US Attorney General nominee Loretta Lynch is facing criticism for the deal she made that let HSBC escape prosecution after being found to have participated in a serious and far reaching program to launder drug money. Though the deal was already criticized at the time as being yet another example of prosecutors unwilling to uphold the law when it came to rich and powerful banking firms, renewed criticism has come after a report by the International Consortium of Investigative Journalists (ICIJ) on HSBC’s banking services for dictators and arms dealers.

HSBC had been under scrutiny well before being cited for money laundering for drug cartels and arms dealers when it was implicated as participating in the financing network for Al Qaeda with the Al Rajhi Bank which provided financial services to 9/11 hijacker Abdulaziz al Omari, who was on American Airlines flight 11.

Which is all to say, HSBC was completely unworthy of Lynch’s prosecutorial restraint and caution. The bank has truly earned its reputation as facilitating criminal enterprise.

Three years ago, then-U.S. Attorney of the Eastern District of New York Loretta Lynch crafted a soft-touch deferred-prosecution deal for Europe’s largest bank, HSBC, which had only been caught in the largest drug-money-laundering case in history. Today, as Lynch awaits approval for the Attorney General job, HSBC is in the news again. This time, the global mega-bank is being exposed in a massive scheme to help wealthy clients avoid taxes

In the money-laundering case, HSBC paid a $1.9 billion fine – about five weeks of profit – for its role in an amazing scandal in which the bank admitted laundering up to $850 million for a pair of Central and South America drug cartels, including the infamous Sinaloa gang. In neither case did the penalties do much to dent the bank’s bottom line. Late last year, even after the markets digested the news of the Forex scandal and other fines (including one involving mortgage fraud here in the U.S.), the bank was still a giant cash factory.

Remember how our entire political and economic system is driven by incentives? That’s why we needed “welfare reform” and leakers must be prosecuted to the fullest extent of the law? Yeah, just forget all that when it comes to the banksters. They’ll pay a relatively small fine and learn their lesson, or not, let’s just keep the train moving.

The Lynch approach to Wall Street looks a lot like the Holder approach to Wall Street – hands off. Call the Lynch nomination a win for continuity in government.

Dan Wright

Dan Wright

Daniel Wright is a longtime blogger and currently writes for Shadowproof. He lives in New Jersey, by choice.