Gretchen Morgenson writes in the New York Times about the congressional report titled “Too Big to Jail” issued by Texas Republican Jeb Hensarling’s House Financial Services Committee.
Have you ever wondered why the crippling 2008 financial crisis generated almost no criminal prosecutions of large banks and their top executives?
Then take a moment to read the congressional report issued on July 11 titled “Too Big to Jail.” Citing internal documents that the United States Treasury took three years to produce, the report shows how regulators and prosecutors turned a potential criminal prosecution of a large global bank — HSBC — into a watered-down settlement that insulated its executives and failed to take into account the full scope of the bank’s violations.
The report, prepared by the Republican staff of the House Financial Services Committee, does not examine a matter related to the mortgage crisis. Rather, it looks at the Department of Justice’s 2012 settlement with HSBC, the British banking behemoth, after accusations that it laundered nearly $900 million for drug traffickers and processed transactions on behalf of Cuba, Iran, Libya, Sudan and Myanmar, or Burma, when those countries were subject to United States sanctions.
That it took the House committee so long to receive the information from the Treasury Department once again raises questions about transparency in government, something the Obama administration has called a top priority.
“Treasury improperly impeded the committee’s investigation” for nearly three years before producing certain subpoenaed records, the report said. The department’s production of records “is missing dozens, if not hundreds, of pages,” the report said.
But Jeb Hensarling, the Texas Republican who heads the House Financial Services Committee, doesn’t buy it. “If an incomplete response to the committee after three years and the threat of deposition subpoenas isn’t stonewalling, I don’t know what is,” he said in a statement. “After these revelations, if the Obama administration refuses to be transparent, produce the documents that it is withholding and address the urgent questions that this report has raised, the American people need to ask why.”
By shedding light on the HSBC matter, the report is “the best kind of anticorruption action,” said Edward J. Kane, a professor of finance at Boston College and an authority on regulatory failures. “The fact that so many of these cases are settled rather than going to court means we don’t get an airing of facts and challenges of facts.”
Read the rest here.