Andrew Gavin Marshall

Home » Economy » Banking on Criminality: Drug Money and the Above-the-Law Global Banking Cartel

Banking on Criminality: Drug Money and the Above-the-Law Global Banking Cartel

Banking on Criminality: Drug Money and the Above-the-Law Global Banking Cartel

By: Andrew Gavin Marshall

HSBC executives testify at U.S. Senate (photo courtesy of The Guardian, 17 June 2012)

HSBC executives testify at U.S. Senate (photo courtesy of The Guardian, 17 June 2012)


In what the New York Times declared as a “dark day for the rule of law” on December 11, 2012, HSBC, the world’s second largest bank, failed to be indicted for extensive criminal activities in laundering money to and from regimes under sanctions, Mexican drug cartels, and terrorist organizations (including al-Qaeda). While admitting culpability, and with guilt assured, state and federal authorities in the United States decided not to indict the bank “over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.” Instead, HSBC agreed to pay a $1.92 billion settlement.

The fear was that an indictment would be a “death sentence” for HSBC. The U.S. Justice Department, which was prosecuting the case, was told by the U.S. Treasury Department and the Federal Reserve that taking such an “aggressive stance” against HSBC could have negative effects upon the economy. Instead, the bank was to forfeit $1.2 billion and pay $700 million in fines on top of that for violating the Bank Secrecy Act and the Trading with the Enemy Act. In a statement, HSBC’s CEO stated, “We accept responsibility for our past mistakes… We are committed to protecting the integrity of the global financial system. To this end, we will continue to work closely with governments and regulators around the world.” With more than $7 billion in Mexican drug cartel money laundered through HSBC alone, the fine amounts to a slap on the wrist, no more than a cost-benefit analysis of doing business: if the ‘cost’ of laundering billions in drug money is less than the ‘benefit,’ the policy will continue.

As part of the settlement, not one banker at HSBC was to be charged in the case. The New York Times acknowledged that, “the government has bought into the notion that too big to fail is too big to jail.” HSBC joins a list of some of the world’s other largest banks in paying fines for criminal activities, including Credit Suisse, Lloyds, ABN Amro and ING, among others. The U.S. Assistant Attorney General Lanny A. Breuer referred to the settlement as an example of HSBC “being held accountable for stunning failures of oversight.” Lanny Breuer, who heads the Justice Department’s criminal division, which was responsible for prosecuting the case against HSBC, was previously a partner at a law firm (along with the U.S. Attorney General Eric Holder) where they represented a number of major banks and other conglomerates in cases dealing with foreclosure fraud. While Breuer and Holder were partners at Covington & Burling, the firm represented notable clients such as Bank of America, Citigroup, JP Morgan Chase and Wells Fargo, among others. It seems that at the Justice Department, they continue to have the same job: protecting the major banks from being persecuted for criminal behaviour.

With a great deal of focus on the $1.9 billion in fines being paid out by HSBC, little mention was made of the fact that HSBC had roughly $2.5 trillion in assets, and earned  $22 billion in profits in 2011. But not to worry, HSBC’s  executive said that they “accept responsibility for our past mistakes,” and added: “We have said we are profoundly sorry for them, and we do so again.” So not only did the executives of the world’s second largest bank apologize for laundering billions in drug money (along with other crimes), but they apologized… again. Thus, they pay a comparably small fine and face no criminal charges. I wonder if a crack dealer from a ghetto in the United States could avoid criminal prosecution if he were to apologize not once, but twice. Actually, we don’t have to wonder. In May of 2012, as HSBC executives were testifying before the U.S. Senate in Washington D.C., admitting their role in drug money laundering, a poor black man was convicted of peddling 5.5 grams of crack cocaine just across the river from the U.S. Capitol building, and he was given 10 years in prison.

Back in August the bank stated that they had put aside $700 million to pay fines for illegal activities, which conveniently was the exact amount they were fined by the U.S. Justice Department (not including the forfeiture of profits). Lanny Breuer declared the settlement to be “a very just, very real and very powerful result.” Indeed, one could agree that the results are “powerful” and “very real,” in that they provide a legal state-sanctioned decision that big banks will not be persecuted for their vast criminal activities, precisely because they are big banks. The “very real” result of this is that we can guarantee that such criminal behaviour will continue, since the banks will continue to be protected by the state. With news of the settlement, HSBC’s market share price rose by 2.8%, a clear sign that “financial markets” also reward criminal behaviour and the “pervasively polluted” culture at HSBC (in the words of the U.S. Senate report).

Jack Blum, a Washington attorney and former special counsel for the Senate Foreign Relations Committee who specializes in money laundering and financial crimes stated that, “If these people aren’t prosecuted, who will be?” He further asked: “What do you have to do to be prosecuted? They have crossed every bright line in bank compliance. When is there an offense that’s bad enough for a big bank to be prosecuted?” But the Justice Department’s Lanny Breuer explained that his department had to consider “the collateral consequences” of prosecutions: “If you prosecute one of the largest banks in the world, do you risk that people will lose their jobs, other financial institutions and other parties will leave the bank, and there will be some kind of event in the world economy?”

In other words, the U.S. Justice Department decided that big banks are above the law, because if they weren’t, there would be severe consequences for the financial system. And this is not just good news for HSBC, the “favourite” bank of Mexican drug cartels (according to Bloomberg), but it’s good news for all banks. After all, HSBC is not the only bank engaged in laundering drug money and other illegal activities. Back in 2010, Wachovia (now part of Wells Fargo) paid roughly $160 million in fines for laundering some $378.4 billion in drug money. Drug money has also been found to be laundered through other major financial institutions, including Bank of America, Banco Santander, Citigroup, and the banking branch of American Express. Nearly all of the world’s largest banks have been or are currently being investigated for other crimes, including rigging interest rates (in what’s known as the Libor scandal), and other forms of fraud. Among the banks being investigated for criminal activity by U.S. prosecutors are Barclays, Deutsche Bank, Citigroup, JP Morgan Chase, Royal Bank of Scotland, UBS, Bank of America, Bank of Tokyo Mitsubishi, Credit Suisse, Lloyds, Rabobank, Royal Bank of Canada, and Société Générale, among others. Regulators and investigators of the Libor scandal – “the biggest financial scandal ever” – report that the world’s largest banks engage in “organized fraud” and function like a “cartel” or “mafia.”

The pervasive criminality of this “international cartel” is so consistent that one commentator with the Guardian has referred to global banks as “the financial services wing of the drug cartels.” But indeed, where could be a better place for drug cartels to deposit their profits than with a financial cartel? And why would banks give up their pivotal role in the global drug trade? While the pharmaceutical drug industry records annual revenues in the hundreds of billions of dollars (which is nothing to ignore), the global trade in illicit drugs, according to the United Nations Office on Drugs and Crime, amounted to roughly 2.3-5.5% of global GDP, around $2.1 trillion (U.S.) in 2009. That same year, the same United Nations office reported that billions of dollars in drug money saved the major global banks during the financial crisis, as “the only liquid investment capital” pouring into banks. Roughly $325 billion in drug money was absorbed by the financial system in 2009. It is in the interest of banks to continue profiting off of the global drug trade, and now they have been given a full green light by the Obama administration to continue.

Welcome to the world of financial criminality, the “international cartel” of drug money banks and their political protectors. These banks not only launder billions in drug money, finance terrorists and commit massive fraud, but they create massive financial and economic crises, and then our governments give them trillions of dollars in bailouts, again rewarding them for creating crises and committing criminal acts. On top of that, we, the people, are handed the bill for the bailouts and have to pay for them through reduced standards of living by being punished into poverty through ‘austerity measures’ and have our labour, resources, and societies exploited through ‘structural reform’ policies. These criminal banks dominate the global economy, and dictate policies to national political oligarchies. Their greed, power, and parasitic nature knows no bounds.

The fact that the Justice Department refused to prosecute HSBC because of the effects it could have on the financial system should be a clear sign that the financial system does not function for the benefit of people and society as a whole, and thus, that it needs to be dramatically changed, cartels need to be destroyed, banks broken up, criminal behaviour punished (not rewarded), and that people should dictate the policies of society, not a small network of international criminal cartel banks.

But then, that would be rational, so naturally it’s not even up for discussion.


For a more detailed analysis of the criminal activities of the “international cartel” of banks, which scientists have referred to as a “super-entity”, see: “The Global Banking ‘Super-Entity’ Drug Cartel: The “Free Market” of Finance Capital.”

If your money isn’t being laundered through a cartel, please consider making a donation to The People’s Book Project, so that I can continue analyzing and exposing the activities and institutions of this cartel.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on


  1. Laurence stoppelman says:

    Your article re HSBC is naive and irresponsible comparing the behaviour of the bank to that of petty criminals. The failure here was one of control in one of the world’s largest and most complex companies, not an intention to facilitate criminal activity . Think before you ink

    • Except that it is consistent, pervasive, and across the entire banking world, as it has been since the late 1970s, according to a little known agency called the United Nations. The only “naive and irresponsible” thing is to assume ignorance when it comes to an obvious policy, which has been in effect for decades. HSBC is just the latest example in a long list of consistency regarding financial institutions laundering drug money. And when one looks at the actual details, the statements from prosecutors and regulators, the notion of “failure to control” is naive and irresponsible. And banks are not “petty criminals,” they are the ultimate criminal enterprises, from which petty criminals could get a great deal of learning experience from. Facilitating criminal activity in the corporate and financial world is nothing new, it is common practice and common policy, dictated by ‘cost-benefit analysis.’ This goes for environmental crimes, money laundering, fraud, and other forms of manipulation. To look at the voluminous array and examples of blatant and consistent criminal behaviour of such institutions and conclude, irrationally and illogically, that they simply lack “control,” is the truly naive interpretation.

      • Michael Crighton says:

        Excellent work. In a world of globalized capital, doesn’t the unglobal public as credit licence providers, defacto owners and guarantors of these organisations have the right to a global audit thru tax havens to detail the incredible drug trade, its cash flows, major dealers and beneficiaries. Wouldn’t that be interesting. It could start in post Taliban Afghanistan.

  2. […] via Banking on Criminality: Drug Money and the Above-the-Law Global Banking Cartel « Andrew Gavin Marsh…. […]

  3. I don’t think there is any rhyme or reason to our economic system. I think it is all bullsh?t.

    I think that the Rich Folks use “economic theory” to explain or excuse what is really class warfare.

    Believing in the economic theory being practiced today is no different than believing in a God or a religion.

    Is there any difference between a preacher having a phd in religion or an economist having a phd in money management?

    Both are earned in blind faith.

    The “Economic System” itself is a “Myth” propagated by “Magicians” who afforded themselves the costs of a higher education and “Purchased” a PHD or an SH?T after their names. The same way that a Christian Preacher attends a religious institution and leaves with a “Certificate Of Christendom”.

    Economic “Myth” is “Preached” and “Enforced” by the military and police complex, and when required (and on command), by our religious leaders as well.

    Economists perform the same tasks and for the same reason for which magicians played their essential roles during olden times with Kings and Queens.

    It is all a “Confidence Myth”.

    The Economist has only one mission in life and that is to further propagate the myth with “Magical” charts and drawings and claiming them to be “Truth”. A successful economist must sell his magic in the same way a Jehovah Witness sells their beliefs.

    The 12 Federal Reserve members are no different than the myth of the 12 Apostles at the Last Supper.

    A total sham.

    I think that the Rich Folks sort of get up every morning and ask themselves how much money must be “shared” or allowed onto the street in order to ensure that the Rich Folks can walk the streets without being mugged.

    35% of all property taxes in the City of Toronto is used for policing. (More than 900 million dollars.)

    The Rich Folks not only want to earn money, but they also want to enjoy the wealth as well.

    They only agree to part with whatever it takes to allow Rich Folks to walk the streets without being harassed.


  4. Ronaldo Spearpoint says:

    As usual, it’s privatize the profits and socialize the losses and environmental damage. Meanwhile, the blindfold has been removed from Lady Justice to support the exploiters… credit unions anyone? RJM

  5. […] Source: Andrew Gavin Marshall, Guest Post […]

  6. […] bank was prosecuted as the money elite seem not to be subject to the same laws as everyone else. One reason given for this differential treatment is that government enforcement agencies are frightened to […]

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