David Dayen: Eric Holder’s Longtime Excuse for Not Prosecuting Banks Just Crashed and Burned


Eric Holder has long insisted that he tried really hard when he was attorney general to make criminal cases against big banks in the wake of the 2007 financial crisis. His excuse, which he made again just last month, was that Justice Department prosecutors didn’t have enough evidence to bring charges.

Many critics have long suspected that was bullshit, and that Holder, for a combination of political, self-serving, and craven reasons, held his department back.

A new, thoroughly-documented report from the House Financial Services Committee supports that theory. It recounts how career prosecutors in 2012 wanted to criminally charge the global bank HSBC for facilitating money laundering for Mexican drug lords and terrorist groups. But Holder said no.

When asked on June 8 why his Justice Department did not equally apply the criminal laws to financial institutions in the wake of the 2008 economic crisis, Holder told the platform drafting panel of the Democratic National Committee that it was laboring under a “misperception.”

He told the panel: “The question you need to ask yourself is, if we could have made those cases, do you think we would not have? Do you think that these very aggressive U.S. attorneys I was proud to serve with would have not brought these cases if they had the ability?”

The report — the result of a three-year investigation — shows that aggressive attorneys did want to prosecute HSBC, but Holder overruled them.

In September 2012, the Justice Department’s Asset Forfeiture and Money Laundering Section (AFMLS) formally recommended that HSBC be prosecuted for its numerous financial crimes.

The history: From 2006 to 2010, HSBC failed to monitor billions of dollars of U.S. dollar purchases with drug trafficking proceeds in Mexico. It also conducted business going back to the mid-1990s on behalf of customers in Cuba, Iran, Libya, Sudan, and Burma, while they were under sanctions. Such transactions were banned by U.S. law.

Newly public internal Treasury Department records show that AFMLS Chief Jennifer Shasky wanted to seek a guilty plea for violations of the Bank Secrecy Act. “DoJ is mulling over the ramifications that could flow from such an approach and plans to finalize its decision this week,” reads an email from September 4, 2012, to senior Treasury officials. On September 7, Treasury official Dennis Wood describes the AFMLS decision as an “internal recommendation to ask the bank [to] plead guilty.” It was a “bombshell,” Wood wrote, because of “the implications of a criminal plea,” and “the sheer amount of the proposed fines and forfeitures.”

But after British financial minister George Osborne complained to the Federal Reserve chairman and the Treasury Secretary that DOJ was unfairly targeting a British bank, senior Justice Department leadership reportedly sought to “better understand the collateral consequences of a conviction/plea before taking such a dramatic step.”

The report documents how Holder and his top associates were concerned about the impact that prosecuting HSBC would have on the global economy. And, in particular, they worried that a guilty plea would trigger a hearing over whether to revoke HSBC’s charter to do banking in the United States.

According to internal documents, the DOJ then went dark for nearly two months, refusing to participate in interagency calls about HSBC. Finally,on November 7, Holder presented HSBC with a “take it or leave it” offer of a deferred prosecution agreement, which would involve a cash settlement and future monitoring of HSBC.

No guilty plea was required.

But even the “take it or leave it” offer was apparently not the last word. HSBC was able to negotiate for nearly a month after Holder presented that offer, getting more favorable terms in the ultimate $1.9 billion deferred prosecution agreement, announced on December 11, 2012.

The original settlement documents would have forced any HSBC executive officers to void their year-end bonuses if they showed future failures of anti-money laundering compliance. The final documents say that, in the event of such failures, senior executives merely “could” have their bonuses clawed back.

In addition, HSBC successfully negotiated to have individual executives immunized from prosecution over transactions with foreign terrorist organizations and other sanctioned entities, even though the original agreement only covered the anti-money laundering violations and explicitly left open the possibility of prosecuting individuals.

As a Justice Department functionary in 1999, Holder wrote the infamous “collateral consequences” memo, advising prosecutors to take into account economic damage that might result from criminally convicting a major corporation.

In 2013, he unwittingly earned his place in history for telling the Senate Judiciary Committee, “I am concerned that the size of some of these [financial] institutions becomes so large that it does become difficult for us to prosecute them,” which became known as the “Too Big to Jail” theory.

Holder told the Democratic platform drafting committee that “it was not lack of desire or lack of resources” that led to the lack of prosecutions for any major bank executive following the financial crisis. “We had in some cases statutory and sometimes factual inabilities to bring the cases that we wanted to bring,” he said.

The HSBC case, however, shows that lack of desire at the highest levels of the Justice Department was indeed the primary reason that no prosecutions took place……..

For remaining story click here.

8 Responses

  1. People of power are PUT IN A POSITION OF POWER for a reason
    Talk about ” the worlds a stage” they all deserve oscars

  2. Trading with the enemy is “Treason”.

    The US is currently fighting a “War on Drugs” and a “War on Terror”.

    American GIs have suffered and died, in both conflicts.

    The US Department of Justice and the banks involved, refuse to disclose these banks are using American mortgages to launder terror and drug cartel money.

    Comey and Lynch are linked to “HSBC- Hong Kong and Shaghai Banking Corp”.

    HSBC, Wells Fargo and Bank of America are already proven as using American mortgages to launder terror and drug cartel money.

    Judge Gleeson, in Manhattan, threatened to publish a “Deferred Prosecution Agreement- or, PDA”. He now works for the banks- he stepped down and left exposing the “PDA” to his successor, Judge Donnelly.

    Before stepping down, Judge Gleeson wrote: The Information also charges HSBC Holdings plc (“HSBC Holdings”) with willfully facilitating financial transactions on behalf of sanctioned entities in violation of the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. §§ 1702 & 1705, and the Trading with the Enemy Act (“TWEA”), 50 U.S.C. App. §§ 3, 5, 16. See id

    You may read the court document here:
    Case 1:12-cr-00763-JG Document 23 Filed 07/01/13

    The “DPA” acknowledges criminal behaviors exist. The US DOJ and HSBC- an English-Chinese hybrid don’t want American Citizens to see what is going on and Director Comey was on the board of that bank, even as Lorretta Lynch has refused to bring them to account.

    FBI Director Comey board member of HSBC – Clinton…
    More Obama-HSBC Collusion: Obama Picked FBI…
    Comey Oversaw Drug Cartel Money Laundering…
    FBI Director Comey was board member of HSBC –…
    Comey Oversaw Drug Cartel Money Laundering…
    Comey / Clonton HSBC Money (vanity) -…
    Comey Oversaw Drug Cartel Money Laundering…
    Will HSBC Deal Come Back to Haunt Loretta Lynch? |…
    Attorney General Nominee Loretta Lynch Omitted …
    Where are the “Progressive” Democrats on Loretta …
    Loretta Lynch let HSBC skate despite Iran…
    Loretta Lynch’s First Test Will be HSBC » THE…
    AG nominee Loretta Lynch defends British bank…


    Senator Sanders, We The People and Abe Lincoln’s Greenback

    ~ Michael Keane 7/14/16

    Please share this post.

    Minister Milner a confidant and fellow, self-described, “race patriot” to Cecil Rhodes, is now known as the author to the “Balfour Declaration” that created for “Zionist Jews” a “National Jewish Homeland” in Palestine.

    Cecil Rhodes may be best known for creating “Rhodesia”, now “South Africa”. Of course, Rhodesia is best known for “Apartheid”, while South Africa may best be known for Nelson Mandela. (see a pattern here: oppress indigenous peoples and seize their territory through thuggery; ultimately to gain control of their mineral rights).

    Bill Clinton is a “Rhode’s Scholar” (a “race patriot”).

    Cecil Rhodes used his Irish friend, Jameson, to invade the interior of Africa, the “Transvaal”, in order to ultimately dominate the subcontinent. The Transvaal was under Dutch control. Of course, the Jameson Raid ultimately led to World War I.

    The Kipling poem, “If”, came from Jameson’s attempt to rob the Dutch Territories. Great poem.

    Anyway, the Clintons are creatures of the “English-based”, central banking system and they are currently involved, through their minions, in an attack on the Sovereignty of the United States: see, 1200 Trillion in derivatives.

    Bill Clinton deregulated “derivatives” and in so doing, he allowed the bankers to ruin the US dollar (1200 trillion is an impossible sum of money).

    FBI director Comey sat on the board of HSBC Bank (Hong Kong Shanghai Banking Corp- an English-Chinese hybrid), at a time when it was known HSBC Bank was using American Mortgages to launder Terror and Drug Cartel money…

    So: the Clintons deregulated “derivatives” and crippled “Glass-Steagall” as an attack against US finances and US property rights … and … Comey knew it and so does Holder and Lynch. PBO is a “black face” on “Imperialism”; of that, there is no doubt.


  3. Justice Department prosecutors didn’t have enough evidence to bring charges.

    Any drunk could prove that there are fraud in assignment of mortgages and thereby creation of false and fraudulent securities.


  4. Also note how little coverage of this issue shows up in any of the standard media outlets.

  5. In August of 2008 just prior to Bush warning of a financial melt down the DOJ Prosecution Handbook (official document) was changed to specify that only the corporate entity and not officers were to be prosecuted. It was some timely bullshit. Look it up!

  6. He’s full of bulls**t. PERIOD!!!

Contribute to the discussion!

%d bloggers like this: