Too Big To Jail? HSBC & Terrorist Finance

[Tony Gosling]

Too Big To Jail? HSBC & Terrorist Finance
rgds,
Tony


Black Dossier: HSBC & Terrorist Finance
July 30, 2012
http://www.blacklistednews.com/Black_Dossier:_HSBC_&amp%3B_Terrorist_Finance_/20768/0/0/0/Y/M.html
http://www.hsgac.senate.gov/subcommittees/investigations/hearings/us-vulnerabilities-to-money-laundering-drugs-and-terrorist-financing-hsbc-case-history
http://antifascist-calling.blogspot.co.uk/2012/07/black-dossier-hsbc-terrorist-finance.html

By Tom Burghardt

It's tough being the world's second largest bank.

HSBC, the London-based British multinational 
banking and financial services giant operates in 
85 countries with 7,200 offices worldwide with 
assets totaling more than $2.6 trillion (£4.06tn).

They're also caught-up in serial scandals: the 
Libor interest rate-fixing scam, serious charges 
of drug money laundering as well as suspicions 
that bank officers "palled around" with terrorist financiers.

Founded in 1865 when the British Crown seized 
Hong Kong as a colony in the aftermath of the 
First Opium War, British merchants (today we'd 
call them drug lords) needed a bank to handle the 
brisk trade in the illicit substance and launched 
the Hongkong and Shanghai Banking Company 
Limited. Rebranded "HSBC" in 1991, the bank 
expanded at breakneck speed in the heady days after The Wall fell.

While some might call them a success story, 
exemplars of financial wizardry in tough economic 
times, more appropriately perhaps, we might 
borrow a term from Mafia lore to describe their 
preeminent position in the capitalist pantheon of corrupt institutions: juiced.

'Sorry, now Go Away'

Today, the "War on Drugs" rivals the "War on 
Terror" for top spot on the global hypocrisy index.

Moral equivalencies abound. After all, when 
American secret state agencies manage drug flows 
or direct terrorist proxies to attack official 
enemies it's not quite the same as battling terror or crime.

Pounding home that point, a new report by the 
Senate Permanent Subcommittee on Investigations 
accused HSBC of exposing "the U.S. financial 
system to a wide array of money laundering, drug 
trafficking, and terrorist financing risks due to 
poor anti-money laundering (AML) controls."

That 335-page report, "U.S. Vulnerabilities to 
Money Laundering, Drugs, and Terrorist Financing: 
HSBC Case History," (large pdf file available 
here) was issued after a year-long Senate 
investigation zeroed-in on the bank's U.S. 
affiliate, HSBC Bank USA, N.A., better known as HBUS.

Drilling down, we learned that amongst the 
"services" offered by HSBC subsidiaries and 
correspondent banks were sweet deals with 
financial entities with terrorist ties; the 
transportation of billions of dollars in cash by 
plane and armored car through their London 
Banknotes division; the clearing of 
sequentially-numbered travelers checks through 
dodgy Cayman Islands accounts for Mexican drug lords and Russian mafiosi.

 From richly-appointed suites at Canary Wharf, 
London, the bank's "smartest guys in the room" 
handed some of the most violent gangsters on 
earth the financial wherewithal to organize their 
respective industries: global crime.

A case in point. In 2008 alone the Senate 
revealed that the bank's Cayman Islands branch 
handled some 50,000 client accounts (all without 
benefit of offices or staff on Grand Cayman, mind 
you), yet still managed to ship some $7 billion 
(£10.9bn) in cash from Mexico into the U.S. Now that's creative accounting!

Playing fast and loose with U.S. banking rules, 
Subcommittee Chairman Carl Levin (D-MI) said that 
by exploiting the bank's "poor AML controls, HBUS 
exposed the United States to Mexican drug money, 
suspicious travelers cheques, bearer share 
corporations, and rogue jurisdictions."

Describing a "compliance culture" that was 
"pervasively polluted for a long time," Levin 
said it "will take more than words for the bank to change course."

Yet weasel words and butt-covering were all that 
were proffered to the American people even before 
Senate hearings began. Bank spokesman Robert 
Sherman said in an emailed statement that HSBC 
"will acknowledge that, in the past, we have 
sometimes failed to meet the standards that 
regulators and customers expect. We will 
apologize, acknowledge these mistakes, answer for 
our actions and give our absolute commitment to fixing what went wrong."

Right on cue, chief compliance officer David 
Bagley dramatically fell on his sword during 
those hearings and resigned on camera. It was 
quite a performance even by Washington's tawdry standards.

Appearing contrite, Bagley told the panel: 
"Despite the best efforts and intentions of many 
dedicated professionals, HSBC has fallen short of 
our own expectations and the expectations of our 
regulators. ... I recommended to the group that 
now is the appropriate time for me and for the 
bank, for someone new to serve as the head of group compliance."

While there's no word yet just how big Bagley's 
golden parachute will be, it's a sure bet he 
won't spend a day in jail, nor for that matter 
will Lord Stephen Green, HSBC's former Chairman and Chief Executive Officer.

Between 2003-2010, Green tilled the helm after 
serial stints directing The Bank of Bermuda Ltd., 
HSBC Mexico, SA, HSBC Private Banking Holdings 
(Suisse) SA and HSBC North American Holdings 
Inc.; units which feature prominently in the 
scandal. Sensing perhaps that the jig was up, 
last year he joined David Cameron's Conservative 
government as Minister of State for Trade and Investment.

Unlike Pappy Bush who claimed to be "out of the 
loop" during the Iran-Contra guns-for-drugs 
affair, Green was fully apprised of bank 
shenanigans and the Senate published emails which prove it.

Cheekily however, while underlings take the fall, 
Green told The Daily Telegraph, "I do not believe 
that I have a case to answer other than in the 
important sense that as chairman and chief 
executive I was responsible for what the company 
did. HSBC has expressed regret for the failures. I share that regret."

The Telegraph noted that Green has not considered 
resigning from Cameron's government, saying he 
was "very engaged" with his current plum post.

Ironically enough, the current Baron of 
Hurstpierpoint is an ordained priest in the 
Church of England and the author of an 
inspirational tome, Good Value: Reflections on 
Money, Morality and an Uncertain World. And no, you can't make this stuff up!

The top spot is now occupied by Stuart Gulliver 
who, quicker than you can say "we're sorry," 
admonished employees to "do better" and expressed 
remorse over his firm's "unacceptable behavior." 
Never mind that before ascending the throne, 
Gulliver was director of HBUS, HSBC Latin 
American Holdings Ltd., and HSBC Bank Middle East 
Ltd., divisions that have raised more than an 
eyebrow or two amongst Subcommittee investigators.

Topping Bagley's Kabuki-lite performance with her 
own rendition of clown car camp, Irene Dorner, 
HBUS's President and CEO told the Senate: "We 
deeply regret and apologize for the fact that 
HSBC did not live up to the expectations of our 
regulators, our customers, our employees, and the 
general public. HSBC's compliance history, as 
examined today, is unacceptable. ... We've worked 
hard to foster a new culture that values and 
rewards effective compliance, and that starts at the top."

Bathos aside, it was a polite way of saying 
"let's move on" and get back to the business of 
lining our pockets; after all, it's what we do best.

'The past is never dead. It's not even past'

Years before hijackers slammed passenger planes 
into the World Trade Center and the Pentagon 
killing nearly 3,000 people, secret state 
agencies began to exploit the fraternal links 
between Osama bin Laden's Afghan-Arab database of 
disposable Western intelligence assets, also 
known as al Qaeda, and prominent financial institutions.

In his 1999 book, Dollars for Terror, journalist 
Richard Labévière relates how a former CIA 
analyst explained: "The policy of guiding the 
evolution of Islam and helping them against our 
adversaries worked marvelously well in 
Afghanistan against the Red Army. The same 
doctrines can still be used to destabilize what 
remains of Russian power, and especially to 
counter the Chinese influence in Central Asia."

Was a new Cold War dawning?

No. In fact, it was the same Cold War. Only this 
time it was tricked-out in seductive finery by 
denizens of Western think-tanks and on-the-make 
NGOs. In the age of spin and endless news cycles, 
they'd hit upon a splendid formula to pour the 
"old" imperialist wine into new bottles: 
"humanitarian intervention" and a "responsibility to protect."

It was a brilliant script. In the blink of an eye 
our media-saavy masters could "enhance democracy" 
and "reform markets," magically transforming 
publicly-owned resources into privately-held 
assets controlled by banks! That terrorist 
proxies would serve as walk-ons and help drive 
the final nail into the coffin of national 
sovereignty wasn't considered proper conversation in polite company.

Labévière wondered whether "the new forms of 
terrorism actually embody the highest stage of 
capitalism?" They did, and "the straw men of the 
bin Laden Organization's subsidiaries [were] very 
well received by the business lawyers of Wall 
Street and the Bahamas, by the wealth managers of 
Geneva, Zurich and Lugano, and in the hushed salons of the City of London."

Not so curiously perhaps, "the privatization of 
violence and the privatization of the economy has 
become paradigmatic." In fact, "apart from any 
religious purpose," Labévière wrote, "the 'Jihad' 
is gaining ground as a profitable activity. It 
becomes liable to all the mafioso devolutions, 
and sinks into pure banditry. In many cases, 
Islamist ideology is used as a wonder worker to 
paper over banditry in all its forms."

Bin Laden as a Mafia capo di tutti capi? It 
certainly was a novel reading of geopolitical machinations!

More to the point, if an "army marches on its 
stomach," who then are the money men who put food 
in their bellies and kalashnikovs in their hands?

Bankrolled by Saudi and Gulf banks with a wink, a 
nod and logistical support from their old 
friends, the CIA and the Pentagon, today's Green 
condottieri once again are on the march, wrecking 
havoc and sowing chaos, with particular attention 
paid to states targeted as official enemies by 
the Global Godfather. Just ask the Iraqis, Libyans and Syrians.

While the Senate report may have disclosed that 
HSBC turned a blind eye to terrorist financing 
among it correspondent banks, the Riyadh-based Al 
Rajhi Bank for one, Saudi Arabia's largest 
privately-held financial institution, such 
arrangements hardly flourished in a vacuum.

With assets totaling $59 billion (£92.5bn), the 
Al Rajhi's are amongst the wealthiest families in 
the Kingdom. Investigators found that after 9/11 
"evidence began to emerge that Al Rajhi Bank and 
some of its owners had links to organizations 
associated with financing terrorism, including 
that one of the bank's founders was an early financial benefactor of al Qaeda."

While the Al Rajhi family deny any role in 
financing terrorism, they have declined "to 
address specific allegations made in American 
intelligence and law-enforcement records, citing 
client confidentiality," The Wall Street Journal reported back in 2007.

Journalist Glenn R. Simpson averred that "a 2003 
CIA report claims that a year after Sept. 11, 
with a spotlight on Islamic charities, Mr. Al 
Rajhi ordered Al Rajhi Bank's board 'to explore 
financial instruments that would allow the bank's 
charitable contributions to avoid official Saudi scrutiny'."

"A few weeks earlier," the Journal disclosed, the 
Agency said that "Mr. Al Rajhi 'transferred $1.1 
billion to offshore accounts--using commodity 
swaps and two Lebanese banks--citing a concern 
that U.S. and Saudi authorities might freeze his 
assets.' The report was titled 'Al Rajhi Bank: Conduit for Extremist Finance'."

Although U.S. law enforcement and secret state 
agencies "acknowledge it is possible that 
extremists use the bank's far-flung branches and 
money-transfer services without bank officials' 
knowledge," the Journal noted that CIA analysts 
had concluded that "senior Al Rajhi family 
members have long supported Islamic extremists 
and probably know that terrorists use their bank."

It goes without saying that one should always 
approach CIA reports with a healthy dose of 
skepticism, especially in light of the Agency's 
well-documented history of employing cut-outs 
such as al Qaeda as terrorist cats' paws.

Such reports however, lay a trail of bread crumbs 
that policy makers can either act upon or more 
likely, ignore. That senior Bush and Obama 
administration officials did nothing with this 
information, never mind the regulatory agencies 
charged to enforce anti-money laundering laws, is 
testament to the corrupt, bipartisan nature of American policy as a whole.

It also beggars belief that Lord Green or the 
bank's compliance officers were unaware of CIA 
allegations or that Britain's own foreign 
intelligence arm, MI6, hadn't apprised top 
officials of the risks involved. In fact, as 
we'll see below, HSBC's own internal documents prove otherwise.

Osama's 'Golden Chain'

There were certainly plenty of red flags flying 
which should have alerted bank officials.

In March 2002, al Qaeda's list of financial 
benefactors surfaced when computers were seized 
in Sarajevo at the Bosnian headquarters of the 
Benevolence International Foundation, "a Saudi 
based nonprofit organization which was also 
designated a terrorist organization by the Treasury Department."

Osama bin Laden, who held a Bosnian passport 
issued by the breakaway government fronted by 
Western "liberal interventionist" darling Alija 
Izetbegovic during NATO's dismemberment of 
socialist Yugoslavia, was a supporter of the Nazi 
SS Handschar Division during World War II. Bin 
Laden referred to this group of financial angels as his "Golden Chain."

Additional evidence also emerged in 2002 during 
Operation Green Quest, a Treasury Department 
effort to "disrupt terrorist financing in the United States."

In March of that year, law enforcement officials 
raided the Herndon, Virginia offices of the SAAR 
Foundation "an Al Rajhi-related entity." Indeed, 
the name "SAAR" was an acronym for the 
organization's founder, Sulaiman Abdul Aziz Al 
Rajhi, the controlling partner of the Al Rajhi Bank.

Subcommittee investigators commented that "one of 
the 20 handwritten names in the Golden Chain 
document identifying al Qaeda's early key 
financial benefactors is Sulaiman bin Abdul Aziz 
Al Rajhi, one of Al Rajhi Bank's key founders and most senior officials."

An affidavit supporting the search warrants 
"detailed numerous connections between the 
targeted entities and Al Rajhi family members and 
related ventures. The affidavit stated that over 
100 active and defunct nonprofit and business 
ventures in Virginia were part of what it 
described as the 'Safa Group,' which the United 
States had reasonable cause to believe was 
'engaged in the money laundering tactic of 
'layering' to hide from law enforcement 
authorities the trail of its support for terrorists."

Green Quest investigators were particularly keen 
on unraveling links between the SAAR Foundation 
and the Swiss Al Taqwa Bank, incorporated in the 
Bahamas in 1988 for "tax purposes."

Founded by Swiss Nazi sympathizer and convert to 
Islam, Albert Armand (Achmed) Huber, who 
professed admiration for both Adolph Hitler and 
Osama bin Laden, the bank was accused by U.S. 
officials in helping al Qaeda launder funds. 
Although the Treasury Department froze its assets 
in 2001, the investigation was shut down by the 
Bush administration before deeper linkages could be fully uncovered.

In 2011, a lawsuit was filed by insurance giant 
Lloyd's of London against Saudi Arabia which 
sought to recover pay outs to victims of the 9/11 
attacks. The suit noted "that two individuals who 
were former executives at Bank al Taqwa, Ibrahim 
Hassabella and Samir Salah, were also associated with the SAAR Foundation."

At the time, The Independent reported that the 
legal claim suggested that defendants 
"'knowingly' provided resources, including 
funding, to al-Qa'ida in the years before the 
attack and encouraged anti-Western sentiment 
which increased support for the terror group."

According to court briefs, "Absent the 
sponsorship of al-Qa'ida's material sponsors and 
supporters, including the defendants named 
therein, al-Qa'ida would not have possessed the 
capacity to conceive, plan and execute the 11 
September attacks. The success of al-Qa'ida's 
agenda, including the 11 September attacks 
themselves, has been made possible by the lavish 
sponsorship al-Qa'ida has received from its 
material sponsors and supporters over more than a 
decade leading up to 11 September 2001."

Senate investigators, citing Green Quest and 
Lloyd's case files, noted that "Mr. Hassabella 
was a former secretary of al Taqwa Bank and a 
shareholder of SAAR Foundation Inc. Mr. Saleh was 
a former director and treasurer of the Bahamas 
branch of al Taqwa Bank, and president of the 
Piedmont Trading Corporation which was part of 
the SAAR network. The U.S. Treasury Department 
has stated: 'The Al Taqwa group has long acted as 
financial advisers to al Qaeda, with offices in 
Switzerland, Liechtenstein, Italy and the 
Caribbean.' Regarding Akida Bank, the lawsuit 
complaint alleged that Sulaiman bin Abdul Aziz Al 
Rajhi was 'on the board of directors of Akida 
Bank in the Bahamas' and that 'Akida Bank was run 
by Youssef Nada, a noted terrorist financier'."

The report went on to state that "HSBC was fully 
aware of the suspicions that Al Rajhi Bank and 
its owners were associated with terrorist 
financing, describing many of the alleged links 
in the Al Rajhi Bank client profile."

As icing on the cake, a 2007 study published by 
the Congressional Research Service (CRS) also 
found that "Saudi individuals and other 
financiers associated with the Golden Chain 
enabled bin Laden and Al Qaeda to replace lost 
financial assets and establish a base in 
Afghanistan following their abrupt departure from Sudan in 1996."

Assets I might add, that were used to bankroll the 9/11 attacks.

'Keen to maintain the relationships'

HSBC's dubious links to the Al Rajhi Bank didn't 
end with information discovered in the "Golden 
Chain" files; it fact, they were the tip of the proverbial iceberg.

After 9/11, the FBI reported that three of the 
hijackers, Hani Hanjour, Nawaf Alhazmi and 
Abdulaziz Alomari cashed thousands of dollars in 
travelers checks and received wire transfers from 
an unnamed individual drawn on accounts at the Al Rajhi Bank.

As researcher Kevin Fenton pointed out in 
Disconnecting the Dots, links among most of the 
hijackers were discovered through their banking 
transactions. "In this context," Fenton wrote, 
"it is worth noting that Global Objectives, a 
British banking compliance company, identified 
fifteen of the nineteen hijackers as high-risk 
individuals and established database profiles for 
them before the attacks. ... The list of 
high-risk people maintained by Global Objectives 
was available to dozens of banks," a list that presumably also included HSBC.

While there is no evidence that HSBC, or for that 
matter the Al Rajhi Bank, had prior knowledge of 
the 2001 atrocity, the gross indifference 
exhibited by these institutions through their 
violation of "know your client" (KYC) rules 
governing financial transactions reveal a callous 
disdain for elemental norms as they raced to 
inflate their balance sheets come hell or high water.

Privileged communications amongst senior staff 
revealed they were well aware of the issues and 
risks involved, yet did worse than nothing, they 
lobbied that HSBC continue their arrangements with the Al Rajhi Bank.

Suspicions were such that senior staff 
"classified Al Rajhi Bank as a 'Special Category 
of Client' (SCC), its highest risk designation." 
This was done, Senate investigators noted, 
because the Kingdom was considered a "high risk 
country" and due to the fact Al Rajhi's largest 
shareholder, Sulaiman bin Abdul Aziz Al Rajhi was 
considered "a Politically Exposed Person (PEP)."

Internal HSBC documents also revealed that in 
2002, that is, after the 9/11 provocation, "the 
International Private Banking Department asked to 
transfer [several] accounts to HSBC's 
Institutional Banking Department in Delaware 
which had superior ability to monitor account activity."

In fact, transferring Al Rajhi accounts to the 
bank's Delaware division would have just the 
opposite effect and bank officials knew it.

As journalist Nicholas Shaxson noted in his 
exposé of offshore banking, Treasure Islands, 
"Delaware is the biggest state provider of 
offshore corporate secrecy." Shaxson pointed out 
that Delaware's Chancery Court has a "'business 
judgement rule' under which courts should not 
second-guess corporate managers," thereby 
"granting corporate bosses extraordinary freedoms 
from bothersome stockholders, judicial review, and even public opinion."

So much for any alleged "superior ability to monitor account activity"!

HBUS's Joseph Harpster wrote an email, stating: 
"The most recent concern arose when three wire 
transfers for small amounts ($50k, $3k and $1.5k) 
were transferred through the account for names 
that closely resembled names, not exact matches, 
of the terrorists involved in the 9/11 World 
Trade Center attack. ... The profile of the main 
account reflects a doubling of wire transfer 
volume since 9/01, a large number of travelers 
checks but with relatively low value and some 
check/cash deposits. According to the account 
officer, traffic increased because they have 
chosen to send us more business due to their 
relationship with Saudi British Bank and the 
added strength of HBC versus Republic. ... 
Maintaining our business with this name is 
strongly supported by David Hodghinson of [Saudi 
British Bank] and Andre Dixon, Deputy Chairman of 
[HSBC Bank Middle East]. Niall Booker and Alba Khoury [of HBUS] also support."

Aside from adverse publicity, the "low value" of 
the transactions seemed not to have troubled 
Harpster or his associates in the least. After 
all, the total "cost" of murdering 3,000 human 
beings were certainly small compared to the price 
of a vacation home in the Hamptons or a new Maserati.

Anxious there might be increased scrutiny from 
regulators (no worries there!), Harpster's email 
was forwarded by Douglas Stolberg, the head of 
Commercial and Institutional Banking to Alexander 
Flockhart, then a senior executive in Retail and 
Commercial Banking at HBUS. Stolberg noted: "As 
we discussed previously, Compliance has raised 
some concerns regarding the ongoing maintenance 
of operating/clearing accounts for Al Rajhi 
group." He forwarded recommendations on how to 
handle the account: "Retain [International 
Private Banking] as the relationship manager 
domicile for continuity purposes, and as we 
understand there is interest in further 
developing private banking business with family 
members. ... Domicile the actual accounts with 
Delaware where HBUS's most robust account screening capabilities reside."

"Screening capabilities" which could be shielded 
from nosy regulators due to Delaware's strict bank secrecy laws.

Stolberg went on to state: "[T]his has become a 
fairly high profile situation. Compliance’s 
concerns relate to the possibility that Al 
Rajhi's account may have been used by terrorists. 
If true, this could potentially open HBUS up to 
public scrutiny and/or regulatory criticism. SABB 
[Saudi British Bank] are understandably keen to 
maintain the relationships. As this matter 
concerns primarily reputational and compliance 
risks, we felt it appropriate for SMC [Senior 
Management Committee] members to be briefed ... 
so that they may opine on the acceptability of 
the plan. Please advise how you would prefer us to proceed." (emphasis added)

According to Senate staff, "Mr. Harpster reported 
a week later that Mr. Flockhart had decided to 
transfer the accounts to HBUS in the Delaware office."

But HSBC weren't the only entities hoping to 
curry favor with the Kingdom. A 2009 Government 
Accountability Office (GAO) report went on to 
note that "certain performance targets set by the 
State Department had been dropped in 2009, such 
as the establishment of a Saudi Commission on 
Charities to oversee actions taken by Saudi 
charities abroad as well as certain regulations of cash couriers."

Although GAO "recommended that the United States 
reinstate the dropped performance targets to 
prevent the flow of funds from Saudi Arabia 
'through mechanisms such as cash couriers, to 
terrorists and extremists outside Saudi Arabia,' 
the State Department's "most recent annual 
International Narcotics Control Strategy Report 
contains no information about Saudi Arabia's 
anti-money laundering or terrorist financing efforts."

One reason why the State Department's report 
contains "no information" just might be the Obama 
administration's policy of supporting 
Saudi-backed Salafi terrorists soon to come 
online in Libya and Syria, financed through 
"Saudi charities abroad" or more directly through "cash couriers."

'You'd better be making lots of money!'

The Senate disclosed that HSBC "provided Al Rajhi 
Bank with a wide range of banking services, 
including wire transfers, foreign exchange, trade 
financing, and asset management services."

"In the United States," investigators learned 
that "a key service was supplying Al Rajhi Bank 
with large amounts of physical U.S. dollars, 
through the HBUS U.S. Banknotes Department."

"The physical delivery of U.S. dollars to Al 
Rajhi Bank was carried out primarily through the 
London branch of HBUS, often referred to internally as 'London Banknotes'."

Indeed, "HBUS records indicate that the London 
Banknotes office had been supplying U.S. dollars 
to Al Rajhi Bank for '25+ years.' In addition to 
the London branch, HBUS headquarters in New York 
opened a banknotes account for Al Rajhi Bank in 
January 2001. The U.S. dollars were physically 
delivered to Al Rajhi Bank in Saudi Arabia."

"On one occasion in 2008," Senate staff reported, 
the head of HSBC Global Banknotes Department told 
a colleague: 'In case you don't know, no other 
banknotes counterparty has received so much 
attention in the last 8 years than Alrajhi.' 
Despite, in the words of the KYC client profile, 
a 'multitude' of allegations, HSBC chose to 
provide Al Rajhi bank with banking services on a global basis."

Even though the Al Rajhi Bank "had not been 
indicted, designated a terrorist financier, or 
sanctioned," HSBC's Group Compliance section 
recommended that affiliates should sever their ties.

After that initial decision however, "HSBC 
affiliates disregarded the recommendation and 
continued to do business with the bank, while 
others terminated their relationships but 
protested HSBC's decision and urged HSBC to reverse it."

Complaints by lower level staff continued, 
disregarded by higher-ups, even though a U.S. 
indictment was issued in February 2005 for two 
individuals "accused among other matters, of 
cashing $130,000 in U.S. travelers cheques at Al 
Rajhi Bank in Saudi Arabia" and then smuggling 
the cash to CIA-backed terrorists in Chechnya.

Although internal bank documents showed that 
officials decided to cut their ties to the Saudi 
financial institution, they reversed themselves 
when pressure was brought to bear by Al Rajhi 
officials. Between 2006 and 2010, Al Rajhi 
received shipments totaling more than $1 billion 
in physical cash in the lucrative banknotes 
business from HSBC's U.S. affiliate according to 
investigators. Officials at the Saudi bank "had 
threatened to pull all of its business from HSBC 
if the U.S. banknotes business were not restored."

Senate staff reported that on January 4, 2005, 
"HBUS AML Compliance head Ms. Pesce sent an email 
to Daniel Jack, an HBUS AML Compliance Officer 
who often dealt with the London Banknotes office, 
instructing him to: '[p]lease communicate that 
Group Compliance will be recommending terminating 
the Al Rajhi relationship.' Mr. Jack inquired as 
to when that recommendation would be made. She 
responded: 'I expect to see an email from Susan 
Wright today. She tells me that HBME [HSBC Bank 
Middle East] does not agree with Compliance and 
will not be terminating the relationship from the 
Middle East, but she/David B[agley] recommend 
that in light of US scrutiny, climate, and 
interest by law enforcement, we in the US sever the relationship from here'."

At the time, Susan Wright was "the Chief Money 
Laundering Control Officer for the entire HSBC 
Group. She reported to David Bagley, head of the 
HSBC Group's overall Compliance Department."

Senate investigators noted that the "documents do 
not explain why HSBC Middle East disagreed with 
the decision or why it was allowed to continue 
its relationship with Al Rajhi Bank, when HSBC's 
Group Compliance had decided to sever the 
relationship between the bank and other HSBC 
affiliates due to terrorist financing concerns."

It soon became clear however, that "HSBC Group 
Compliance began to narrow its scope." Shortly 
thereafter a trader in the Banknotes department 
wrote, "for us is business as usual." Alan 
Ketley, HBUS AML Compliance Officer commented on 
the decision not to include Al Rajhi Trading in 
their earlier decision to sever all ties: "Looks 
like you're fine to continue dealing with Al 
Rajhi. You'd better be making lots of money!"

Meanwhile, "Al Rajhi Bank communicated the threat 
to 'pull any new business with HSBC' unless given 
a 'satisfactory explanation' why HSBC had stopped 
supplying it with U.S. dollars via its 
relationship managers," the Senate disclosed.

In short order, it was business as usual.

Despite continuing allegations of terrorist 
financing swirling around Al Rajhi Bank, HBUS 
"continued to supply, through its London branch, 
hundreds of millions of U.S. dollars to Al Rajhi 
Bank in Saudi Arabia. In addition, at Al Rajhi 
Bank's request, HBUS expanded the relationship in 
January 2009, by authorizing its Hong Kong branch 
to supply Al Rajhi Bank with non-U.S. currencies, 
including the Thai bat, Indian rupee, and Hong Kong dollar." (emphasis added)

When concerns were raised internally once again, 
Christopher Lok, the head of HSBC's Global 
Banknotes Department in New York fired back: 
"This is an on-going debate that will never go 
away. My stance remains the same, i.e. until 
it[']s proved we cannot simply rely on the Wall 
Street Journal['s] reports and unconfirmed 
allegations and 'punish’ the client'."

Needless to say, Hong Kong's "arrangement" with Al Rajhi went forward.

Despite "troubling information" which should have 
led to HSBC's quick exit from the banknotes 
market, the Senate reported that "HBUS continued 
to supply U.S. dollars to the bank, and even 
expanded its business, until 2010, when HSBC 
decided, on a global basis, to exit the U.S. banknotes business."

• • •


In conclusion, one needn't be a "conspiracy buff" 
to posit a link from HSBC to Al Rajhi to "cash 
couriers" operating across the Middle East in 
support of a multitude of U.S.-Saudi-backed 
"regime change" gambits in play today; policies 
which "worked marvelously well in Afghanistan against the Red Army."

As investigative journalist Ed Vulliamy pointed 
out in The Observer, the issues involved here are 
wider than drug money laundering or terrorist 
finance. "It is about where banks, law 
enforcement officers and the regulators--and 
politics and society generally--want to draw the 
line between the criminal and supposed 'legal' economies."

Commenting on the HSBC scandal, Robert Mazur, a 
former Customs Department deep-cover specialist 
and author of The Infiltrator, who penetrated 
Medellín cartel money laundering operations 
during the prosecution and collapse of BCCI in 
1991, told The Observer that "the only thing that 
will make the banks properly vigilant to what is 
happening is when they hear the rattle of handcuffs in the boardroom."

"The stark truth is," Vulliamy wrote, "the notion 
of any dichotomy between the global criminal 
economy and the 'legal' one is fantasy. Worse, it 
is a lie. They are seamless, mutually interdependent--one and the same."
--
+44 (0)7786 952037
http://groups.google.com/group/uk-911-truth
http://www.youtube.com/user/PublicEnquiry
http://groups.yahoo.com/group/Diggers350/
http://www.reinvestigate911.org/
http://www.thisweek.org.uk/
http://www.911forum.org.uk/
"Capitalism is institutionalised bribery."
_________________
www.abolishwar.org.uk
www.globalresearch.ca
www.public-interest.co.uk
www.radio4all.net/index.php/series/Bristol+Broadband+Co-operative
www.facebook.com/media/set/?set=a.1407615751783.2051663.1274106225&l=90330c0ba5&type=1
<http://utangente.free.fr/2003/media2003.pdf>http://utangente.free.fr/2003/media2003.pdf 

"The maintenance of secrets acts like a psychic 
poison which alienates the possessor from the community" Carl Jung
<https://217.72.179.7/members/www.bilderberg.org/phpBB2/>https://217.72.179.7/members/www.bilderberg.org/phpBB2/

Fear not therefore: for there is nothing covered 
that shall not be revealed; and nothing hid that 
shall not be made known. What I tell you in 
darkness, that speak ye in the light and what ye 
hear in the ear, that preach ye upon the housetops. Matthew 10:26-27

Die Pride and Envie; Flesh, take the poor's advice.
Covetousnesse be gon: Come, Truth and Love arise.
Patience take the Crown; throw Anger out of dores:
Cast out Hypocrisie and Lust, which follows whores:
Then England sit in rest; Thy sorrows will have end;
Thy Sons will live in peace, and each will be a friend.
http://tinyurl.com/6ct7zh6  
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://mailman.gn.apc.org/mailman/private/diggers350/attachments/20120801/c50be85c/attachment.html>