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Holder admits some banks 'too big to jail'
Posted By -NO AUTHOR- On 03/11/2013 @ 9:21 pm In Money,Politics,U.S. | No Comments
More than three months after the Justice Department administered a virtual slap on the wrist to global banking giant HSBC after a whistleblower’s report to WND of massive fraud was confirmed, Attorney General Eric Holder admitted to a Senate panel he believes some banks are too big to prosecute.
Under questioning before the Senate Judiciary Committee last Wednesday, Holder said he was not referring specifically to HSBC, because it would not be “appropriate,” but the message was clear.
Banks the size of HSBC are “too big to jail,” as a member of the Senate panel put it.
“I am concerned that the size of some of these institutions becomes so large,” the attorney general confessed, “that it does become difficult for us to prosecute them when we are hit with indications that 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.
“And I think that is a function of the fact that some of these institutions have become too large,” said Holder.
In December, WND ‘s “Whistleblower of the Year,” John Cruz, called the $1.92 billion fine the U.S. government imposed on HSBC “a joke” and filed a $10 million lawsuit for “retaliation and wrongful termination.”
Significantly, the HSBC settlement with the Justice Department allowed all bank officers and directors who may have been aware of or participated in the illegal activities to be free of criminal investigation and prosecution in exchange for HSBC agreeing to pay the $1.92 billion fine.
Whistleblowers in India and London joined Cruz in charging the HSBC settlement amounts to a massive “cover up.” Avoiding criminal investigation and prosecution, they said, allows not only HSBC bank officers and directors to avoid further public scrutiny but also any government officials who may have turned a blind eye to HSBC improprieties.
At the Senate hearing last week, Sen. Charles Grassley, R-Iowa, asked Holder to explain why federal and state authorities decided not to indict HSBC after it admitted funneling cash to Mexican drug cartels, helping rogue regimes avoid sanctions and assisting Saudi banks tied to terrorism.
The senator said, “I’m concerned that we have a mentality of too-big-to-jail in the financial sector of spreading from fraud cases to terrorist financing and money laundering cases – and I cite HSBC.”
Holder replied: “The concern that you have raised is one that I, frankly, share.”
However, Holder said he was not specifically referring to HSBC, because it would not be “appropriate.”
“Again, I’m not talking about HSBC,” he said. “This is just a – a more general comment. I think it has an inhibiting influence – impact on our ability to bring resolutions that I think would be more appropriate. And I think that is something that we – you all need to – need to consider. So the concern that you raised is actually one that I share.”
Cruz has insisted to WND that it is impossible to believe HSBC laundered billions of dollars in Mexican drug cartel money, worked with terrorists through affiliate banking operations in Saudi Arabia and circumvented Obama administration banking sanctions against Iran – all activities specifically charged by the Senate Permanent Subcommittee on Investigations – without the knowledge and perhaps complicity of U.S. government officials in the U.S. Treasury, the Federal Reserve, the CIA and the NSA in an era in which government officials are capable of reading the emails of ordinary citizens.
In response to WND’s reporting earlier this year of Cruz’s evidence, HSBC lodged a complaint that blocked Internet access to one of the WND stories, and senior reporter Jerome Corsi was fired by the New York City investment firm he had worked with for two years as a senior managing director, Gilford Securities.
In June, WND reportedevidence Holder’s Justice Department has not investigated money-laundering charges in deference to bank clients of his Washington-based law firm, where Holder was a partner prior to joining the Obama administration.
WND reported in October HSBC was engaged in a systematic scheme to defraud citizens of India who live abroad out of billion of dollars in investment accounts, according to an Indian source who provided evidence.
Not his job
Commenting on Holder’s testimony last Wednesday, New York Times Editorial Page Editor Juliet Lapidos wrote on his blog: “It’s nice and all that Mr. Holder cares about the stability of the global financial system, but that is not Mr. Holder’s job. As attorney general he is the country’s top law enforcement officer, and in that capacity he should prosecute criminals and criminal institutions.”
Lapidos noted a New York Times editorial after the Justice Department decided not to indict HSBC in December that said “when prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished.”
“The deterrence that comes from the threat of criminal prosecution is weakened, if not lost,” the paper said.
Freshman Sen. Elizabeth Warren, D-Mass., weighed in on the issue at a Senate hearing Thursday, asking federal regulators with the Treasury Department why they are not stopping banks from allowing money laundering.
The regulators placed the blame on Holder’s Justice Department, insisting they could do nothing unless Justice brought a criminal case and secured a conviction.
See WND’s two-part interview with John Cruz:
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