This article first appeared at the McAlvany Intelligence Advisor on Wednesday, March 18, 2015: 

The one question Loretta Lynch, Obama’s nominee to replace as Attorney General, fears the most, is about to be asked: “Why did you cut such a sweet deal for HSBC in light of the decades-long history of money-laundering amounting to millions of dollars of assistance to America’s enemies?”

With the announcement on Friday that French authorities are joining with the Swiss government to investigate HSBC’s Swiss branch for setting up tax-dodge schemes comes the awakening of an issue Lynch certainly hoped would never come back. After years of investigation by the Department of Justice into HSBC, followed by a 334-page Senate committee report detailing outrage after outrage, the department, with Lynch’s assistance, decided that the bank was too big, too powerful, too influential, too important to the international banking cartel, to allow it to suffer the full extent of the punishment it deserved. As Assistant Attorney General Lanny Breuer explained at the time the Lynch deal with HSBC was announced:

Had the U.S. authorities decided to press criminal charges, HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat, and the entire banking system would have been destabilized.

So, despite decades of malfeasance, laundering money for Middle East terrorist groups and Mexican drug cartels, HSBC got off with a hand-slap. This outraged Matt Taibbi who wrote in the Rolling Stone:

The U.S. Justice Department granted a total walk to executives of … HSBC for the largest drug-and-terrorism money-laundering case ever.


Yes, they issued a fine – $1.9 billion, or about five weeks’ profit – but they didn’t extract so much as one dollar or one day in jail from any individual, despite a decade of stupefying abuses.

Taibbi added:

For at least half a decade, the storied British colonial banking helped wash hundreds of millions of dollars for drug mobs, including Mexico’s Sinaloa drug cartel, suspected in tens of thousands of murders just in the last 10 years – people so totally evil, jokes former New York Attorney General Eliot Spitzer, that “they make the guys on Wall Street look good.”


The bank also moved money for organizations linked to Al Qaeda and Hezbollah, and for Russian gangsters, helped countries like Iran, the Sudan, and North Korea evade sanctions, and, in between helping murderers and terrorists and rogue states, aided countless common tax cheats in hiding their cash.

Jack Blum, a Washington lawyer who served for fourteen years with the Senate Antitrust Subcommittee, was even more scathing in his reaction to Lynch’s agreement:

[HSBC] violated every … in the book. They took every imaginable form of illegal and illicit business.

HSBC, according to whistleblower John Cruz who worked for the bank in a high management position and was fired for continuing to question the bank’s fraudulent practices, used the following strategy to wash millions:

The scheme used the names and Social Security numbers of hundreds of unsuspecting current and former customers. It allegedly had the active participation of regional bank managers, branch managers and employees, as well as bank compliance officials at hundreds of HSBC locations throughout the nation. The money was ultimately wired by the bank to undisclosed bank accounts internationally.

This was much more profitable than just offering the usual bank services like mortgage and credit cards. As Cruz told World Net Daily:

This is how the bank and employees in the bank make money. It’s a lot easier to make money off fraudulent transactions than it is to make money off legal transactions.

That’s because margins often reach 20 percent of the amounts washed, compared to fractions of a percent for traditional, and legal, banking transactions.

When troublesome questions arose during her confirmation hearings, Lynch waffled or obfuscated. When asked who she believed had a greater right to work, illegal immigrants or lawful immigrants and citizens, Lynch responded:

Senator, I believe the right and the obligation to work is one that’s shared by everyone in this country, regardless of how they came here.

That answer was clarity itself compared to this response when Senator Jeff Sessions (R-Ala.) asked her:

Would you [as Attorney General] take action against an employer who says, “No, I prefer to hire someone who came to the country lawfully rather than someone given executive amnesty by the president?”


Lynch: With respect to the – the provision about temporary deferral, I did not read it as providing a legal amnesty, that is, that permanent status here, but a temporary deferral.


With respect to whether or not those individuals would be able to seek redress for employment discrimination, if – if that is the purpose of your question – again, I haven’t studied that legal issue….

Some issues from her past were ignored altogether, including her decision not to criticize or punish District Attorney Mike Nifong in the Duke University black stripper/rape case against some white students. When it was learned that her testimony was false but was aided by “serious procedural violations” by Nifong, Lynch refused to condemn him, stating instead that there was latent racism in the community despite the false evidence produced in the case.

Lynch thinks the death penalty is racist, that voter ID laws are racist, that society in general is racist. But this ideology apparently didn’t matter during her confirmation hearings. Instead attention was focused on Fast and Furious, Lois Lerner’s emails, Obama’s executive order overreach, his amnesty, his rewriting Obamacare, all of which has led the Senate to today’s impasse: 50 senators have said they plan to vote for her confirmation, including four Republicans: Orrin Hatch (R-Utah), Jeff Flake (R-Ariz.), Lindsey Graham (R-S.C.) and Susan Collins, (R-Maine). Just two need to change their vote and the Lynch nomination is history.

How Lynch sidesteps the question she hopes no one will ask will likely determine her fate. It’s also in the hands of four wimpy Republicans, just two of whom need to grow a backbone and vote no.



World News Daily: Tide turns against Obama’s Loretta Lynch

World News Daily: New headache for Loretta Lynch’s nomination

World News Daily: Lynch confirmation hanging by thread

Loretta Lynch’s background

Daily Signal: Is Loretta Lynch Another Eric Holder? Here’s What We Know About Her Troubling Past

Bio on Loretta Lynch

The New : Questions Senators Won’t Be Asking Loretta Lynch, Obama’s Attorney General Nominee

Matt Tiabbi’s article in The Rolling Stone: Gangster Bankers: Too Big to Jail

Bio on Jack Blum

Bio on Lanny Breuer

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