To learn more about this topic, visit AL.Law
Via America’s Lawyer: Mike Papantonio and Attorney Chris Paulos talk about how the federal government allowed global banks to go unprosecuted after admitting to laundering money for terrorist organizations.
Transcript:
Mike Papantonio: The US has been engaged in the War on Terror for more than a decade, with hundreds of billions of dollars being spent on bombs, jets, and drones that have done little more than make defense contractors rich. And while our government has been eager to fatten the wallets of defense contractors, they’re virtually ignoring one of the most effective ways to go after terrorists around the globe, and that’s to cut off their money.
The reason they’re not going after that money is because some of the biggest banks in the world, the same banks that Congress wants to deregulate even further, are helping to launder money for terrorist groups. In 2015 UBSAG paid millions of dollars to defend and settle what was characterized was violations of US terrorism sanctions. They thought it was a good idea to process hundreds of transactions worth millions of dollars for entities that had been placed on terrorist blacklists. They’d been warned about the terrorism blacklisting, but chose to ignore those warnings and take profits anyway.
In 2016, HSBC was sued for laundering money for the cartel terrorists who murdered Americans. The case was initiated in the Texas Federal Court and maintained that the London based HSBC Bank had provided continuous, systematic support for laundering cartels terrorist money. In 2012, Obama’s then Attorney General Eric Holder fined HSBC almost two billion dollars for engaging in cartel terrorist money laundering, and as you would expect for America’s justice department, nobody went to jail.
But as is usually the case when the government fails to act, civil lawsuits brought by lawmakers and lawyers, they’re there to protect the slack and in the last few years we’ve seen a huge increase in the number of suits being filed against these criminal banking enterprises that help terrorists send money all over the globe.
Joining me to talk about this is attorney Chris Paulos. Chris, give us the big picture. How are these banks playing a role in actually financing terrorism? There’s no question that that’s going on, but most Americans don’t understand how they go about doing it.
Chris Paulos: Well, Pap, it’s a common refrain that the lifeblood of terrorism is money. And that’s absolutely true. Terrorism couldn’t exist without sophisticated financing and ways in which money can be exchanged to provide material support, and the farm of training, munitions, and so forth, even safe haven for terrorists. And in order to transfer money, or to get access to money, they need access to the US financial system and the global financial system. And banks, and other financial institutions, have been more than happy to provide that for terrorist organizations, and fronts for terrorist organizations.
Mike Papantonio: Tell us how banks can be held liable. There’s a pretty big threshold that has to be met. How are you going after the banks?
Chris Paulos: Well, under US federal laws, specifically the Anti Terrorism Act, those who provide financial support, or material support, to terrorist organizations can be held liable. Now banks can either knowingly provide that support, or can recklessly provide that support. And oftentimes, banks don’t have the necessary compliance tools, or don’t use the tools that they’re required to in order to track their customers, or to know their customers better.
And so, banks will provide financial services to organizations that have checkered pasts, or that have business dealings with individuals that have been designated by the US government and other governments globally, as terrorist organizations. And it’s the bank’s duty to understand who they’re doing business with. And what we’ve seen over the last two decades, is that they’ve just simply turned a blind eye to that duty.
Mike Papantonio: You know, back in 2012 the guy called “Let ’em go” Eric Holder, hit HSB with a fine of almost two billion dollars for their role in laundering money for terrorists. But you know what, there again, Eric Holder let them go. The Obama administration let them go, nobody went to jail, and we found after 2012, they just started it all over again. They had documents, Chris, as you know, that was very clear who made the decisions in the bank. They didn’t have to arrest the bank and throw the bank in jail, they knew the people involved, they had the names of the people involved that made these decisions, but Eric Holder … and let me just preface it this, people don’t realize Eric Holder comes from a law firm that actually represents these types of white collar criminals, he’s back with them, by the way, Covington Burling in Washington DC. So he’s used to defending these white collar criminals, but to have them dead to rights and let them go like he did, it’s pathetic, and most people don’t even know that story, do they?
Chris Paulos: No, unfortunately, it did get a little press, but not a lot, not as much as you’d expect, when these banks actually have admitted to the wrongdoing, they’ve admitted that they were processing hundreds of billions of dollars in transactions for entities that they weren’t either keeping track of, or that were known to be affiliated with terrorist organizations. And they were simply slapped on the wrist. A two billion dollar fine for a bank like HSBC is a week’s worth of profits, it’s nothing, it’s now essentially a cost of doing business, and a perfect example of the revolving door policies that we see coming out of Washington when folks who are charged with regulating certain industries, specifically the financial industry, who are holding out for a better job in the private sector, usually with one of these banks that they’re investigating, or trying to hold accountable.
Mike Papantonio: Well what’s so amazing on this is that they actually wrote out a document where they said, “Yes, we did this. Yes, we laundered money. Yes, we knew it was going for terrorists. Yes, we know people would be affected, killed by that process.” They actually signed a document to that effect, Eric Holder had all he needed to do to throw these white collar thugs in prison, and took a pass on it, didn’t do it, and then, after he left the Attorney General’s office, he goes to work with Covington Burling, which represents some of these same people.
You know, there was a massive Congressional investigation into this issue not long ago. Can you tell us what that investigation found?
Chris Paulos: You’re right, Pap. Congress investigated specifically HSBC and what it’s conduct was related to providing financial services to drug cartels, as well as state sponsors of terrorists such as Iran, and other designated entities. And Congress essentially uncovered what was happening inside this bank, and it was revealed, at that time, that HSBC was doing this, they knew they were doing it, they were internally flagging accounts for closure because of the risks associated with those accounts, and then never closing the accounts because the money, through the drug cartels and the terrorist organizations, was just too good for HSBC to turn down.
And unfortunately, they didn’t stop doing it when they should have, and this clearly financed many of the drug cartels, and many terrorist organizations in the Middle East. Ultimately, HSBC never denied that that’s what they did. They went in front of Congress and said, “Yes, we did this. And we will do better.” That was it. So, they essentially came clean, but that’s all that came of it, was a pittance of a fine at the end of the day.
Mike Papantonio: Yeah, what if the average American, Chris, appeared in front of Congress and said, “Yeah, we washed money for people that we knew were involved in the process of killing Americans. Yeah, we did that. As a matter of fact, we knew exactly what we were doing, and oh, by the way, we made a lot of money doing that.” What if the average American appeared in front of Congress and testified to that? But that’s what happened in this country, and Eric Holder and the Obama administration, allowed it to happen. And nobody was prosecuted, and because of that, we know see that other banks were also involved as well, right? We’ve got other people involved besides HSBC. You brought a lawsuit against these banks, didn’t you?
Chris Paulos: It’s pretty shocking, Pap. I mean, the black letter of the law shows that there’s no difference between somebody who commits terrorism and somebody who financed terrorism. Same with drug cartels. If you finance drug cartels, or wash their money, or launder their money, you might as well be the drug cartel itself. But you can bet your bottom dollar that if the drug cartel, or the leader of Hezbollah came in front of Congress or the Department of Justice and said, “You know what, I’ll just give you two billion dollars, and don’t prosecute me,” you know the US government wouldn’t take that deal. But yet when it’s got the cloak of a corporation, or when it’s a global bank and white shoe firms helping grease the skids, you get these types of deals, and you see the imbalance of justice.
Mike Papantonio: Yeah, I mean we expected this from the Bush administration, but when you had Obama come into office, and he said, “Look, you know, we’re going to change the way we do business in DC where it comes to corporate criminals.” So it wasn’t just Eric Holder, it was Loretta Lynch who came after him, she had all of the information, they make this big proclamation about … I remember the press conference, like, “Oh, this is huge, we got two billion dollars.” And somebody in the audience asked, “Well, who did you prosecute?” And they said, “Well, we’re not really going to … ” It was the most ridiculous exchange between the Justice Department and the questions out in the audience by the reporters saying, “Wait, I don’t get this. They just admitted that they engaged in criminal conduct that cost American’s lives, and nobody’s being prosecuted.”
So after that, as you would expect, other banks said, “Well, heck, we’ll do it too.” Isn’t that kind of what happened here?
Chris Paulos: Yeah, it’s essentially what HSBC was doing wasn’t any different than what other global banks were doing, and since then, other global banks too have been arm wrestled to the negotiating table and have been able to pay fines to get out from underneath criminal investigations, while admitting that they were also providing financial transactions to drug cartels and terrorists. And not only that, these banks were teaching these individuals and entities how to get away with masking these financial transactions. So even if these banks were to stop what they were doing, they’ve already trained the bad actors on how to do it, and so these folks will just go to another bank and do the same sorts of things.
Mike Papantonio: Well, you know, as I say, Eric Holder after … first of all, sorry, here. Covington Burling represented most of these same banks. So he’s Attorney General, he gives them a free pass for murder, actually mass murder of Americans. Then after he does that, he goes back to work for Covington Burling. Seems to be like there ought to be a Congressional investigation of that.
Look, how successful do you think these lawsuits can actually be in not only helping victims recover damages, but also in preventing future damages, what’s your take?
Chris Paulos: I think these lawsuits will be successful, Pap, particularly when we’re starting to see de-regulations, or regulations being rolled back by the current administration. Somebody has to hold these banks accountable, and it’s going to be the people who themselves who were actually injured by these terrorists and these drug cartels who can use the current federal laws under the Anti Terrorism Act, to hold these banks responsible. We think the facts are very strong, we think the evidence is very strong, so we think that we can-
Mike Papantonio: Yeah, I can-
Chris Paulos: Will be successful in these lawsuits.
Mike Papantonio: Go get ’em Chris, and don’t … show enough facts to where you’re going to embarrass, I want you to embarrass the Department of Justice. I want you to embarrass Eric Holder and Loretta Lynch for what they’ve done here, and then maybe the next time this happens an Attorney General will be a little less likely to let criminal murderers go free because they simply happen to have a lot of money.
Thanks for joining me.
