Letter: ‘Too Big to Jail’ hurts all

The decision by the Department of Justice to not pursue criminal charges against British banking giant HSBC for fostering money-laundering schemes on a massive scale continues an unfair pattern of “hands off” when it comes to Too Big To Fail banks (“Too big to jail? Execs avoid laundering charges” Sunday Advocate Dec. 12.) HSBC was allowed to pay a fine of $1.92 billion, which their enablers in the DOJ, Treasury Department and Congress trumpeted to show how “serious” they are about corruption. What a joke!

A billion-dollar fine is eye-catching, but in truth it amounts to only a few weeks’ earnings for a financial behemoth that measures its assets in the trillions. HSBC moved vast sums of cash for Mexican and Colombian drug cartels, and provided services for the likes of Iran, Sudan, Cuba and Libya. The management of HSBC defied a cease-and-desist order, yet they get off with a fine, albeit a rather large one, because it was determined that arrests in the HSBC money-laundering scandal would threaten the stability of the financial system. Once Too Big To Fail, now these financial giants are Too Big to Jail!

Meanwhile, community banks are under the gun from examiners to comply with the jots and tittles of the Bank Secrecy Act, lest their boards and officers face personal financial ruin from civil money penalties and criminal charges. The risks of wrongdoing in a community bank affecting the stability and safety of our nation is low, yet the consequences in personal terms is infinitely more severe.

A dangerous relationship exists between Washington and Wall Street. Rules are written to allow the Too Big to just get bigger, and now the top 10 banks control approximately half of all the deposits in the United States. Large banks routinely are involved in scandalous behavior, and then transgressions are lawyered down to manageable numbers that these megabanks consider to be just the cost of doing business. Lawmakers and regulators react to public outcry with even more laws and regulations which are strangling community banks as they struggle to build mutually beneficial relationships on Main Streets across America.

Too Big To Fail. Too Big To Jail. The problem is obvious, but the solution demands the political will to break up these greedy and corrupt giants that threaten to engulf our financial system.

Preston L. Kennedy

president and chief executive officer

Bank of Zachary

Comments

1) Comment by tradewinns - 27/12/2012

SUPPOSEDLY, everyone is equal in our "justice system". we all know that is bunk. when a corporation does something illegal, someone in that corporation signed off on it, an individual not the corporation. that individual, in our system, should go to trial and if found guilty (another failure of our "justice system") go to prison for the same length of time you or i would spend. there is so, so much wrong with our justice system, we need to start over and this time make the only goal being the finding of the truth. our "adversarial" option is a failure. wining has become the goal of either/both sides and the truth be darned! the entire system is now motivated by money, that's why everything takes sooooo long to do anything. we have inmates in jail for over a year awaiting trial! take away the money and see how fast justice is handled.

2) Comment by phil - 27/12/2012

I agree with this letter and think this also needs to be looked into on a local level with banks AND OTHER methods used for money- laundering schemes on a massive scale. Didn't I recently see something in the news about how property transactions are recorded???

3) Comment by Whatnow - 27/12/2012

What's wrong Spud is the DOJ and Washington politics. Ever wonder why politicians become millionaires? They get pay offs to lay off corporate crime, although, no one hardly investigates and when they do, they don't do anything to the politicians. Just a slap on the wrist and then it's back to business as usual. They protect their own. Man, that's an awesome argument for term limits. Just look at all the people involved in Benghazi. No one was held accountable and no one lost their job. They just got shuffled around.

4) Comment by Spudaroonski - 27/12/2012

HSBC was also charged with doing business with terrorist in addition to laundering massive amounts of money for drug cartels. This so called "serious" fine levied against them is like me or you getting a parking ticket. They consider it as just the cost of doing business. The executives that run these large banks know full well that no one of any importance will do any jail time. They know they will not be held accountable for their crimes so you know what? They'll continue to break the law because there isn't any incentive for them to stop. If you or I get caught with a little weed the cops throw us in a cage. Launder drug money for drug cartels and terrorist and the cops just shrug their shoulders. What's wrong with this picture?

5) Comment by Bighug - 27/12/2012

Preston got it right. That's the way it works in the US. Sometimes these "too big to jail" people even get away with a company fine when their actions result in deaths. How many BP execs went to prison?