The surprise in the Obama administration’s deal with London-based HSBC, the money-laundering enterprise moonlighting as the world’s third-largest bank, is that it came in the guise of a criminal prosecution. The bank has pleaded guilty to breaking some laws. Nobody who works or worked at the bank is guilty, though; just the corporate person, who will pay what amounts to a confiscatory tax on its (his? her?) illegal profits. Shareholders are if not happy then at least stoic; the stock today is off its high for the year by less than a point. The bank will continue to operate in the US under enhanced supervision — no, no waterboarding; different sort of “enhanced” — after agreeing not to launder billions of dollars for business enterprises with body counts approaching those of civilized governments.
The face of the Obama justice department on this prosecution is Assistant AG Lanny Breuer, who says “[i]t’s a fiction to suggest that this isn’t a very robust result.” Breuer is also the face of the justice department on all the prosecutions that have sent so many criminal bankers to the Big House in connection with stealing the US economy. It’s probably also a fiction to suggest that the lack of those isn’t a very robust result.
Breuer is a former white-collar criminal defense attorney. He stood up for Moody’s, one of the investment rating services that assured us everything was A-OK with all those rotten financial investments that brought the coliseum down in 2008, when the company was in trouble regarding the blind eye they turned toward Enron’s shenanigans until a few days before the firm imploded. He is an alumnus of Covington & Burling, the law firm at which Attorney General Eric Holder worked defending financial criminals before he went to work shielding them from prosecution as the people’s attorney.
Covington & Burling didn’t represent any torturers, or at least not in connection with torturing people, but Holder and Breuer decided not to prosecute any of them, either, when they arrived at the justice department. Their boss, President Obama, set the tone for their tenure when he preemptively invoked the Nuremberg defense on behalf of the torturers, saying he wanted to “assure those who carried out their duties relying in good faith upon legal advice from the Department of Justice that they will not be subject to prosecution.” Their duties! Germans who went to court after World War II with the defense that their bosses said what they were doing, their duty, was fine got hanged, some of them, and at least jailed. Same with the bosses, and the lawyers who did the leg work too.
But in the US in the 21st century, the perpetrators never even went to trial. The lesson going forward (Forward!) is that in this country you can probably get away with anything, no matter how transparently evil it is, if you can get a government lawyer sufficiently twisted to say it’s legal. The Obama administration have been doing just that with respect to at least their automated death from above policies and who knows what else. Hilariously, they were inspired to start codifying the rules about who can and can’t be killed at the President’s whim by the thought of conveying that authority unabridged to Mitt Romney; the idea being that there are some people you just can’t trust with unconditional power. Other people. Those People.
“Dear Eric: the bearer of this letter is a liar, a cheat, a thief and a plunderer.
Please extend him all courtesy.”
HSBC isn’t the only company held to criminal account by the Obama administration. The justice department recently leveled historic financial penalties against BP in connection with that company’s ruinous behavior in the Gulf of Mexico. The penalties were so severe, amounting to nearly six week’s worth of profits to be paid out across five years, that BP shareholders panicked and sent the stock tumbling to about a half-point higher after the penalties were announced. That’s about where the price still sits, even after the EPA cited “lack of business integrity” in barring the company from new US government contracts and from competing for drilling rights on US government land. They’re not worried, and they shouldn’t be: “lack of business integrity” is practically a letter of credit in Washington, and they can expect the bans to be lifted in due course.
War criminals go free; corporate felons destroy the economy and walk away a little lighter in the (shareholder’s) wallet, if at all — and most of them are now making fortunes on risky investments using money borrowed for almost nothing from the government; a company despoils the environment, poisons people and ruins livelihoods for decades forward and goes on about its business. If they’re big enough and bad enough, this administration will give them a pass.
Democrats would be disgusted and depressed, beset with hopelessness, if these things were happening during a Republican administration — war criminals at large! pirates and looters unpunished! — so we’re fortunate that a Democrat is in charge. The national mood is the better for it, since Republicans aren’t inclined to mope about the crimes of capital and Democrats can’t really afford to dwell on them too deeply for now.
This is true as well of the Democratic push to curtail social insurance programs. Democrats would be horrified to have an increase in the Medicare eligibility age, and an annually compounding decrease in Social Security benefits, imposed upon them by Republicans. The lash would burn, it would be insufferable. So we’re fortunate to have Democrats leading the way on this*, although the national mood hasn’t really benefited in the same way as with the wholesale excuse of criminal behavior because Republicans get as enraged when they win as when they lose, when they even recognize that they’ve won.
When Lanny Breuer and Eric Holder look at the people who run large corporations, they don’t see “them;” they see “us.” They see the people they’ve spent years and made fortunes defending; the people they dine with and holiday with; the people who wrote their pay checks before they went into government and who will write them again when they leave. If Lanny Breuer had been heading HSBC’s defense team, the settlement they got is one he would have wanted. Same with all the fines and promises to be good that he has extracted from the banks that brought us down.
There are not two opposing sides here: there is one side trying to determine how to handle some misbehavior in the ranks without putting any of their livelihoods at risk.
*Indirect word from the White House is that raising the Medicare eligibility age is “off the table.” I will believe that if it hasn’t happened in four years.