money for drug cartels, including Sinaloa.
HSBC HQ in London (photo: Danesman1/Wikimedia)
“As a result of HSBC Bank USA’s AML [anti-money laundering] failures, at least $881 million in drug trafficking proceeds–including proceeds of drug trafficking by the Sinaloa Cartel in Mexico and the Norte del Valle Cartel in Colombia–were laundered through HSBC Bank USA,” reads a December 11, 2012 statement from the Department of Justice, which called the bank’s failures “stunning,” “astonishing” and “blatant.”
Indeed, as Reuters (12/11/12) reported, based on federal court documents and prosecutors’ statements:
In February 2008, Mexican authorities told the CEO of HSBC’s Mexico unit that a local drug lord referred to the bank as the “place to launder money,” US prosecutors said…
So rampant was the practice…that on some days drug traffickers deposited hundreds of thousands of dollars at HSBC Mexico accounts. To speed things along, the criminals even designed ‘specially shaped boxes’ that fit the size of teller windows at HSBC branches, according to the documents.
But while the only questions regarding Guzman’s prosecution appear to be where and when, things were different when it came to prosecuting the institution that supported what Immigration and Customs Enforcement Director John Morton called “the lifeblood of their operations.”
The DOJ “stopped short of indicting HSBC,” as the New York Times phrased it (3/1/13) because, according to Justice Department prosecutor Lanny Breuer, there were other considerations:
Had the US authorities decided to press criminal charges, HSBC would certainly have lost its banking license in the US, the future of the institution would have been under threat and the entire banking system would have been destabilized.
Judging by coverage, media bought that line (Extra!, 1/14).
For its part, HSBC declared itself “profoundly sorry” for “past mistakes.”
Media’s elision of the bank’s role from current reporting on Sinoloa suggests they bought that one, too.
Even if you believe the bullshit about “destabilizing the banking system”, what’s to prevent the feds from prosecuting the individuals involved?
Yes, it is the most rhetorical of questions.
Good Job
This is funny the shows one bank and they Chepo had thousands! As to prosecuting the people in the bank who participated in this criminal activity, it is pointless el chapo would have them killed and their families just in case they would testify against him.
The only people el chapo seemed to have any fear for is the actual President of Guatemala Otto Perez Molina, who was an intelligence officer for the Guatemalan army and had in fact an army in his side to get the money and resources from el Chapo to create his own “cartel”. But the USA would ignore that because Perez Molina is a graduate of the School of the Americas who commited genocide during the Guatemalan cIvil war with the apparent blessing of the CIA and the US administrations.
Good blog post.
Coverage also somehow omits last month’s revelation of the DEA’s sweetheart deal with the Sinaloa cartel from 2000-2012:
http://www.businessinsider.com/the-us-government-and-the-sinaloa-cartel-2014-1
Well, DOJ lawyer, Lanny:
Other considerations for not prosecuting this bank was that the failure of the banking institution would brought down the bank and “…the entire banking system would have been destabalized.”
So….it’s better to destabalize an entire nation’s population? That’s what hapens when bankers lie, cheat and steal….so why would you want to let those guys walk? If laundering drug money is not a legal issue………..what is?
Nothing stopped the prosecution of specific banking EXECUTIVES, but apparently nobody thought of doing that either. Following the book “The Best Way to Rob a Bank is to Own One” by William K. Black, someone should write the book “The Best Way to Commit Crimes and Walk is to Own a Bank”. The algorithm runs as follows:
1. launder so much drug money that your bank becomes a major institution.
2. when caught, argue that a prosecution will endanger the entire banking system.
3. say you’re “sorry.” and that’s about all you have to do.
4. don’t forget to retire with a fat pension!
Then, there’s the fact that our failed prohibition created El Chapo, the Sinaloa Cartel, tens of thousands dead in Mexico and the US, and HSBC’s money laundering profits.
Bingo, Vrede. Just goes to show that the “cartel” extends MUCH further than Mexico.
So, why not prosecute the bank execs who knew what was going on? This isn’t about protecting the country’s financial stability, it’s about cronyism at its very worst. Someone needs to prosecute DOJ prosecutor Lanny Breuer.
Lanny Breuer was ripped apart in PBS Frontline’s January 22, 2013
“The Untouchables” about how Wall Street’s leaders have escaped prosecution for any fraud related to the sale of bad mortgages.
On January 23 the Washington Post reported that Breuer is expected to step down and on January 30 AAG Breuer’s departure was confirmed by the Justice Department, as taking place on March 1, 2013.
Drug money launderers or economy crashers, he is consistent – Serve the rich, nothing else matters. We’ll see which of them rewards him with an immediate new job.
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