How Many Billions Of Drug-Laundered Money Does It Take To Shut Down A Bank?

Tyler Durden's picture

It's an odd question, we know - especially ahead of today's Stress Tests, but given today's testimony on assessing the bank secrecy act, apparent trouble-maker Elizabeth Warren pokes and prods (correctly we would add) at the surreality that exists between the Department of Justice, The Treasury, and the financial system. David Cohen, Tom Curry, and Jerome Powell dodged bullets and blame, "does that mean essentially we have a prosecution-free zone for large banks in America?" But Warren wasn't going to be fobbed off with useless banter as she pointed out, "if you're caught with an ounce of cocaine, the chances are good you're going to go to jail... for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night - I think that's fundamentally wrong." Indeed Ms. Warren.

 

Here is the transcript - note the Treasury officials never actually answer anything...

WARREN: ... As Senator Reed just pointed out, the United States government takes money laundering very seriously for a very good reason. ...

 

Now in December, HSBC admitted to money laundering. To laundering $881 million that we know of for Mexican and Colombian drug cartels. And also admitted to violating our sanctions for Iran, Libya, Cuba, Burma, the Sudan. And they didn't do it just one time. It wasn't like a mistake. They did it over and over and over again across a period of years. And they were caught doing it. Warned not to do it. And kept right on doing it. And evidently making profits doing it.

 

Now HSBC paid a fine, but no one individual went to trial. No individual was banned from banking. And there was no hearing to consider shutting down HSBC's activities here in the United States. So what I'd like is, you're the experts on money laundering. I'd like your opinion. What does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this? Mr. Cohen, can we start with you?

 

COHEN: Certainly Senator. No question the activity that was the subject of the enforcement action against HSBC was egregious...

 

WARREN: But let me just move you along here on the point Mr. Cohen. My question is, given that this is what you did, what does it take to get you to move towards even a hearing? Even considering shutting down banking operations for money laundering?

 

COHEN: Senator, we at the Treasury Department under OFAC and (ph) authority, we don't have the authority to shut down a financial institution...

 

WARREN: I understand that. I'm asking, in your opinion, you are the ones who are supposed to be the experts on money laundering. You work with everyone else, including the Department of Justice. In your opinion, how many billions of dollars do you have to launder for drug lords, before somebody says, we're shutting you down?

 

...

 

WARREN: ... And I'm asking, what does it take, even to say, here's where the line is. We're going to draw a line here, and if you cross that line, you're at risk for having your bank closed?

 

...

 

COHEN: But I'm not going to get into some hypothetical line drawing exercise.

 

WARREN: Well it's somewhere beyond $881 million of drug money.

 

COHEN: Well Senator the actions, and I'm sure the regulators can address this issue. The actions that we took in the HSBC case, we thought were appropriate in that instance.

 

...

 

WARREN: So what you're saying to me is you are responsible for these banks, and again, I read your testimony and you talk about the importance of vigorous enforcement here. But you're telling me you have no view when it's appropriate to consider even a hearing to raise the question of whether or not these banks should have to close their operations when they engage in money laundering for drug cartels?

 

...

 

WARREN: I understand that I'm over my time. And I'll just say here, if you're caught with an ounce of cocaine, the chances are good you're going to go to jail. If it happens repeatedly you may go to jail for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night. Every single individual associated with this. I just, I think that's fundamentally wrong.

(h/t Manal Mehta)

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
UncleFurker's picture

 

Stop her from boarding any airplanes?

 

 

monoloco's picture

Warren's a fraud, she says the right things sometimes, but she turns around and votes to confirm TBTF posterboy Jack Lew. She had a chance to buck the system and she froze at the switch.

earleflorida's picture

"What's..., Lew, got to do with it"

GMadScientist's picture

I feel compelled to give you an Ike-class beatdown for that.

lotsoffun's picture

nice try.  an attempt at funny, but not funny.

ChrisFromMorningside's picture

Buy Silver. Get out of debt. 

putaipan's picture

 

 

 

How Many Billions Of Drug-Laundered Money Does It Take To keep A Bank Open?  .... all of them.

 

How Many Billions Of Drug-Laundered Money Does It Take To Shut Down A Bank?  ...  .5 if it's in delivered silver beeatchez !

 

 

tony bonn's picture

""if you're caught with an ounce of cocaine, the chances are good you're going to go to jail... for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night - I think that's fundamentally wrong." "

and she is fundamentally right!!!

and ALL of the big banks are up to their eyeballs in drug laundering - it kept wachovia alive until fdic could find a caretaker....vatican bank too....and bush sr ponied up 10billion usd of his drug money to keep bank america afloat in 2010....

wee-weed up's picture

Despite their sometimes righteous talk...

CongressCritters will never really do anything to impede the "work" of their bundlers and facilitators.

McMolotov's picture

The banks own the government. The small time crook who gets caught with an ounce of cocaine doesn't.

Simple as that.

outamyeffinway's picture

This shit is gonna blow the fuk up before this EPIC scandal gets exposed. The gov is completely infiltrated with traitors. These are such sad days in Amerika.

medium giraffe's picture

"Truth alone will endure, all the rest will be swept away before the tide of time. I must continue to bear testimony to truth even if I am forsaken by all. Mine may today be a voice in the wilderness, but it will be heard when all other voices are silenced, if it is the voice of Truth. "

-Mohandas Gandhi

LasVegasDave's picture

right, because we all want the banks to inquire into the nature of our deposits...

Sorry Mr. Lopez, you cant withdraw your money until you tell us what you are going to do with it. or where it came from.

ZHers can trash the banks for fractional reserve fraud, for taking public $ to speculate with, and for rapacious greed, but when you start holding them responsible for inquiring into the source of the funds on deposit its check mate for liberty in this country

otto skorzeny's picture

easy-don't put the $ in your jew buddy banker's banks

LasVegasDave's picture

im sorry marlene, did you say something?

otto skorzeny's picture

I'd like to give you a ride in my customized truck-the one where the tailpipe empties into the back where you are sitting

Rusty Diggins's picture

So when I go and deposit something over $1k in FRN's the teller always excuses herself and files a "suspicious activity report". Apparently a deposit of something north of $100k is suspicion-less...

Alpha Monkey's picture

No, those deposits don't happen at the front counter... it's a backroom deal... no paperwork.

ebworthen's picture

That's why I'm converting to Gold, Silver, and cash.

GMadScientist's picture

Don't worry, Dave...your kiddy-porn ring money doesn't amount to enough to require scrutiny.

All Risk No Reward's picture

LVD, pay attention - if you make a $10k transaction, they open up an investigation report.

It is already done.

When they bring in $100s of billions in cash and the banks lease the planes for the drug cartels, well, that's no problem.

When they get busted, they don't even report the money was confiscated.

It's all fraud.

Oh, did you know that Wachovia laundered $10s to $100s of billions for the Sinaloa drug cartel - THE VERY SAME CARTEL THAT WAS FED GUNS AND GRENADE LAUNCHERS, WITH TAX PAYER MONEY, UNDER FAST AND FURIOUS?

The Debt Money Tyrants run everything big...

Drug production, drug logistics, drug cartels, governments, mega banks, law enforcement, legal system, private prison system...  think Opium Wars 2.0...  this is a refinement, not a new woperation.

The Obsolete Man

https://www.youtube.com/watch?v=U3quruHpcuo

 

slyhill's picture

<snicker> he he. you said 'fundametally' 

johnnymustardseed's picture

Drug cartels will forever do less damage to the world than banks

 

augustusgloop's picture

Different sides of the same coin of evil. Heads Dimon or Draghi (depending on coin), Tails, chupacabra. Pretty awful in some places here in Mexico. Not just Cartelistas getting killed. Plenty of innocents ending up headless or wrapped in blue tarps by the side of the road. Also, in the relatively safe state of Guanajuato, about 50% of businesses report having to pay protection money to cartels or have been robbed. In Michoacan, the Cartels virtually own the state. For example every truck leaving an avocado orchard in Michoacan pays a fee to travel safely. Think about that the next time you are eating your guac. 

ersatzteil's picture

The municipal police and army have done an exemplary job in Baja Norte. Army checkpoints everywhere. There's drug violence, sure, but not so much after the local government went back to the tried-and-true PRI policy of a "gentelman's agreement" with the Tijuana Cartel.

Sadly you can't say the same for other border states. Blog del Narco gives a front row seat to the drug war if anyone's curious.

Alpha Monkey's picture

Different sides of the same coin of evil.... Pretty awful in some places here in Mexico. Not just Cartelistas getting killed. Plenty of innocents ending up headless or wrapped in blue tarps by the side of the road.

Yeah, just like the good ole days of alcohol bootleging.  Good thing they legalized that "evil" devil juice or there might still be forces killing eachother to make a profit off of delivering goods people want... And since govy wants to add a few extra levels of risk, MOAR MONEY!  Rumor has it, drug dealers don't want drugs legalized... I'll give you one guess why.

 

Cathartes Aura's picture

the "Cartels" you write of, and the "protection money" they extract. . . very similar to a nationstate tax, hmm?

one uses direct force, one seemingly less direct, in the form of a threat of violence, but the outcome, pretty much the same. . .

paying "a fee to travel safely" - yes, I could draw many taxation parallels. . . I guess it's all down to

definitions.

JustObserving's picture

Drug money saved banks in global crisis, claims UN advisor

Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-c...

 

ajax's picture

 

 

Read "Our Kind of Traitor" by John Le Carre

DaveyJones's picture

Makes sense and it's sick. The legitimate economy goes under do to criminals infiltrating the system. As the system gets desperate it relies more and more on the criminal underground for funding and techniques to hide everything. Look at Afghanistan for a fairly large example.  

FL_Conservative's picture

Whatever the amount is, the NAR can beat it.

slyhill's picture

ya, sure. but that's legal!

Yellowhoard's picture

Must be awesome to be a drug cartel leader that is, like his banker, too big to jail.

ersatzteil's picture

too big to stay in jail

"El Chapo" Guzman planned and funded his escape involving a paid off guard, laundry basket and helicopter. Cost him $250,000...cheaper than most bail bonds in the US!

ATM's picture

So legalize drugs and problem solved!

Shell Game's picture

You make too much sense......and you sound combative...

q99x2's picture

They have taken over to a large extent the United States of America. They need to be stopped militarily at this point Ms. Warren. I'm sure she knows that. Now what generals in the military are going to back her.

otto skorzeny's picture

if you want the generals involved in any of the process of the remaking of America then you are not aware of the root of this county's problems

Lost Word's picture

One example being Air Force remote controlled military version Boeing jetliners used in the 9-11 attacks on the NYC WTC Twin Towers. The Air Force was a part of the 9-11 attack Inside Job.

Do you think that in the District of Criminals, the Treasonous Joint Chiefs of Staff of the Military will do anything against the puppet Pretender and Criminal in Chief?

The Corruption starts at the Top, and works down the chain of command.

nmewn's picture

Much, much better Ma Squaw ;-)

McMolotov's picture

I'll keep calling her Grandstands With A Fist, even if no one got my joke yesterday.

knukles's picture

What if no one gets it today?

Umh's picture

I don't know if you are showing your age, but I'm showing mine by immediately recalling that.

McMolotov's picture

I'll print trillions of copies of the phrase "Grandstands With A Fist" and hand them out to the banks. I'm bound to succeed eventually according to Krugman.