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Transparency International Publishes List of 25 Biggest Corruption Scandals, HSBC Involved in Most

© REUTERS / Suzanne PlunkettA taxi drives past a branch of HSBC bank in London, Britain, February 9, 2015.
A taxi drives past a branch of HSBC bank in London, Britain, February 9, 2015. - Sputnik International
To mark the 25th anniversary of its founding, Transparency International has compiled a list of the biggest corruption scandals over the past quarter century, which “involve politicians across political parties and from the highest reaches of government, staggering amounts of bribes and money laundering of epic proportions”.

Shocking they all most certainly are - but even more shockingly, Nicholas Wilson, a whistleblower embroiled in a 16-year-long one-man crusade against HSBC, has noted the bank - one of the largest banking and financial services organisations in the world - crops up in 18 of the historic calumnies, and may have played a role in at least three others.

It’s somewhat striking Wilson’s own case doesn’t feature in the line-up, for it surely deserves a place. In 2003, he discovered HFC Bank and John Lewis Financial Services - both part of HSBC - were automatically increasing the debts of customers who fell into arrears with credit card payments by 16.4 percent. The punitive flat-rate charge was added whenever the organisations referred customers to their solicitors, despite the fee in no way reflecting the actual cost of collecting the outstanding debt.

​Wilson was then-employed at one of the solicitors firms retained by the banks and responsible for chasing the inflated debts, and suggested to superiors the practice was illegal - in response, they dubbed him ‘Mr. Ethical’.

He refused to drop the matter, and attempted to expose the scandal, to little avail at first. Eventually though, in 2010 the flat-rate charge was identified as unreasonable by the Office of Fair Trading, and the body imposed a formal requirement on HFC to stop adding a collection charge until it changed the terms of its customer agreements, or introduced new terms. No customers affected were notified, or received redress however.

Outraged by officials’ inaction, he complained to the Financial Services Authority, which ruled that the matter was outside its remit. He then complained to the Financial Conduct Authority, the FSA’s successor, but it opted to take no action.

​It would take Wilson notifying the Office of the Complaints Commissioner, which investigates grievances relating to the regulator, for the subterfuge to be expose - in a strongly worded ruling in December 2015, the Commissioner ruled the FCA had presided over a series of events “bordering on the farcical”, was “negligent” and “defensive” and had even attempted to “shift blame” on to Wilson. In January 2017, HSBC finally agreed to set up a £4 million compensation scheme for the people forced to pay “unreasonable” debt collection charges imposed by the bank’s subsidiaries.

Despite having lost “everything” over the course of his crusade, Wilson’s efforts continue to this day - he believes HSBC’s payout to be “derisory”, and around 600,000 customers may have been affected.

Moreover, his experiences have led him to coin the theory of ‘Two Degrees of Separation’ - “wherever there’s a scandal, anywhere in the world, HSBC will be involved somehow”. Looking over just some entries in Transparency International’s inventory of ignominy, it’s not hard to see why.

Absolute Belter

Spain’s Gürtel scandal surfaced in 2009, and has metastasised to epic proportions - today, it’s by far and away the biggest corruption scandal in the country’s democratic history.

In brief, officers of the People's Party (PP), reaching all the way up to the president’s office, received illicit donations and bribes from tycoon Francisco Correa, and then provided him rigged government contracts.

The dark money was funnelled into a number of accounts, with Luis Barcenas, PP’s chief administrator and treasurer, sending millions flowing through HSBC’s infamously opaque Swiss branch before landing in a number of jurisdictions, including New York. The swindle allowed recipients of the Correa’s cash to hide their ill-gotten gains from tax authorities, with no questions asked about where the money came from.

Correa eventually received a 51-year jail sentence - legal actions against other party figures remain ongoing.

Dragging Heels

Sani Abacha was a Nigerian army officer who ruled Nigeria with an iron fist from 1993 until his death in 1998.

It was posthumously revealed Abacha embezzled between US$3 - $5 billion of public money, hiding the funds in a variety of tax havens, including British crown dependency Jersey, with the help of a number of banks - including HSBC, which effectively laundered at least US$100 million for the fallen ruler.

Ever since, Nigeria has been fighting to recover the stolen money, and while Jersey announced earlier this year it would place US$268 million stored in a Deutsche Bank account into an asset recovery fund that will eventually return the cash to Nigeria, HSBC - “the world’s local bank” - is refusing to return the funds stored in its accounts, going to the extent of fighting the Nigerian government’s claims in court.

Lava Jato

Operation Car Wash is an ongoing criminal investigation by the Federal Police of Brazil into what some have dubbed “the biggest corruption scandal in history”.

What began as a fairly routine money laundering investigation uncovered an unparalleled web of corruption involving state-controlled energy company Petrobras has gone on to include a variety of businesses in 11 primarily Latin American countries.

In essence, executives at Petrobras are alleged to have accepted bribes in return for awarding contracts to construction firms at inflated prices, with the money laundered at businesses such as petrol stations and car washes. Authorities have brought over 1,000 warrants against offending companies, individuals and groups for search and seizure, temporary and preventive detention, and plea bargain coercive measures. The full extent of the conspiracy still isn’t known as of July 2019, but it’s estimated up to US$13 billion in Petrobras funds was embezzled.

A HSBC logo is pictured at a Swiss branch of the bank, in Geneva February 9, 2015 - Sputnik International
HSBC Swiss Subsidiary Faces Tax Fraud Trial in France

Anonymous sources told Reuters in February 2015 a dozen people involved in the scandal also had undeclared accounts with HSBC’s private bank in Switzerland, with authorities launching a broader investigation into whether wealthy Brazilians had opened over 6,600 undeclared accounts with the Swiss arm. The accounts under investigation were opened 1988 - 2006 and had an estimated value of $7 billion at the end of the period.

The same week Reuters reported on the potential linkage, HSBC admitted failings in compliance and controls in the Swiss private bank.

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