Cocaine Cowboys Know Best Places To Bank

Reader Supported News
By Jonathan Weil, Bloomberg News
03 August 12


The logo on the front of a branch of HSBC. (Getty Images)

To grow up in South Florida during the 1970s and 1980s, as I did, wasn’t your typical American childhood experience. Back then the area was known as the most dangerous place in the country. Carnage from the drug wars filled the local news long before “Miami Vice” became a hit TV show. By elementary school, my friends and I knew some of the lingo. A Colombian necktie wasn’t a piece of clothing, but a gruesome execution method. When I was 7 years old my barber was murdered in his shop, apparently over a drug deal.

It had been a long time since I thought much about those days. By chance I recently came across a fabulous documentary, “Cocaine Cowboys,” by Miami filmmaker Billy Corben. Then last month a Senate panel held a hearing on the U.K. bank HSBC Holdings Plc (HSBA) and its ties to drug lords, money laundering, al-Qaeda and rogue nations such as Iran and North Korea.

Here’s a bank with $2.7 trillion of assets that flouted U.S. laws for a decade, according to the July 17 report by the Senate Permanent Subcommittee on Investigations. HSBC turned a blind eye to organized crime, Mexican drug cartels and overseas terrorism financiers, and gave them access to the U.S. banking system. HSBC’s main U.S. regulator, the Office of the Comptroller of the Currency, for years tolerated its violations of anti-money laundering laws.

For this, HSBC and the OCC apologized. Justice Department fines are likely. It’s an outrage HSBC hasn’t had its U.S. banking licenses revoked, assuming the Senate panel’s report is accurate - and there’s no reason to believe it isn’t.