By Katalina M. Bianco, J.D.
Senator David Vitter (R-La.), member of the Senate Judiciary Committee, is pressing Loretta Lynch, nominee for Attorney General, for answers to questions he has about her involvement with HSBC and the megabank’s compliance with the terms of a Deferred Prosecution Agreement. He also is interested in hearing what Lynch has to say about allegations that British Prime Minister David Cameron has become involved in the HSBC case. Vitter said he is concerned with the message the handling of HSBC sends to Wall Street.
“In the course of her nomination process, Ms. Lynch has gone against her word on whether she would take action against these sorts of cases. And it has international implications—HSBC’s case is being traced all the way to Prime Minister Cameron,” Vitter said. “This empty threat sends a message to Wall Street and foreign governments alike that the Justice Department will turn a blind eye to non-compliance.”
HSBC was charged in 2012 with helping drug dealers launder money and with illegally completing transactions for clients in Iran, Libya, Syria, and other countries under U.S. economic sanctions. As the U.S. Attorney for the Eastern District of New York at the time, Lynch entered into the DPA with HSBC rather than pursuing criminal charges. Vitter previously asked Lynch for information on the case and has stated that he will vote against Lynch for AG, in part because he has not received answers to his questions.
In a letter to Lynch, Vitter wrote that two new issues have spurred further questions about Lynch’s dealings with HSBC. A report from an independent compliance monitor revealed that HSBC officers have been uncooperative in fulfilling the terms of the DPA. Vitter referred to The New York Times coverage of the report which indicates that HSBC has been found by the independent monitor to have “a basic lack of cooperativeness” toward internal auditors.
Vitter noted that in response to written questions for the record of the Senate Judiciary Committee about the DPA, Lynch said that should HSBC fail to comply and cooperate, Lynch would take remedial action against the bank. The lawmaker said that Lynch “clearly failed” to take remedial action, “which demonstrates a pattern of lax enforcement of mega banks and sends a message to Wall Street that the Justice Department will turn a blind eye to non-compliance and corporate recidivism.”
The second issue that has arisen concerns whistleblower allegations that British Prime Minister David Cameron urged President Obama against pursuing a criminal prosecution against HSBC for fear that it would result in HSBC losing its U.S. banking charter and would no longer be able to conduct business in the United States. “Interestingly, President Barack Obama and Prime Minister Cameron met at the White House on March 14, 2012 and the joint remarks available on the White House’s Press Office website make clear that banks were discussed,” Vitter wrote.
Vitter included in his letter a list of direct questions stemming from the issues surrounding HSBC, the compliance report, the allegations that Prime Minister Cameron intervened with President Obama on behalf of HSBC, and whether that intervention influenced Lynch’s decision to secure a DPA rather than prosecute. The lawmaker also asked Lynch point blank if she would investigate and, if appropriate, prosecute HSBC for tax evasion should she be confirmed as AG.
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