As the Department of Justice considers whether or not to bring criminal charges against mega-bank HSBC and its executives over its role in helping American clients avoid paying taxes, only a handful of members of Congress have spoken up about punishments for those involved.
Sen. Elizabeth Warren (D-MA) has said that prosecutors should “come down hard” on HSBC if the claims against it are true.
In a statement to The Guardian, Warren said,
“The government comes down hard on individuals who break the law time after time, and it should do the same for large financial institutions. The new allegations that HSBC colluded to help wealthy people and rich corporations hide money and avoid taxes are very serious, and, if true, the Department of Justice should reconsider the earlier deferred prosecution agreement it entered into with HSBC and prosecute the new violations to the full extent of the law.”
Sen. Sherrod Brown (D-OH), the ranking member of the Senate banking committee, also called for government action in regards to the leaked files that showcased HSBC’s illegal activities.
“I will be very interested to hear the government’s full explanation of its actions – or lack thereof – upon learning of these allegations in 2010,” said Brown.
In the wake of these new findings against HSBC, financial regulation advocates from the United Kingdom have echoed what Sens. Brown and Warren have said. David Hillman of the UK Robin Hood Tax campaign said the leaks exposed “once again the rotten core of banking.” He continued in saying the bank’s action “shows a sector not content with dodging its own obligations, but also conniving to help the richest people shirk their responsibilities to society as well.”
HSBC didn’t just help wealthy Americans avoid taxes, it appears that it might have also aided Mexican drug cartels transfer funds (or at least looked the other way), and possibly helped “clients sidestep US sanctions against Cuba, Sudan and Iran.”
Under HSBC’s original settlement in 2012, the bank was fined $2 billion and was put on a five-year-reform plan to be overseen by an independent monitor, The Guardian reported. Part of the deal obliged HSBC to “fully cooperate with prosecutors on any other investigations and commit no crimes” during the five-year period.
Regarding the HSBC’s settlement, Sen. Brown said, “If the charges are true, the same institution that was first caught violating US sanction laws and laundering money for Mexican drug cartels could then escape accountability for promoting widespread evasion of US tax laws. I intend on pressing regulators, the IRS, and the [Department of Justice] for answers.”
During a prior Senate banking committee hearing, Warren asked, “How many billions of dollars do you have to launder for drug lords, and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?”
Warren and Brown right for calling for harsh punishments for both the bank and its executives. Fining banks hasn’t stopped their corrupt behavior – the penalties so far are just drops in a bucket for the “too big to fail” financial institutions. More politicians, regardless of party affiliation, should join them in calling for real and decisive action against the guilty parties. Banks like these have essentially stolen millions of dollars from the US and they deserve to be held accountable for their criminal actions.
Joshua de Leon and Amy Eddings both contributed to this report.