HSBC Under Investigation
for Drug Money Laundering
July 18, 2012 (EIRNS)The British HSBC bank, formerly known as the infamous Hongkong and Shanghai Banking Corporation, was founded in the 19th Century to finance the opium trade and invest its proceeds. That role has never ended. Today, the bank finds itself under multiple investigations for laundering money from drug traffic. Prior to a U.S. Senate investigative hearing on July 17, HSBC CEO Stuart Gulliver released an internal memo to staff, saying:
"Between 2004 and 2010, our anti-money laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behavior."
He said it is "right that we be held accountable and that we take responsibility for fixing what went wrong," while noting that HSBC is likely to face further action from other U.S. authorities in coming months. The fines involved could amount to $1 billion.
The hearing mentioned is scheduled by the Senate Committee on Homeland Security and Government Affairs' Permanent Subcommittee on Investigations, under the title "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History." It plans to investigate what happens
"when a global bank uses its U.S. affiliate to provide U.S. dollars, U.S. dollar services, and access to the U.S. financial system to high-risk affiliates, high-risk correspondent banks, and high-risk clients, using HSBC as a case study."
In addition, the former HongShang is under investigation by the U.S. Securities and Exchange Commission and the U.S. Department of Justice. Another probe by the U.S. Federal Reserve and Office of the Comptroller of the Currency found that there was significant potential for unreported money laundering or terrorist financing.
The money laundering from Mexico has direct implications for the Obama Administration. The House Committee, which is investigating the gunwalking operation to the Mexican Sinaloa drug cartel ("Operation Fast and Furious") announced it will include drug money laundering; but the Department of Justice refuses to cooperate.
The same Lanny Breuer who is implicated in the gunwalking was also involved in letting Wachovia Bank off with a slap on the wrist after it had been established that it was laundering drug money for the same Sinaloa cartel.
HSBC then moved in to take over the money-laundering activity of the cartel under the watchful eye of the Obama Administration.
Lyndon LaRouche has asked how much of the drug money was funneled into the 2008 Obama Presidential campaign. Indeed, a serious investigation would have to explore the relationship between gunwalking and drug money laundering, and whether there was a deal between the Obama campaign and the drug cartel.