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WARREN: 'How Many Billions Have To Be Laundered For Drug Lords Before We Consider Shutting Down A Bank?'

Elizabeth Warren is still waiting for an answer.

During Senate testimony Liz Warren asks how much drug-laundered money it takes before banking regulators consider shutting down a bank.  Hilarity ensues. And no one ever answers the question.

Witnesses were:

  1. David Cohen, Sec. for Terrorism and Financial Intelligence, U.S. Treasury
  2. Thomas Curry, Comptroller, Office of the Comptroller of the Currency
  3. Jerome H. Powell, Governor, Federal Reserve System




WARREN: As Senator Reed just pointed out, the United States government takes money laundering very seriously for a very good reason.

Now in December, HSBC admitted to money laundering. To laundering $881 million that we know of for Mexican and Colombian drug cartels. And also admitted to violating our sanctions for Iran, Libya, Cuba, Burma, the Sudan. And they didn't do it just one time. It wasn't like a mistake. They did it over and over and over again across a period of years. And they were caught doing it. Warned not to do it. And kept right on doing it. And evidently making profits doing it.

Now HSBC paid a fine, but no one individual went to trial. No individual was banned from banking. And there was no hearing to consider shutting down HSBC's activities here in the United States. So what I'd like is, you're the experts on money laundering. I'd like your opinion. What does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this? Mr. Cohen, can we start with you?

COHEN: Certainly Senator. No question the activity that was the subject of the enforcement action against HSBC was egregious.

WARREN: But let me just move you along here on the point Mr. Cohen. My question is, given that this is what you did, what does it take to get you to move towards even a hearing? Even considering shutting down banking operations for money laundering?

COHEN: Senator, we at the Treasury Department under OFAC and (ph) authority, we don't have the authority to shut down a financial institution.

WARREN: I understand that. I'm asking, in your opinion, you are the ones who are supposed to be the experts on money laundering. You work with everyone else, including the Department of Justice. In your opinion, how many billions of dollars do you have to launder for drug lords, before somebody says, we're shutting you down?

WARREN: And I'm asking, what does it take, even to say, here's where the line is. We're going to draw a line here, and if you cross that line, you're at risk for having your bank closed?

COHEN: But I'm not going to get into some hypothetical line drawing exercise.

WARREN: Well it's somewhere beyond $881 million of drug money.

COHEN: Well Senator the actions, and I'm sure the regulators can address this issue. The actions that we took in the HSBC case, we thought were appropriate in that instance.

WARREN: So what you're saying to me is you are responsible for these banks, and again, I read your testimony and you talk about the importance of vigorous enforcement here. But you're telling me you have no view when it's appropriate to consider even a hearing to raise the question of whether or not these banks should have to close their operations when they engage in money laundering for drug cartels?

WARREN: I understand that I'm over my time.  And I'll just say here, if you're caught with an ounce of cocaine, the chances are good you're going to go to jail.  If it happens repeatedly you may go to jail for the rest of your life.  But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night.  Every single individual associated with this.  I just, I think that's fundamentally wrong.

"How would you explain this to your neighbor?" Sen. Jeff Merkley (D-Ore.) asked, noting that the fine slapped on HSBC amounted to about one percent of its profits over 10 years. "Does that really send a message?"


UpdateHSBC Faces NEW Charges Of Money Laundering



Photo by William Banzai7...


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Reader Comments (21)

As long as banks give campaign contributions to both parties, closing one down or prosecuting for any host of crimes will never happen. Meanwhile the great finger pointing distraction continues unimpeded by the ignorant masses.
Mar 8, 2013 at 5:04 AM | Unregistered CommenterS. Gompers
Warren's time was limited, but when these punks started whinging about how their authority doesn't extend to criminal blah blah blah...the appropriate response could have included a LONG list of ways that Treasury, DOJ, FRBNY, OCC, et al. have colluded to AVOID holding people accountable -- for anything -- from 2008 to the present.

For instance, Tim Geithner is known to have contacted Andrew Cuomo (and others) telling them to avoid prosecuting people at various Wall St. institutions. Fascinating, isn't it, that Fed and Treasury officials have NO opinion whatsoever on criminal prosecution, unless it's to call up their BFF's in other agencies telling them NOT to prosecute certain individuals because a bailout is underway. Warren could have totally called BS on that score.
Mar 8, 2013 at 10:17 AM | Unregistered CommenterDr. Pitchfork
Good point, Dr. P. I had forgotten about Geithner's secret meetings with Cuomo in 2008 asking him NOT to prosecute for the good of the country.
Mar 8, 2013 at 12:53 PM | Unregistered CommenterDailyBail
If you count those discouraged workers and involuntary part-timers as unemployed, the unemployment rate jumps to 14.3%. The government reports this number as the U-6 rate.


Mar 8, 2013 at 12:54 PM | Unregistered CommenterDailyBail
Grades on examination style:

Cutting off non-responsive witness: A-
Follow-up demands for answers: B+
Posing tight yes/no questions: C-
Use of leading questions: D
Having counter-factuals on tongue tip: Incomplete

Sorry, that's not gonna cut it. She looks like a star among the brazen idiots and criminals on her committee. But as far as tearing new assholes or raising real hell, I don't see that happening. Her vote on Lew was the tell.
Mar 8, 2013 at 1:38 PM | Registered CommenterCheyenne
I concur, Cheyenne. Good performance, but only if grading on the curve (which has been bent all to hell by her colleagues).

I didn't think it was possible to find a Treasury Sec. more odious than Geithner, but I think they done done it with Lew.
Mar 8, 2013 at 1:56 PM | Unregistered CommenterDr. Pitchfork
Nothing is going to change. We're going on 5 years, and the pattern keeps repeating itself. Entertainment, occasional displays of bravado in congressional hearings...this is our sustenance. There's really nothing else to highlight. Until we have a different person in the White House and a different team at DOJ, there will be nothing of consequence that happens.
Mar 8, 2013 at 2:06 PM | Registered CommenterDailyBail
I'd love to see Brooksley Born come out of retirement. She warned us about all this crap. I just got my mitts on this MERS smackdown. It's an amicus by the City of Providence...pretty damning.


"The City of Providence is an interested party because MERS's intentional misrepresentation as a mortgagee and the Superior Court's erroneous decision to allow the perpetuation of this misrepresentation is harming the City."

"Allowing MERS to confer upon itself the status of mortgagee undermines the accuracy of the land evidence records, which in turn both delays foreclosure proceedings and impedes the City's ability to safeguard the basic health, safety, and welfare of it's citizens with proactive enforcement of health, safety, and welfare of it's citizens with proactive enforcement of health and safety codes. Accordingly, the City of Providence moves to submit the attached brief as an interested party and friend of the Court to underscore why MERS is not and cannot be a mortgagee and to highlight the extent and danger of the term's misuse."
Mar 8, 2013 at 2:18 PM | Unregistered Commenterchunga
Until we have a different person in the White House and a different team at DOJ, there will be nothing of consequence that happens.

I don't think anything significant will change until the people at large become a credible threat to TPTB. As WSP2 said, "We got to put the fear in these people!" When Daniel O'Connell was working for Catholic Emancipation (i.e. voting rights) in 19th-century Ireland, it wasn't his speeches that got things done. It was having 500,000 to 800,000 angry Irishmen show up to hear his speeches (the credible threat) that got things done.

I don't know how we do that here. Has it really been 5 years? Amazing. No one significant in jail. And no one torn to pieces by an angry mob. At some level we have to blame what Joyce referred to a hundred years ago as "the gratefully oppressed," who stand stupidly on the sidelines and cheer the exploits of their overlords.
Mar 8, 2013 at 2:54 PM | Unregistered CommenterDr. Pitchfork
I don't think anything significant will change until the people at large become a credible threat to TPTB.


Try as we might, it will never happen on its own. It's going to take a raging populist to wake up the people. A cross between Ron Paul, Ross Perot and Italy's Beppe Grillo would do the trick.
Mar 8, 2013 at 3:01 PM | Registered CommenterDailyBail
My vote is for Ted.
Mar 8, 2013 at 3:41 PM | Unregistered Commenterjohn
I don't know if he's a "raging populist," or more of an insider, but Larry Wilkerson, Colin Powell's former right-hand man, has some of the necessary ingredients:

military background
southern accent
a predilection for talking about "the republic"

Plus, he doesn't seem to be scared of anyone, including Dick Cheney and the neo-con noise machine -- that, alone, puts him in a different league.

But, yeah, I think you're right, DB. It may take a charismatic leader (God help us) to get meat in the streets.
Mar 8, 2013 at 4:18 PM | Unregistered CommenterDr. Pitchfork
I'm telling you this is the guy!

Mar 8, 2013 at 4:45 PM | Unregistered Commenterjohn
"It's going to take a raging populist to wake up the people."

The rot of corruption pervades every official body from the federal government in Washington, D.C. to the police force in LA. Viscerally, people are aware that the game is rigged against them and in favor of crooks and criminals who spit in the public's face while picking its pocket. It's the scum who need to wake up, not the people.

The support that Christopher Dorner had among millions of people was one wake-up call that went ignored. The massive wave of firearm purchases following Sandy Hook was another. In response, the criminals murdered Dorner and continue trying to lawyer away the Bill of Rights.

Having rigged town hall, the criminal class will meet up with populist rage at another venue, like a dark alley, and it won't be pretty.
Mar 8, 2013 at 4:59 PM | Unregistered CommenterCheyenne
Mar 12, 2013 at 7:00 AM | Unregistered CommenterSKINFLINT
Glenn Greenwald agrees with WSP2 ("We got to put the fear in these people!") -- @28:20:


I'm paraphrasing, but he makes EXACTLY the same point.
Mar 14, 2013 at 12:11 PM | Unregistered CommenterDr. Pitchfork
John, Ted is DEFINITELY the guy.
Mar 14, 2013 at 2:12 PM | Unregistered CommenterSKINFLINT

Perfect. Thanks for the timing on the Greenwald clip.
Mar 14, 2013 at 2:57 PM | Registered CommenterDailyBail
(Reuters) - Argentina's tax agency said on Monday it has uncovered 392 million pesos ($77 million) in fraudulent transactions by HSBC Holdings Plc and said it has asked the judicial system to probe the European bank for alleged tax evasion and money laundering.

Mar 21, 2013 at 2:43 AM | Registered CommenterDailyBail
If they are too big to jail .......... HANG THEM.
Mar 21, 2013 at 4:13 PM | Unregistered CommenterPatrick
It is clear that, despite a decent amount of good will, she is utterly clueless about who runs the show, how the game really works and how badly the system needs the cash from drugs to keep it all going. Naivete at such an age and in such a position is a little embarrassing.
Mar 22, 2013 at 5:02 PM | Unregistered CommenterEamon

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