Or, What's Wrong With the Entire Goddamn System in 2 Short Videos...
By Brad Friedman on 3/11/2013, 8:34pm PT  

This exchange --- by Congressional committee proxy --- got a bit more buried than it deserved to be amidst a week of important (Rand Paul's drone filibuster) and not so important (Presidential/Congressional dinner dates!) news items last week.

You may have already seen both of these clips. But just in case you haven't, the remarks made during two different Congressional hearings last week illustrate the very heart of the most broken part of our broken government, so I wanted to be sure to at least flag these two short videos here.

The first was Attorney General Eric Holder's remarkable admission last week, when asked about why one the world's largest banks, such as HSBC --- which admitted to some $881 million dollars in drug cartel money laundering and working with regimes in a number of countries around the world in blatant violation of human rights sanctions against them --- have not been brought to trial by the Obama Dept. of Justice...

"The concern that you have raised is one that I, frankly, share," Holder responded to Sen. Chuck Grassley (R-NE). "I am concerned that the size of some of these institutions becomes so large 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."

"It has an inhibiting influence --- impact --- on our ability to bring resolutions that I think would be more appropriate," he continued. "So, the concern that you raise is actually one that I share."

With all due respect to AG Holder --- and he is due very, very little --- what he just said is, to the best of my knowledge, complete bullshit. While I'm not an expert in financial law, I am familiar with no clause in any of those laws which offers a "get out of jail free card" to institutions who have become so large that prosecuting them would have "a negative impact on the national economy, perhaps even the world economy."

I know of no provisions in the criminal code which says that if your corporation has become large enough that facing criminal prosecution might make the world markets jittery, you don't have to face prosecution for those crimes. In fact, we still have anti-trust laws on the books to deal with exactly those situations --- cases in which corporations have become so powerful, have such a monopolistic effect on the market, that they may be broken up by the Dept. of Justice, or even taken over and then sold off piece meal to bring the company back into manageable size again.

The next day, in another U.S. Senate hearing, Sen. Elizabeth Warren (D-MA), expressed a similar sentiment, in a must-see video clip, absolutely slamming U.S. Treasury regulators for their lack of willingness to take action against some of the most criminal corporations, such as HSBC.

"What does it take to get you to consider shutting down a bank for money laundering?!," she asked the regulators who couldn't respond as to the last time a bank had been prosecuted for this sort of thing. "How many billions of dollars before somebody says we're shutting you down?"...

Huffington Post's Mark Gongloff described the testy exchange this way [emphasis added]:

Sen. Elizabeth Warren unloaded on bank regulators Thursday about the fact that British bank HSBC is still doing business in the U.S., with no criminal charges filed against it, despite confessing to what one regulator called "egregious" money laundering violations.
...
During a Senate Banking Committee hearing about money laundering, Warren (D-Mass.) grilled officials from the Treasury Department, Federal Reserve and Office of the Comptroller of the Currency about why HSBC, which recently paid $1.9 billion to settle money laundering charges, wasn't criminally prosecuted and shut down in the U.S. Nor were any individuals from HSBC charged with any crimes, despite the bank confessing to laundering billions of dollars for Mexican drug cartels and rogue regimes like Iran and Libya over several years.

Defenders of the Justice Department say that a criminal conviction could have been a death penalty for the bank, causing widespread damage to the economy. Warren wanted to know why the death penalty wasn't warranted in this case.

"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," Warren said of HSBC. "How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?"
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"If you're caught with an ounce of cocaine, the chances are good you're gonna go to jail. If it happens repeatedly, you may go to jail for the rest of your life," Warren said. "But evidently if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your bed at night --- every single individual associated with this. And I think that's fundamentally wrong."

Back in late 2011, The BRAD BLOG's legal analyst Ernie Canning cited the observation of Law Professor Paul Campos who noted that the U.S. today has not merely strayed from its guiding principle of Equal Justice Under Law but has adopted "a two-tiered system of laws" where, for the vast majority of citizens, "an unusually harsh criminal code" has given rise to "by far the biggest prison population in the world," yet "our political and financial elites operate with something approaching complete impunity."

That's what's going on here. That's what we're dealing with. And there seems that there is precious little being done about it, by anyone at this point, other than an occasional primal scream from Sen. Warren now that she has (thankfully) taken her place on the U.S. Senate Banking Committee.

But this entire fine mess, in a nutshell, is exactly what's wrong with our broken system, and why it's an embarrassment that a guy like Eric Holder is remaining on for a second term with the Obama Administration.

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Article Categories: Accountability, Dept. of Justice, Barack Obama, Chuck Grassley, Economy, Eric Holder, Bush Legacy, Elizabeth Warren