Senators: 'Prosecution-Free Zone' for Big Banks?

Cohen did not provide an answer. He said only that Justice officials sought guidance from the Treasury Department about the broader economic impact a prosecution of HSBC could have, but that his office declined to provide an answer.

"We informed the Justice Department that … we were not in a position to offer any meaningful guidance to department in that matter," he said.

The response seemed only to further perturb Warren, who was elected to the Senate last fall on a promise to crack down on Wall Street, and who found in Thursday's hearing an opportunity to show she is pursuing that mandate.

"So you just said to the Justice Department, 'You're on your own in figuring this out,'" she said, not waiting for a reply.

Sen. Heidi Heidkamp, a North Dakota Democrat, asked the three witnesses to give the Senate their word that they would to push harder for a prosecution in the future.

"If we leave here without a commitment from all of you that you will vigorously encourage, and suggest, and recommend, that the Justice Department prosecute cases that must be prosecuted in order to insure equal justice under the law in this country, then we failed," she said.

None of the men offered that pledge.

As the dressing down continued, members of the committee said they wanted to see Justice Department officials brought before them to offer their explanation for why the HSBC case ended with a settlement. Whether that will occur remains to be seen. Advocates who have pushed for the U.S. to take a tougher posture against banks that launder money said they hope the committee continues to push.

"What is clear is that the system isn't working," said Stefanie Ostfeld, a policy advisor with Global Witness, an international advocacy organization that works to root out financial crimes and corruption. "There is no incentive for bankers to comply with the law when there are no personal consequences for getting it wrong. Until senior bankers are held legally responsible for the bank's compliance, the U.S. financial system will remain vulnerable to terrorist finance and the proceeds of corruption and drug trafficking."

Only one Republican from the banking committee attended today's hearing. Sen. Mark Kirk of Illinois stopped short of grilling the regulators, but joked with Warren that the two should consider opening their own bank for terrorists and drug lords.

"I think we can make a killing that way, and face no danger of prosecution," he said, smiling.

CLICK HERE to return to The Blotter homepage.

Page
  • 1
  • |
  • 2
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...