HSBC Senate Report – Should HSBC Sue US Government?

Bloomberg were covering a story this morning regarding a Senate investigation into HSBC’s banking operations.

It appeared to me as if the US Senate were implying that HSBC were involved in illegal activities.

And this is why I ask if HSBC should consider suing the US Government for slander and libel.

The US Senate has accused HSBC of laundering drug money and supporting terrorism despite there being no supporting evidence.

The situation is an utter disgrace. Reuters wrote and excellent article detailing the simply massive errors in the Senate’s report.

The Reuters article also highlights how the Senate report’s conclusion are completely and utterly baseless.

Let me highlight some the key points raised in the Reuters article.

The Reuter starts out with the following, it quotes the report and it is this paragraph which makes me wonder if HSBC should sue.

A “pervasively polluted” culture at HSBC Holdings Plc allowed the bank to act as financier to clients seeking to route shadowy funds from the world’s most dangerous and secretive corners, including Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria, according to a scathing U.S. Senate report issued on Monday.

Apparently the US Senate feels it is appropriate to label a business’s culture as “pervasively polluted” because of things that might be “shadowy” and “secretive”. Without stating any facts the Senate merely exposes its prejudice towards certain countries and then casts the aspersion that HSBC’s culture is polluted because HSBC does not agree with the prejudice of the US Senate.

The Senate report goes on

Between 2007 and 2008, HSBC’s Mexican operations moved $7 billion into the bank’s U.S. operations. According to the report, both Mexican and U.S. authorities warned HSBC that the amount of money could only have reached such a level if it was tied to illegal narcotics proceeds.

again, without presenting any evidence “US Authorities” feel it is appropriate to accuse HSBC of laundering drug money.

The Senate report then goes on to accuse a Saudi bank of having links to terrorism despite the same bank suing the Wall Street Journal for the same allegation and winning.

The Senate probe also examined banking HSBC did in Saudi Arabia with Al Rajhi Bank, which the report said has links to financing terrorism.

Apparently this legal victory vindicating the honesty of the Saudi bank Al Rajhi means absolutely nothing to the US Senate.

To accuse a bank of terrorism links despite the fact that this same bank successfully sued another party for saying the same things shows either a complete lack of respect for the good name of private companies or the US Senate is happy to fight legal battles at the expense of the US taxpayer, assuming of course Al Rajhi does sue the US government from restating an allegation that has already been shown to be wrong.

HSBC highlights the simply huge administrative burden that has been puts on banks since 9/11 but this cuts no ice with the US Senate.

Employees were “overwhelmed” by a mounting number of suspect transactions that needed review.

“We’re strapped and getting behind in investigations,” one bank official wrote in June 2008. By that time, HSBC was cutting costs to offset losses tied to subprime home loans and the brewing financial crisis. In 2010, one disgusted top compliance official threw up his hands and quit after less than a year on the job, according to the report.

The report goes on

Some of the money that moved through HSBC was tied to Iran, the report said, which would violate U.S. prohibitions on transactions linked to it and other sanctioned countries.

Again, the illogical prejudice that the US government has towards Iran is classed as criminal or “wrong” if another party does not agree with the prejudice of the US government.

The whole story and the whole Senate investigation smells to me like one massive shakedown of HSBC.

Any business which acts in a way that the US government does not agree with gets thrown under the public microscope and has its brand damaged by the US government.

It is shakedown to stop other businesses from going against the agenda of the US government.

How the USA got to this point I do not know.

How law makers can now influence the private economy in such a blatant way is extremely worrying and strikes me as faintly fascist.

The US government is being used to serve the interest of a few people.

If HSBC has committed any offenses then it should be dealt with in a court  of law and not in the public limelight which allows the politicians to throw mud at a private institutions with apparent impunity.

When did it become acceptable for politicians to berate private businesses with no evidence?

When did it become acceptable for government officials to threaten and bully private institutions as a way of manipulating them?

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