Bankers profit from criminal behavior and are immune to prosecution
This NY Times editorial points out how criminal behavior by banks is not prosecuted, regardless of the costs to the public.
When the Justice Department recently closed its criminal investigation of Goldman Sachs, it became all but certain that no major American banks or their top executives would ever face criminal charges for their role in the financial crisis.
Justice officials and even President Obama have defended the lack of prosecutions, saying that even though greed and other moral lapses were evident in the run-up to the crisis, the conduct was not necessarily illegal.
But that characterization of the financial industry’s actions has always defied common sense — and all the more so now that a fuller picture is emerging of the range of banks’ reckless and lawless activities, including interest-rate rigging, money laundering, securities fraud and excessive speculation. . .
And this piece by Roberto Saviano perhaps helps explain how banks learned criminal behavior so well:
THE global financial crisis has been a blessing for organized crime. A series of recent scandals have exposed the connection between some of the biggest global banks and the seamy underworld of mobsters, smugglers, drug traffickers and arms dealers. American banks have profited from money laundering by Latin American drug cartels, while the European debt crisis has strengthened the grip of the loan sharks and speculators who control the vast underground economies in countries like Spain and Greece.
Mutually beneficial relationships between bankers and gangsters aren’t new, but what’s remarkable is their reach at the highest levels of global finance. In 2010, Wachoviaadmitted that it had essentially helped finance the murderous drug war in Mexico by failing to identify and stop illicit transactions. The bank, which was acquired by Wells Fargo during the financial crisis, agreed to pay $160 million in fines and penalties for tolerating the laundering, which occurred between 2004 and 2007.
Last month, Senate investigators found that HSBC had for a decade improperly facilitated transactions by Mexican drug traffickers, Saudi financiers with ties to Al Qaeda and Iranian bankers trying to circumvent United States sanctions. The bank set aside $700 million to cover fines, settlements and other expenses related to the inquiry, and its chief of compliance resigned.
ABN Amro, Barclays, Credit Suisse, Lloyds and ING have reached expensive settlementswith regulators after admitting to executing the transactions of clients in disreputable countries like Cuba, Iran, Libya, Myanmar and Sudan.
Many of the illicit transactions preceded the 2008 crisis, but continuing turmoil in the banking industry created an opening for organized crime groups, enabling them to enrich themselves and grow in strength. . .
The costs of allowing banks to operate essentially free of stringent regulation is high indeed. Thank Philip Gramm of Texas for dismantling effective regulation when he was US Senator.