Dec 14 2012

Legal troubles? Go work for a big bank

Published by at 5:03 pm under Oregon,Reading

carlson
NW Reading

“Some will rob you with a six-gun, and some with a fountain pen,” sang Woody Guthrie – but you’re a lot less likely to serve time in the Crossbar Hotel if you use the latter.

That was the angry point of Oregon Senator Jeff Merkley’s letter today to Attorney General Eric Holder about the Department of Justice’s ongoing refusal to go after even the most brazen bad guys in the financial section. And leading to the sad but logical conclusion that “jail time is served by over 96% of persons that plead or are found guilty of drug trafficking, 80% of those that plead or are found guilty of money laundering, and 63% of those caught in possession of drugs. As the deferred prosecution agreement appears now to be the corporate equivalent of acknowledging guilt, the best way for a guilty party to avoid jail time may be to ensure that the party is or is employed by a globally significant bank.”

How that can be called justice is hard to imagine.

From his letter:

On Tuesday, the Justice Department entered into a deferred prosecution agreement with HSBC related to more than $800 million in illicit narcotics proceeds that drug traffickers laundered through the bank’s Mexican and American affiliates, as well as over $600 million in transactions that violated U.S. sanctions against Cuba, Iran, Libya, Sudan, and Burma. Assistant Attorney General Lanny Breuer highlighted just how brazen the violations were, with traffickers depositing “hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller window.” Sanctions violations were equally deliberate, with the bank intentionally stripping information from transactions to avoid detection. Yet despite these clear and blatant violations, the Department of Justice refused to bring criminal charges against the bank, relevant employees, or senior management.

Indeed, Mr. Breuer stated yesterday that in deciding not to prosecute, the Department considered the “collateral consequences” of its decision on the financial system. Mr. Breuer stated “If you prosecute one of the largest banks in the world, do you risk that people will lose jobs, other financial institutions and other parties will leave the bank, and there will be some kind of event in the world economy?” The HSBC decision comes on the back of deferred prosecution agreements with Standard Charter Bank and ING Group related to similar charges.

I do not take a position on the merits of this or any other individual case, but I am deeply concerned that four years after the financial crisis, the Department appears to have firmly set the precedent that no bank, bank employee, or bank executive can be prosecuted even for serious criminal actions if that bank is a large, systemically important financial institution. This “too big to jail” approach to law enforcement, which deeply offends the public’s sense of justice, effectively vitiates the law as written by Congress. Had Congress wished to declare that violations of money laundering, terrorist financing, fraud, and a number of other illicit financial actions would only constitute civil violations, it could have done so. It did not.

Instead, Congress placed these financial crimes squarely in the federal criminal code precisely because the consequences are so severe. Drug trafficking between the U.S. and Mexico continues to wreak extraordinary violence across North America, leading to 15,000 deaths in Mexico in 2010 alone and continued gang violence and deaths in the U.S. Drug cartels are also increasingly connected to terrorism. According to the Drug Enforcement Administration, 39 percent of State Department-designated foreign terrorist organizations (FTOs) have “confirmed links” to the drug trade, as of November 2011. The consequences to U.S. national security for violations involving terrorism financing and Iran sanctions violations are obvious and severe. Congress deemed criminal law the appropriate tool for punishing and deterring actions that have such serious and damaging public consequences.

Refusing to prosecute on the grounds of financial stability is also troubling from the perspective of ending “too big to fail.” The Dodd-Frank Wall Street Reform and Consumer Protection Act, which declared some institutions to be systemically important financial institutions subject to tougher regulation, did not declare that those institutions would be exempt from criminal prosecution. Indeed, the Dodd-Frank Act explicitly created new authority to permit a failed institution to be wound down safely, without impacting financial stability. If a financial institution, because of its criminal actions, ultimately fails, that may indeed be precisely the consequence that justice and accountability demand, and which is so necessary to deterring future illegal behavior. I am deeply concerned that the Department’s continuing application of deferred prosecution agreements on the grounds of financial stability runs contrary to the intent of Congress and undermines the accountability to the rule of law that is so fundamental to a healthy, functioning free market economy.

According to the U.S. Sentencing Commission, jail time is served by over 96 percent of persons that plead or are found guilty of drug trafficking, 80 percent of those that plead or are found guilty of money laundering, and 63 percent of those caught in possession of drugs. As the deferred prosecution agreement appears now to be the corporate equivalent of acknowledging guilt, the best way for a guilty party to avoid jail time may be to ensure that the party is or is employed by a globally significant bank. The Department’s deferred prosecution agreements may offer something in the way of promises of future compliance, but they look sorely lacking in justice and accountability.

I ask for your immediate response and explanation.

Share on Facebook

Comments Off

Comments are closed at this time.

Share on Facebook

 


Two bulls fire near Bend, and defensible space.

 

JOURNEY WEST

by Stephen Hartgen
The personal story of the well-known editor, publisher and state legislator's travel west from Maine to Idaho. A well-written account for anyone interested in Idaho, journalism or politics.
JOURNEY WEST: A memoir of journalism and politics, by Stephen Hartgen; Ridenbaugh Press, Carlton, Oregon. $15.95, here or at Amazon.com (softcover)

 

 

NEW EDITIONS is the story of the Northwest's 226 general-circulation newspapers and where your newspaper is headed.
New Editions: The Northwest's Newspapers as They Were, Are and Will Be. Steve Bagwell and Randy Stapilus; Ridenbaugh Press, Carlton, Oregon. 324 pages. Softcover. (e-book ahead). $16.95.
See the NEW EDITIONS page.

How many copies?

 
THE OREGON POLITICAL
FIELD GUIDE 2014

The Field Guide is the reference for the year on Oregon politics - the people, the districts, the votes, the issues. Compiled by a long-time Northwest political writer and a Salem Statesman-Journal political reporter.
OREGON POLITICAL FIELD GUIDE 2014, by Randy Stapilus and Hannah Hoffman; Ridenbaugh Press, Carlton, Oregon. $15.95, available right here or through Amazon.com (softcover)

 
 
THE IDAHO POLITICAL
FIELD GUIDE 2014

by Randy Stapilus and Marty Trillhaase is the reference for the year on Idaho Politics - the people, the districts, the votes, the issues. Written by two of Idaho's most veteran politcal observers.
IDAHO POLITICAL FIELD GUIDE 2014, by Randy Stapilus and Marty Trillhaase; Ridenbaugh Press, Carlton, Oregon. $15.95, available right here or through Amazon.com (softcover)

 
 
without compromise
WITHOUT COMPROMISE is the story of the Idaho State Police, from barely-functioning motor vehicles and hardly-there roads to computer and biotechnology. Kelly Kast has spent years researching the history and interviewing scores of current and former state police, and has emerged with a detailed and engrossing story of Idaho.
WITHOUT COMPROMISE page.

 

Diamondfield
How many copies?
The Old West saw few murder trials more spectacular or misunderstood than of "Diamondfield" Jack Davis. After years of brushes with the noose, Davis was pardoned - though many continued to believe him guilty. Max Black has spent years researching the Diamondfield saga and found startling new evidence never before uncovered - including the weapon and one of the bullets involved in the crime, and important documents - and now sets out the definitive story. Here too is Black's story - how he found key elements, presumed lost forever, of a fabulous Old West story.
See the DIAMONDFIELD page for more.
 

Medimont Reflections Chris Carlson's Medimont Reflections is a followup on his biography of former Idaho Governor Cecil Andrus. This one expands the view, bringing in Carlson's take on Idaho politics, the Northwest energy planning council, environmental issues and much more. The Idaho Statesman: "a pull-back-the-curtain account of his 40 years as a player in public life in Idaho." Available here: $15.95 plus shipping.
See the Medimont Reflections page  
 
Idaho 100 NOW IN KINDLE
 
Idaho 100, about the 100 most influential people ever in Idaho, by Randy Stapilus and Martin Peterson is now available. This is the book about to become the talk of the state - who really made Idaho the way it is? NOW AN E-BOOK AVAILABLE THROUGH KINDLE for just $2.99. Or, only $15.95 plus shipping.
 

Idaho 100 by Randy Stapilus and Martin Peterson. Order the Kindle at Amazon.com. For the print edition, order here or at Amazon.


 

    Top-Story-graphic-300x200_topstory8
    Monday mornings on KLIX-AM

    watergates

    ORDER IT HERE or on Amazon.com

    More about this book by Randy Stapilus

    Water rights and water wars: They’re not just a western movie any more. The Water Gates reviews water supplies, uses and rights to use water in all 50 states.242 pages, available from Ridenbaugh Press, $15.95

    intermediary

    ORDER IT HERE or on Amazon.com

    More about this book by Lin Tull Cannell

    At a time when Americans were only exploring what are now western states, William Craig tried to broker peace between native Nez Perces and newcomers from the East. 15 years in the making, this is one of the most dramatic stories of early Northwest history. 242 pages, available from Ridenbaugh Press, $15.95

    Upstream

    ORDER HERE or Amazon.com

    The Snake River Basin Adjudication is one of the largest water adjudications the United States has ever seen, and it may be the most successful. Here's how it happened, from the pages of the SRBA Digest, for 16 years the independent source.

    Paradox Politics

    ORDER HERE or Amazon.com

    After 21 years, a 2nd edition. If you're interested in Idaho politics and never read the original, now's the time. If you've read the original, here's view from now.


    Governing Idaho:
    Politics, People and Power

    by James Weatherby
    and Randy Stapilus
    Caxton Press
    order here

    Outlaw Tales
    of Idaho

    by Randy Stapilus
    Globe-Pequot Press
    order here

    It Happened in Idaho
    by Randy Stapilus
    Globe-Pequot Press
    order here

    Camping Idaho
    by Randy Stapilus
    Globe-Pequot Press
    order here