Is "Too Big To Jail" A Sacred Concept In America... Even With A Democrat In The White House?

The story of Henry Frick, one of the worst monsters of American capitalism, should have ended the idea of "too big to jail" in 1889. But he got off scott free and... it didn't-- nor have any of the other outrages against society done so. This week, after the latest HSBC fiasco, George Miller (D-CA) and a group of other progressives are giving it a try again. They blasted the Justice Department’s decision to “defer prosecution” of bank officials as symptomatic of an unacceptable lack of accountability for large financial institutions.

“We believe that the Department of Justice owes a greater duty of diligence to the American people in prosecuting the responsible HSBC officials to the fullest extent of the law for their criminal activities,” Miller and his colleagues wrote in a letter today to Attorney General Eric Holder expressing their strong disagreement with the decision that indictments will not be brought against the HSBC officers and employees responsible for abetting laundering actions.  The Justice Department based its decision to not pursue criminal charges on what it called the “collateral consequences” a prosecution could have on the financial system.

After sending the letter, Miller said the American people have been let down by the Department’s position in this case.  “It’s unconscionable that bank employees will not be held responsible for laundering upwards of a billion dollars in drug money and funds for dangerous foreign regimes that are known to support terrorist organizations,” he said.  “HSBC employees’ actions have helped to facilitate violence on the streets of our communities and the efforts of America’s enemies to attack American troops on the front lines.”

Recent reports have noted that Colombian drug traffickers who utilized HSBC’s lax regulations on money laundering have in fact been charged in U.S. courts and face over a decade in prison. However, no HSBC staff that facilitated those same traffickers’ work will face jail time.

“There has been a chronic lack of accountability for financial institutions for a number of years. Not only has this played a major role in the reckless behavior which collapsed our economy, but it now manifests itself in blatantly criminal activity,” Miller added. “The Justice Department’s decision to ‘defer prosecution’ is irresponsible. It broadcasts a clear message to financial institutions: if you’re big enough, you’re held to a separate set of standards with respect to our nation’s laws. No bank, no matter how large or important to our financial system, should be too big to jail.”

The lawmakers’ letter notes that, “Violations of anti-money laundering statutes in support of drug traffickers and America’s enemies are beyond the pale and must consistently be prosecuted to the fullest extent of the law, and even banks that are very large and systemically important cannot be too big to jail.”

Full text of the letter to U.S. Attorney General Holder is below and attached:

January 14, 2013

Hon. Eric Holder
Attorney General
Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530

Dear Attorney General Holder:

We are writing you in support of the concerns expressed in the attached letter sent to you on December 13th by Senator Jeff Merkley regarding the deferred prosecution agreement with HSBC. We are committed to achieving needed accountability in the financial sector, particularly for large financial institutions that played a significant role in bringing about the 2008 financial crisis that has caused great pain and suffering over the last several years.

As you know, the case against HSBC details a number of serious offenses involving clear and blatant violations of anti-money laundering statutes, which facilitated the activities of drug traffickers, banks doing business in sanctioned countries such as Iran, and others. It is inconceivable to us that indictments would not be brought against those HSBC officers and employees that were responsible for these laundering violations. Money laundering was carried out on behalf of the Mexican drug cartels that are responsible for significant crime, violence and death in the communities that we represent.

Money laundering was also conducted on behalf of governments that are supporting terrorist organizations that are attacking and killing American troops and citizens around the world. All of us have had the heartbreaking experience of attending the funerals of our fallen heroes. It is unacceptable to us that indictments have not been pursued against those who have engaged in offenses that have supported the criminal drug activities on our streets and terrorist activities against our country, our military and our citizens.

We believe that the Department of Justice owes a greater duty of diligence to the American people in prosecuting the responsible HSBC officials to the fullest extent of the law for their criminal activities. We are particularly shocked by recent reports that Colombian drug traffickers who utilized HSBC’s lax regulations on money laundering have in fact been charged in U.S. courts and face over a decade in prison, yet the HSBC employees who made such laundering possible have not faced criminal prosecution. Violations of anti-money laundering statutes in support of drug traffickers and America’s enemies are beyond the pale and must consistently be prosecuted to the fullest extent of the law, and even banks that are very large and systemically important cannot be too big to jail.

We join Sen. Merkley in urging your immediate attention to this issue and look forward to your response to his inquiry. Thank you in advance for your consideration of our concerns.