A federal judge ruled last week that the Hong Kong and Shanghai Banking Corporation (HSBC) will be forced to share a report on its business practices with the public — a decision both the bank and the Department of Justice (DOJ) fought in court to prevent. The report is based on the findings of an ongoing government audit of the bank initiated amid revelations in 2012, that it laundered money for drug cartels and terrorist organizations.
When HSBC’s sordid dealings were discovered in 2012, the DOJ declined to press charges, arguing the bank was too important to prosecute. As the Guardian reported at the time, Assistant Attorney General Larry Breuer argued “the Justice Department had looked at the ‘collateral consequences’ to prosecuting the HSBC or taking away its US banking license. Such a move could have cost thousands of jobs, he said.”
Further, “Had the US authorities decided to press criminal charges,” theGuardian summarized, “HSBC would almost certainly have lost its banking license in the US, the future of the institution would have been under threat and the entire banking system would have been destabilized.”
The DOJ’s refusal to prosecute those responsible was widely criticized, as HSBC was found to have laundered over $850 million for cartels, while also laundering money for Saudi banks with ties to terrorist groups. The bank also helped nations like Libya and Iran bypass American financial laws. The lack of punishment for these transgressions appeared to reveal a double standard.