Too Big to Jail

  • Published on
    14-Feb-2017

  • View
    213

  • Download
    1

Transcript

<ul><li><p>TOO BIG TO JAIL: </p><p>INSIDE THE OBAMA JUSTICE DEPARTMENTS DECISION </p><p>NOT TO HOLD WALL STREET ACCOUNTABLE </p><p>REPORT PREPARED BY THE REPUBLICAN STAFF OF THE </p><p>COMMITTEE ON FINANCIAL SERVICES, U.S. HOUSE OF REPRESENTATIVES </p><p>HON. JEB HENSARLING, CHAIRMAN </p><p>114TH CONGRESS, SECOND SESSION </p><p>JULY 11, 2016 </p><p>This report has not been officially adopted by the Committee on Financial Services and may not necessarily reflect the views of its Members. </p></li><li><p>TABLE OF CONTENTS </p><p>Executive Summary ................................................................................................. 1 </p><p>Background .............................................................................................................. 3 </p><p>The Federal Governments Investigations and Enforcement Actions Involving </p><p>HSBC for Violations of U.S. Anti-Money Laundering and Sanctions Laws .......... 3 </p><p>DOJ and Treasury Representations Regarding DOJs Consideration of the </p><p>Potential Impact to the Financial System of Prosecuting HSBC ............................ 8 </p><p>Attorney General Holder Walks Back His March 6, 2013, Testimony Suggesting </p><p>that Some Banks Are Too Large to Prosecute .......................................................... 10 </p><p>The House Financial Services Committees Investigation into DOJs Exercise of </p><p>Prosecutorial Discretion Concerning HSBC and Other Large Financial </p><p>Institutions ....................................................................................................................... 12 </p><p>Committee Findings .............................................................................................. 12 </p><p>Senior DOJ Leadership, Including Attorney General Holder, Overruled an </p><p>Internal Recommendation by DOJs Asset Forfeiture and Money Laundering </p><p>Section to Prosecute HSBC Because of DOJ Leaderships Concern that </p><p>Prosecuting the Bank Would Have Serious Adverse Consequences on the </p><p>Financial System ............................................................................................................. 12 </p><p>Notwithstanding Attorney General Holders Catch that HSBC Agree to DOJs Take-It-Or-Leave-It DPA Deal by November 14, 2012, HSBC Appears to Have </p><p>Successfully Negotiated with DOJ for Significant Alterations to the DPAs </p><p>Terms in the Weeks Following the Attorney Generals Deadline ......................... 18 </p><p>DOJ and the Federal Financial Regulators Were Scrambling at an Alarming </p><p>Speed to Complete Their Investigations and Enforcement Actions Involving </p><p>HSBC Before the New York Department of Financial Services ............................ 20 </p><p>In Its Haste to Complete Its Enforcement Action Against HSBC, DOJ </p><p>Transmitted Settlement Numbers to HSBC Before Consulting with OFAC to </p><p>Ensure that the Settlement Amount Accurately Reflected the Full Degree of </p><p>HSBCs Sanctions Violations ........................................................................................ 21 </p><p>The FSAs Involvement in the U.S. Governments HSBC Investigations and </p><p>Enforcement Actions Appears to Have Hampered the U.S. Governments </p><p>Investigations and Influenced DOJs Decision Not to Prosecute HSBC ............. 24 </p><p>Attorney General Holder Misled Congress Concerning DOJs Reasons for Not </p><p>Prosecuting HSBC .......................................................................................................... 26 </p></li><li><p>DOJs and Treasurys Longstanding Efforts to Improperly Impede the </p><p>Committees Investigation Appear to Constitute Contempt and Obstruction of </p><p>Congress ............................................................................................................................ 27 </p><p>DOJ Stonewalling of the Committees Information Requests and Subpoena ............................... 27 </p><p>Treasury Stonewalling of the Committees Information Requests and Subpoena ....................... 29 </p><p>The American People and the Congress Deserve to Know the Truth About the </p><p>Merits of DOJs Decision Not to Prosecute HSBC or Any of Its Executives or </p><p>Employees for Violating U.S. AML and Sanctions Laws ......................................... 33 </p><p>Appendices .............................................................................................................. 34 </p><p>Appendix 1 ........................................................................................................................ 34 </p><p>Letter from Chairmen Hensarling and McHenry to Secretary Lew and Attorney General </p><p>Holder (March 8, 2013) ............................................................................................................ 35 </p><p>Appendix 2 ........................................................................................................................ 38 </p><p>Email Regarding HSBC Developments (September 4, 2012) ........................................................ 39 </p><p>Appendix 3 ........................................................................................................................ 40 </p><p>Emails Regarding the Next Interagency Coordination Call on HSBC (September 7, 2012) .... 41 </p><p>Appendix 4 ........................................................................................................................ 42 </p><p>Letter from Chancellor Osborne to Chairman Bernanke and Secretary Geithner (September </p><p>10, 2012) ................................................................................................................................... 43 </p><p>Appendix 5 ........................................................................................................................ 46 </p><p>Email Regarding HSBC Update (September 11, 2012) .................................................................. 47 </p><p>Appendix 6 ........................................................................................................................ 48 </p><p>Email from Dennis Wood Regarding HSBC (September 11, 2012) ............................................... 49 </p><p>Appendix 7 ........................................................................................................................ 50 </p><p>Email Regarding HSBC (September 28, 2012) ............................................................................... 51 </p><p>Appendix 8 ........................................................................................................................ 52 </p><p>Email Regarding Updated Secretary Travel Schedules to India and Japan Oct. 5 (October 7, </p><p>2012) ......................................................................................................................................... 53 </p><p>Appendix 9 ........................................................................................................................ 58 </p><p>Email Regarding AGC Meeting (October 11, 2012) ........................................................................ 59 </p><p>Appendix 10 ...................................................................................................................... 60 </p><p>Email Regarding HSBC (November 5, 2012) .................................................................................. 61 </p><p>Appendix 11 ...................................................................................................................... 62 </p><p>Email Regarding HSBC Is Now An Out of Control Express Train (November 7, 2012) ........ 63 </p><p>Appendix 12 ...................................................................................................................... 64 </p><p>Email Regarding New Developments in HSBC (November 8, 2012) ............................................ 65 </p><p>Appendix 13 ...................................................................................................................... 66 </p><p>Email from Dennis Wood Regarding HSBC (November 9, 2012) .................................................. 67 </p></li><li><p>Appendix 14 ...................................................................................................................... 68 </p><p>Email Chain Regarding HSBC (November 9, 2012) ....................................................................... 69 </p><p>Appendix 15 ...................................................................................................................... 71 </p><p>DOJ Settlement Documentation Transmitted to HSBC (November 9, 2012) .............................. 72 </p><p>Appendix 16 .................................................................................................................... 152 </p><p>Emails Regarding New Developments in HSBC (November 13-14, 2012) ................................. 153 </p><p>Appendix 17 .................................................................................................................... 156 </p><p>Email from Tyler Hand Regarding New Developments in HSBC (November 14, 2012) ........... 157 </p><p>Appendix 18 .................................................................................................................... 159 </p><p>Email to Christopher Meade and Christian Weideman Regarding HSBC Status (November </p><p>14, 2012) ................................................................................................................................. 160 </p><p>Appendix 19 .................................................................................................................... 162 </p><p>Email Regarding HSBC Update (November 30, 2012) ................................................................. 163 </p><p>Appendix 20 .................................................................................................................... 164 </p><p>Email Regarding HSBC (December 4, 2012) ................................................................................ 165 </p><p>Appendix 21 .................................................................................................................... 166 </p><p>Email from DOJ Regarding HSBC Update (November 27, 2012) ............................................... 167 </p><p>Appendix 22 .................................................................................................................... 168 </p><p>Secretary Geithner Memorandum Regarding Meeting with Chancellor Osborne (October 9, </p><p>2012) ....................................................................................................................................... 169 </p><p>Appendix 23 .................................................................................................................... 182 </p><p>Email Regarding HSBC Team (September 12, 2012) ................................................................... 183 </p><p>Appendix 24 .................................................................................................................... 185 </p><p>Email Regarding Update on Iran Sanctions-Related Actions Against Banks (Aug. 24, 2012) .. 186 </p><p>Appendix 25 .................................................................................................................... 188 </p><p>Email Regarding AGC Meeting (August 27, 2012) ....................................................................... 189 </p><p>Appendix 26 .................................................................................................................... 191 </p><p>Email Regarding Proposed Language for Memo (August 30, 2012) ............................................ 192 </p><p>Appendix 27 .................................................................................................................... 193 </p><p>Email Regarding HSBC Legally Privileged (September 24-25, 2012) ...................................... 194 </p><p>Appendix 28 .................................................................................................................... 196 </p><p>Emails Regarding Talking Points (August 13, 2012) ................................................................... 197 </p><p>Appendix 29 .................................................................................................................... 200 </p><p>Email Chain Regarding Talking Points (August 13-14, 2012) .................................................... 201 </p><p>Appendix 30 .................................................................................................................... 204 </p><p>Email Regarding HSBC Settlement Timetable (August 24, 2012) .............................................. 205 </p><p>Appendix 31 .................................................................................................................... 208 </p></li><li><p>Email Regarding Just for Your Awareness (October 4, 2012) .................................................. 209 </p><p>Appendix 32 .................................................................................................................... 210 </p><p>Email Regarding Updated Secretary Travel Schedules (October 8, 2012) ................................. 211 </p><p>Appendix 33 .................................................................................................................... 217 </p><p>Email from Jonathan Thomas Regarding HSBC (August 15, 2012) ........................................... 218 </p><p>Appendix 34 .................................................................................................................... 219 </p><p>Letter from Chairmen Hensarling and McHenry to Atty General Holder (June 10, 2013) ...... 220 </p><p>Appendix 35 .................................................................................................................... 221 </p><p>Letter from Chairman McHenry to Attorney General Holder (August 27, 2013) ...................... 222 </p><p>Appendix 36 .................................................................................................................... 226 </p><p>Letter from Chairmen Hensarling and McHenry to Atty General Holder (Mar. 25, 2014) ...... 227 </p><p>Appendix 37 .................................................................................................................... 229 </p><p>Letter from Chairmen Hensarling and McHenry to Atty General Holder (May 23, 2014) ....... 230 </p><p>Appendix 38 .................................................................................................................... 231 </p><p>Letter from Chairman McHenry to Attorney General Holder (December 5, 2014) .................... 232 </p><p>Appendix 39 .................................................................................................................... 234 </p><p>Letter from Chairman Hensarling to Attorney General Holder (March 10, 2015) .................... 235 </p><p>Appendix 40 .................................................................................................................... 236 </p><p>Letter from Assistant Secretary Fitzpayne to Chairman Hensarling (March 28, 2013) ........... 237 </p><p>Appendix 41 .................................................................................................................... 239 </p><p>Letter from Assistant Secretary Fitzpayne to Chairman McHenry (May 10, 2013) .................. 240 </p><p>Appendix 42 .................................................................................................................... 242 </p><p>Letter from Chairman McHenry to Secretary Lew (June 7, 2013) ..................................</p></li></ul>