riselikelions | What America Do I Live In If Not This One?

I'd like to see the flashy, well-dressed muggs like Eddie Mars spoiling their manicures in the rock quarry at Folsom, alongside of the poor little slum-bred hard guys that got knocked over on their first caper and never had a break since. That's what I'd like. You and me both lived too long to think I'm likely to see it happen. (from The Big Sleep, by Raymond Chandler.)

HSBC, one of the two largest financial institutions in the world, were fined on December 12th, 1.9 billion dollars for among other things, laundering money for Colombian and Mexican drug cartels as well as from Saudi terrorists, the North Koreans and the Cubans. The United States government is very proud of this number. It's the biggest number in the government's history. I find that number disappointing.

Now, out of context, that's a big number. 1.9 billion's a lot of money. To anyone.

But here's why I think it's sad: According to its 2011 statements, HSBC's net profits were 16.22 billion. Its total assets, 2.55 trillion. To make the rounding easy, HSBC got fined 1/8th of its net profits for 2011 for at least a decade of laundering money in service of a murderer's row of the world's least responsible citizens. Or, compared to its total assets, not even 1/1000th. I'd say it's a fraction of their assets, but that's being disingenuous with the word fraction. On $2.5+ trillion, $1.9 billion is almost too small to be considered a rounding error.

And this is a civil case, too. Not a criminal one. Why? Our government found HSBC too big to indict. The words of our Justice Department was that "criminal charges could jeopardize one of the world's largest financial institutions." Well, yes. They were employed by evil men to launder their ill-gotten gains. If this behavior comes to light it is going to be harder to get work from supposedly more honest citizens. That's what the law is for.

Here's the part that I'm saddened, but armored to: None of the people at the top, who gave the order, will go to prison. That's part of the deal.

Here's the part that I'm not armored to: You know what's also counting towards that 1.9 billion number? Partially deferred compensation. Meaning, as part of the United States' most stringent, toughest effort to root out financial corruption they levied the harsh penalty of executives not having access to their cut of blood money for five years.

To bring this back to the epigraph, anyone reading this with fifteen minutes on the New York Times website can find a sob story about a kid who smoked a little and got busted, beaten and thrown in prison for a couple days to serve the law of the land. But, if you are a blue chip financial institution and you are employed by criminal manufacturers, and you get caught, you will not even spend an hour in prison. Hell, you may only have to wait a couple years to use your sticky money.

Tabbai's angrier than I am. And he writes it better. So, go read what he wrote. I was angry for 24 hours straight when I first read that. Now? I'm just tired and I feel older and weaker and sadder than I've felt in years.