Loretta Lynch, Democrats and Wall Street
The insatiable criminals who infest Wall Street got another signal yesterday from Obama that they have nothing to worry about. Loretta Lynch is being tapped to replace Holder, and for Democrats more interested in identity politics than substance, I’m sure there will be some excitement that Lynch would be the first black female Attorney General. That’s the NPR headline, anyway.
Here’s another NPR article from March of this year worth highlighting about a particular bank’s cozy relationship with a barbaric drug cartel:
The Sinaloa Cartel, headquartered on Mexico’s northern Pacific Coast, is constantly exploring new ways to launder its gargantuan profits. The State Department reports that Mexican trafficking organizations earn between $19 and $29 billion every year from selling marijuana, cocaine, heroin and methamphetamines on the streets of American cities.
And Sinaloa is reportedly the richest, most powerful of them all, according to the Drug Enforcement Administration. The capture last month of the Mexican druglord Joaquin “Chapo” Guzman has cast a spotlight on the smuggling empire he built.
One key to the Sinaloa Cartel’s success has been to use the global banking system to launder all this cash.
“It’s very important for them to get that money into the banking system and do so with as little scrutiny as possible,” says Jim Hayes, special agent in charge of Homeland Security Investigations for the New York office of Immigration and Customs Enforcement, or ICE. He was lead agent in the 2012 case that revealed how Sinaloa money men used HSBC, one of the world’s largest banks, as their private vault.
ICE says in 2007 and 2008, the Sinaloa Cartel and a Colombian cartel wire-transferred $881 million in illegal drug proceeds into U.S. accounts.
Sounds like a serious crime, right? Who is going to hold this bank accountable for laundering hundreds of millions of blood-soacked drug money? Loretta Lynch, that’s who:
WASHINGTON – HSBC Holdings plc (HSBC Group) – a United Kingdom corporation headquartered in London – and HSBC Bank USA N.A. (HSBC Bank USA) (together, HSBC) – a federally chartered banking corporation headquartered in McLean, Va. – have agreed to forfeit $1.256 billion and enter into a deferred prosecution agreement with the Justice Department for HSBC’s violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). According to court documents, HSBC Bank USA violated the BSA by failing to maintain an effective anti-money laundering program and to conduct appropriate due diligence on its foreign correspondent account holders. The HSBC Group violated IEEPA and TWEA by illegally conducting transactions on behalf of customers in Cuba, Iran, Libya, Sudan and Burma – all countries that were subject to sanctions enforced by the Office of Foreign Assets Control (OFAC) at the time of the transactions.
The announcement was made by Lanny A. Breuer, Assistant Attorney General of the Justice Department’s Criminal Division; Loretta Lynch, U.S. Attorney for the Eastern District of New York; and John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); along with numerous law enforcement and regulatory partners. The New York County District Attorney’s Office worked with the Justice Department on the sanctions portion of the investigation. Treasury Under Secretary David S. Cohen and Comptroller of the Currency Thomas J. Curry also joined in today’s announcement.
What sounds like a lot of money is chump change to a bank like HSBC. They pay a fine, no jail time, and usually gag orders all around so no one can talk about the details of the criminality we citizens now meekly accept.
While the appointment of Loretta Lynch will be met with knee-jerk obstruction by Republicans, another woman is exhibiting the courage our boot-licking public officials sorely lack. Her name is Alayne Fleischmann, a woman Rolling Stone describes in this article as JP Morgan Chase’s worst nightmare. Why? Because she’s defying the gag order her bosses paid a cool 9 billion to place on her whistle-blowing. Here’s how the Rolling Stone piece describes the cash for secrecy approach of Holder’s office:
Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.
Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as “massive criminal securities fraud” in the bank’s mortgage operations.
Thanks to a confidentiality agreement, she’s kept her mouth shut since then. “My closest family and friends don’t know what I’ve been living with,” she says. “Even my brother will only find out for the first time when he sees this interview.”
Six years after the crisis that cratered the global economy, it’s not exactly news that the country’s biggest banks stole on a grand scale. That’s why the more important part of Fleischmann’s story is in the pains Chase and the Justice Department took to silence her.
She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. “Every time I had a chance to talk, something always got in the way,” Fleischmann says.
This past year she watched as Holder’s Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called “statements of facts,” which were conveniently devoid of anything like actual facts.
And now, with Holder about to leave office and his Justice Department reportedly wrapping up its final settlements, the state is effectively putting the finishing touches on what will amount to a sweeping, industrywide effort to bury the facts of a whole generation of Wall Street corruption. “I could be sued into bankruptcy,” she says. “I could lose my license to practice law. I could lose everything. But if we don’t start speaking up, then this really is all we’re going to get: the biggest financial cover-up in history.”
I know some readers don’t like it when I use naughty words, but I continue to find this bullshit to be absolutely fucking insane.
There is some funny election analysis at the Cowgirl worth quoting here, especially from one commenter, “Drunks for Denny”, who wrote this:
The Democrats need to stop blaming dark money for all their woes, and start doing job of getting their message across. When the Republicans say “So and so voted with Obama 95% of the time”, So and so should respond with “Damn straight!” and tout the accomplishments of Obama Care, the Recovery, etc. instead of running away from him. Pandering to the stupidity of the average voter is insulting to the rest of us.
This is an idiotic message when you consider “the Recovery” is non-existent for most Americans. It was reported last year that 95% of the income gains since the “Great Recession” went to the 1%. Is this the Obama recovery Democrats should respond “Damn Stright!” in supporting? Hell no.
It looks like this commenter, who thinks average voters are stupid, should maybe read up on what has actually happened during Obama’s tenure. Instead, Drunks for Denny has this insightful response to an inquiry by another commenter about low turnout in Missoula:
No, the likely reason that Democrats did not fare as well as they usually do during a presidential election year in Missoula, is that the vast majority of Missoula Democrats are whacked out hippies who smoke a lot of weed. Perhaps yesterday Phish tickets went on sale at the Gorge. Who knows? It’s like when I toss a ball of yarn to my cat.
While Democrats can’t acknowledge their party is a part of the problem, average voters can, because their lives, generally speaking, haven’t improved these past 6 years.
If it’s the economy, stupid, then no one should be surprised when a papered-over economic catastrophe primed for the next crisis depresses turnout for Democratic candidates who can’t put enough distance between their campaigns and the complicity of their party in enabling the wolves of Wall Street.