Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Support Our Annual Fund Drive!
CounterPunch’s website is one of the last common spaces on the Internet. We are supported almost entirely by the subscribers to the print edition of our magazine and by one-out-of-every-1000 readers of the site.
FacebookTwitterGoogle+RedditEmail

Banks Don’t Go to Prison

by CHRISTOPHER BRAUCHLI

It was just an unfortunate coincidence that the reports were almost juxtaposed-the reports of the punishment given Stephanie George and that given HSBC and UBS.   Stephanie, of course, was not the first.

William James Rummel has been imprisoned since the late 1970s and will be there for the rest of his life.  That is because he was convicted of three crimes.  He used a credit card to obtain $80 worth of goods and services, a crime for which he served 3 years in jail.  When he got out he passed a forged check in the amount of $23.86 which bought him 4 years in jail.  He ended his career as an air conditioning repairman, charging a customer $120.75 for a repair with which the customer was not satisfied.  He refused to return the money and was convicted of obtaining money under false pretenses.  Since that was his third conviction he was sentenced to life in prison. In reviewing his sentence the U.S. Supreme Court said his life sentence did not constitute cruel and unusual punishment. Commenting on the Court’s finding Justice Rehnquist said: “We all of course, would like to think that we are ‘moving down the road toward human decency. . . .’ Within the confines of this judicial proceeding, however, we have no way of knowing in which direction that road lies.” Some legal cartographers could probably have helped the Justice out.

On December 12, 2012 the New York Times described the plight of Stephanie George. Her boyfriend stashed a lockbox with a half-kilogram of cocaine in her attic and when the police found it she was charged with its possession even though she claimed not to have known of its presence in her house.  The judge said he thought the sentence unreasonable but he was compelled by governing statutes to sentence Ms. George to  life in prison. In contemplating their fates Ms. George and Mr. Rummel (and many others) may well wonder how things could have come out differently for them.  The answer is, they should have been banks.  Banks don’t go to prison even though they are persons and even when their offenses involve billions of dollars.

On the same day that Ms. George’s plight was described,  HSBC agreed to pay $1.92 billion for worse things than failing to properly repair an air conditioning unit or store a bit of coke. According to the Senate Subcommittee on Investigations in a report issued in July 2012,  the bank “exposed the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering controls.”  The banks’ conduct enabled Mexican drug cartels to launder tainted money through the American financial system, and the bank worked closely with Saudi Arabian banks linked to terrorists.

The bank is a person for purpose of making political contributions to assorted candidates but it is not a person for purposes of being charged with criminal wrongdoing or  going to jail. A criminal indictment of either the bank person or a human person, we are told,  might place the institution at risk of collapse.  Critics can take comfort in knowing that the bank did not get off scot-free. In addition to paying $1.92 billion to settle the charges against it, it will enter into a deferred prosecution agreement that suggests if it or a human person doesn’t mend its ways criminal charges might yet be brought.  Lanny Breuer, the head of the Justice Department’s criminal division said that:  “HSBC is being held accountable for stunning failures of oversight-and worse-that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries.” Having described its actions he nonetheless defended the punishment saying  it was a “just, very real and very powerful result.”  He’s right.  $1.92 billion is a lot of money and it means that instead of HSBC having  a 2011 profit of $22 billion it will only have a profit of about $20 billion.

December 19  we learned that UBS had settled with U.S. and British regulators for having manipulated LIBOR rates.  (LIBOR is the interest rate banks charge each other for inter-bank loans.  Depending on what time period one is examining the bank was either reporting artificially high rates or artificially low rates in order to deceive regulators and/or make money.)  According to the Wall Street Journal, its review of a federal report suggests Fannie Mae and Freddie Mac may have lost more than $3 billion as a result of the manipulation of LIBOR. UBS is not facing criminal charges since they might  endanger its stability.  Its Japanese branch “has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including Yen Libor.”  The bank is not going to jail for the same reason HSBC is not going to jail.  Federal Regulators said if criminal charges were brought the bank’s stability would be threatened.

Mr. Rummel and Ms. George greatly regret the fact that they were not in the banking business.  Their incarceration has greatly affected their stability.

Christopher Brauchli is an attorney based in Boulder, Colorado. He can be reached at: brauchli.56@post.harvard.edu

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine

minimag-edit

September 26, 2016
Diana Johnstone
The Hillary Clinton Presidency has Already Begun as Lame Ducks Promote Her War
Gary Leupp
Hillary Clinton’s Campaign Against Russia
Robert Crawford
The Political Rhetoric of Perpetual War
Howard Lisnoff
The Case of One Homeless Person
Michael Howard
The New York Times Endorses Hillary, Scorns the World
Russell Mokhiber
Wells Fargo and the Library of Congress’ National Book Festival
Chad Nelson
The Crime of Going Vegan: the Latest Attack on Angela Davis
Colin Todhunter
A System of Food Production for Human Need, Not Corporate Greed
Brian Cloughley
The United States Wants to Put Russia in a Corner
Guillermo R. Gil
The Clevenger Effect: Exposing Racism in Pro Sports
David Swanson
Turn the Pentagon into a Hospital
Ralph Nader
Are You Ready for Democracy?
Chris Martenson
Hell to Pay
Frank X Murphy
Power & Struggle: the Detroit Literacy Case
Chris Knight
The Tom and Noam Show: a Review of Tom Wolfe’s “The Kingdom of Speech”
Weekend Edition
September 23, 2016
Friday - Sunday
Andrew Levine
The Meaning of the Trump Surge
Jeffrey St. Clair
Roaming Charges: More Pricks Than Kicks
Mike Whitney
Oh, Say Can You See the Carnage? Why Stand for a Country That Can Gun You Down in Cold Blood?
Chris Welzenbach
The Diminution of Chris Hayes
Vincent Emanuele
The Riots Will Continue
Rob Urie
A Scam Too Far
Pepe Escobar
Les Deplorables
Patrick Cockburn
Airstrikes, Obfuscation and Propaganda in Syria
Timothy Braatz
The Quarterback and the Propaganda
Sheldon Richman
Obama Rewards Israel’s Bad Behavior
Libby Lunstrum - Patrick Bond
Militarizing Game Parks and Marketing Wildlife are Unsustainable Strategies
Andy Thayer
More Cops Will Worsen, Not Help, Chicago’s Violence Problem
Louis Yako
Can Westerners Help Refugees from War-torn Countries?
David Rosen
Rudy Giuliani & Trump’s Possible Cabinet
Joyce Nelson
TISA and the Privatization of Public Services
Pete Dolack
Global Warming Will Accelerate as Oceans Reach Limits of Remediation
Franklin Lamb
34 Years After the Sabra-Shatila Massacre
Cesar Chelala
How One Man Held off Nuclear War
Norman Pollack
Sovereign Immunity, War Crimes, and Compensation to 9/11 Families
Lamont Lilly
Standing Rock Stakes Claim for Sovereignty: Eyewitness Report From North Dakota
Barbara G. Ellis
A Sandernista Priority: Push Bernie’s Planks!
Hiroyuki Hamada
How Do We Dream the Dream of Peace Together?
Russell Mokhiber
From Rags and Robes to Speedos and Thongs: Why Trump is Crushing Clinton in WV
Julian Vigo
Living La Vida Loca
Aidan O'Brien
Where is Europe’s Duterte? 
Abel Cohen
Russia’s Improbable Role in Everything
Ron Jacobs
A Change Has Gotta’ Come
Uri Avnery
Shimon Peres and the Saga of Sisyphus
Graham Peebles
Ethiopian’s Crying out for Freedom and Justice
Robert Koehler
Stop the Killing
FacebookTwitterGoogle+RedditEmail