In 2012, the US Justice Department reached a settlement with HSBC. Despite its role in aiding Saudi banks that had known terrorist connections, Mexican drug cartels, as well as various countries attempting to evade US sanctions, the financial company avoided punishment by settling for $1.9 billion.
A new inquiry by the US House Financial Services Committee, as detailed by the DC Sentinel, has shed new light on the arrangement, and provides an inside look at the Obama administration’s failures in holding Wall Street accountable.
Records show that Jen Shasky, then head of the Justice Department’s Asset Forfeiture and Money Laundering Section (AFMLS), stated that the DOJ "is considering seeking a guilty plea from HSBC (apparently for violations of the Bank Secrecy Act only, not for sanctions violations)." Other Justice Department officials said they were "very strongly considering a prosecution."
This stance evidently changed, however, after British financial minister George Osborne provided input.
"Chancellor Osborne insinuated in his letter of September 10th that the US was unfairly targeting UK banks by seeking settlements that were significantly higher than ‘comparable’ settlements with US banks," the report reads.
Osborne also argued that prosecution could have "very serious implications for financial and economic stability, particularly in Europe and Asia."
The report indicates that Holder may have lied while addressing Congress months after the HSBC settlement was finalized.
"If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought," Holder said.
"The former Attorney General has been widely panned for not seeking criminal prosecutions of Wall Street executives at the heart of last decade’s financial meltdown – a calamity fueled by a multi-trillion dollar mortgage securities fraud, carried out with the help of just about every major actor in the industry," Sam Knight writes for the DC Sentinel.
"Holder now works for Covington & Burling, a corporate law firm that represents financial firms. The outfit notes on its website that it specializes in ‘anti-money laundering compliance programs,’ among other areas of banking law."
Obama’s current Attorney General Loretta Lynch has also faced recent controversy. Days before the FBI completed its investigation in former Secretary of State Hillary Clinton’s email scandal, Lynch met with Clinton’s husband Bill aboard a plane in Phoenix, Arizona. For many, this bore the appearance of a conflict of interest.