How come a UK government minister ran a bank that is said to have ignored money laundering rules?

Posted on

I've just published a blog written by Robert Palmer of Global Witness referring to a Reuters report on systemic, and Reuters alleges, deliberate failure of money laundering regulation at HSBC. The implication is clear. Reuters say:

In some of the documents [obtained from US prosecutor's offices], prosecutors allege that HSBC intentionally flouted the law. The bank created an operation that was a "systemically flawed sham paper-product designed solely to make it appear that the Bank has complied" with the Bank Secrecy Act and is able to detect money laundering, wrote William J. Ihlenfeld II, U.S. Attorney for the Northern District of West Virginia, in a draft of a 2010 letter addressed to Justice Department officials.

Now, let's look at the official government CV of the Rev Lord Stephen Green. It says:

Lord Green was appointed Minister of State for Trade and Investment on 11 January 2011.

Lord Green began his career with the British Government’s Ministry of Overseas Development. In 1977, he joined McKinsey & Co Inc, management consultants, with whom he undertook assignments in Europe, North America and the Middle East.

He joined The Hongkong and Shanghai Banking Corporation Limited in 1982 with responsibility for corporate planning activities, and, in 1985, was put in charge of the development of the bank’s global treasury operations. In 1992, he became Group Treasurer of HSBC Holdings plc, with responsibility for the HSBC Group’s treasury and capital markets businesses globally.

In March 1998, he was appointed to the Board of HSBC Holdings plc as Executive Director, Investment Banking and Markets responsible for the investment banking, private banking and asset management activities of the Group. He assumed additional responsibility for the Group’s corporate banking business in May 2002. He became Group Chief Executive on 1 June 2003 and Group Chairman on 26 May 2006. He was a director of HSBC Bank plc, The Hongkong and Shanghai Banking Corporation Limited and of HSBC North America Holdings Inc.

So we have a UK government trade minister who was responsible for investment banking, private banking, asset management activities and the corporate banking business of HSBC during the period the prosecutors are looking at. He was also chair of its Swiss private bank, I would add.  Those prosecutors are saying this bank ran a sham compliance regime according to Reuters.

And Stephen Green's still in office?

How, I would ask, can that be?

OK, he's not guilty until proven so - and he may have a defence. But that's not the standard that applies in public life - and if it happened on his watch in the bank candidly he's responsible for it even if he did not know - that's why companies have directors who have the duty to stop such things happening.  Fail and it's your fault.  That's why they're supposedly paid so much.

So what's happening here?

And why is it that it only seems like the Independent has covered this story in the UK? Isn't that weird?