Monday, December 18, 2017
Editorials

A slap on the wrist for HSBC

First there was "too big to fail." Now, with HSBC, there is "too big to prosecute." The British bank's avoidance of criminal money laundering charges is just one more glaring example that if a financial institution is big enough it can escape the full consequences of its actions.

HSBC announced last week that it will pay $1.9 billion to settle allegations that it illegally provided a conduit for money from Iran, Cuba and Libya; moved money for Saudi Arabian banks tied to terrorist groups; and transferred the illicit proceeds of Mexican drug cartels. Yet despite the gravity of the alleged wrongdoing, federal and state prosecutors declined to indict HSBC because of fears that destabilizing one of the world's biggest banks would roil the broader financial system.

Without the prospect of criminal charges, society gives up a vital deterrent for bankers to act responsibly. Writing a big check from bank coffers simply doesn't strike the same fear in a banking executive's heart as the threat of a jailer or having his institution thought of as a criminal enterprise.

That impunity was apparent for years at HSBC. To expand its operations, HSBC virtually ignored U.S. law that tells banks they must report cash transactions of $10,000 or more and disclose suspicious activities by their customers. In 2010, the U.S. Office of the Comptroller of the Currency found that HSBC's internal controls were so lax it failed to review $60 trillion in transactions and 17,000 accounts that were potentially suspicious. The bank's standards didn't tighten up even after it was discovered that $7 billion in suspected Mexican drug proceeds was transferred to the United States.

Indicting HSBC for this conduct could have led to the loss of its charter to operate in the United States, spelling its demise. This spooked U.S. Treasury officials and federal financial regulators enough to wave the Justice Department off its efforts at gaining a criminal admission from HSBC, according to the New York Times. It isn't clear why banking executives weren't held to account for their bank's unlawful acts.

HSBC's case mirrors the 2008 financial crisis when the Bush and Obama administrations used billions of dollars in taxpayer money to prop up AIG and Wall Street banks that were teetering on insolvency because of reckless gambling. Like them, HSBC is so big and interconnected that normal rules don't apply.

By giving big banks a pass on reckless and lawless behavior to protect the larger financial system, the U.S. government feeds a growing cynicism that the game is rigged. Criminal prosecutions are essential to returning public confidence that the system is fair. If an institution truly is too big to prosecute, then it is too big to operate, and steps should be taken to address the imbalance by breaking it apart. The next HSBC should not get off so easily.

Comments

Editorial: Warren’s smart approach on guns, domestic violence

Hillsborough State Attorney Andrew Warren would make it safer for victims and police alike with his plan to remove firearms from defendants charged with domestic violence. These cases are toxic enough, and having guns at the ready only adds to a dang...
Published: 12/15/17
Editorial: St. Petersburg council right to reject Bayfront deal

Editorial: St. Petersburg council right to reject Bayfront deal

The St. Petersburg City Council made the difficult but correct decision this week to reject the proposed sale of a local nonprofit’s minority stake in Bayfront hospital. Despite months of negotiations, there were too many questions, a few suspicions ...
Published: 12/15/17
Editorial: Congress should fix flood insurance, children’s health insurance before Christmas

Editorial: Congress should fix flood insurance, children’s health insurance before Christmas

Here’s a snapshot of misplaced priorities in Washington. Last week, the Federal Communications Commission foolishly rushed to scrap net neutrality rules and allow internet service providers to treat different content differently despite overwhelming ...
Published: 12/14/17
Updated: 12/15/17
Editorial: Scott’s smart changes to sexual harassment policy

Editorial: Scott’s smart changes to sexual harassment policy

With misconduct allegations rippling through all levels of government, Gov. Rick Scott has taken the prudent step of ordering uniform sexual harassment policies throughout state agencies. The executive order strengthens protections for victims, which...
Published: 12/14/17
Updated: 12/15/17
Editorial: MOSI faces a clean slate and should give everyone a piece of chalk

Editorial: MOSI faces a clean slate and should give everyone a piece of chalk

For three years, the only news about finances at Tampa’s Museum of Science and Industry was bad news: "Struggling MOSI asks Hillsborough County for $400,000 loan," one headline read, "Audit sees MOSI finances slipping," read another, and "MOSI donor ...
Published: 12/14/17
Updated: 12/15/17
Editorial: Rubio should make good his threat to oppose tax cuts without changes

Editorial: Rubio should make good his threat to oppose tax cuts without changes

For once, it would be nice to see Sen. Marco Rubio stand up as the independent leader he aspires to become. For once, the Florida Republican should hold his position rather than bow to pragmatic politics. Rubio can stick with his threat Thursday to v...
Published: 12/14/17

Another voice: A shameful anniversary

Josephine "Joey" Gay should have celebrated her 12th birthday this week. She should have been surrounded by friends and family in a place festooned with purple, her favorite color.Chase Kowalski should have been working toward a Boy Scout merit badge...
Published: 12/13/17
Updated: 12/14/17
Editorial: Congress should block efforts to expand offshore drilling

Editorial: Congress should block efforts to expand offshore drilling

Timing is everything, and Sen. Bill Nelson seized the right moment this week to call on his colleagues to pass legislation he filed earlier this year that would block the Trump administration from opening additional areas to offshore drilling. With t...
Published: 12/13/17

Another voice: Alabama picks an honorable man

THANK YOU, Alabama.In Tuesday’s special election, the state by a narrow margin chose to spare the nation the indignity of seating an accused child molester in the U.S. Senate. Though the stain of electing Republican Roy Moore would have sullied Alaba...
Published: 12/12/17
Updated: 12/13/17
Editorial: Tax cuts aren’t worth harm to Tampa Bay

Editorial: Tax cuts aren’t worth harm to Tampa Bay

As congressional negotiators hammer out the details on an enormous, unnecessary tax cut, the potential negative impact on Tampa Bay and Florida is becoming clearer. The harmful consequences stretch far beyond adding more than $1.4 trillion to the fed...
Published: 12/12/17