Obama Declares Big Banks Too Big to Jail

Decision not to prosecute bank's money laundering sparks outrage

By Kevin Spak,  Newser Staff

Posted Dec 12, 2012 1:14 PM CST

(Newser) – The Obama administration officially bought into the idea that big banks are "too big to jail" yesterday, by deciding to fine HSBC instead of criminally prosecuting its vast money laundering operation—which funneled cash to Mexican drug cartels and Saudi banks with ties to al-Qaeda. The stated reason? The White House thought prosecution would upset markets. "It is a dark day for the rule of law," the New York Times laments in an editorial today. If prosecutors can't pursue "a case as egregious as this, the law itself is diminished."

Glenn Greenwald at the Guardian is even more outraged, pointing out that "the US is the world's largest prison state, imprisoning more of its citizens than any nation on Earth." The poor, and racial minorities in particular are locked up at an astonishing rate, often for minor drug offenses. Yet HSBC gets off the hook. "It is truly difficult to imagine corruption and lawlessness more extreme than having the government explicitly place the most powerful factions above the rule of law." Click for Greenwald's full column, or the Times' editorial.

This is a Monday, Feb. 27, 2012 file photo of  the logo is seen on a branch of HSBC bank in London.
This is a Monday, Feb. 27, 2012 file photo of the logo is seen on a branch of HSBC bank in London.   (AP Photo/Kirsty Wigglesworth, File)
Lanny Breuer, center, Assistant Attorney General of the Justice Department's Criminal Division, discusses HSBC's $1.9 billion settlement, Tuesday, Dec. 11, 2012.
Lanny Breuer, center, Assistant Attorney General of the Justice Department's Criminal Division, discusses HSBC's $1.9 billion settlement, Tuesday, Dec. 11, 2012.   (AP Photo/Richard Drew)
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Once criminal sanctions are considered off limits, penalties and forfeitures become just another cost of doing business, a risk factor to consider on the road to profits. - The New York Times

The US government is expressly saying that banking giants will not be punished when they get caught red-handed committing criminal offenses for which ordinary people are imprisoned for decades. - Glenn Greenwald

If you're Muslim and your conduct gets anywhere near helping a terrorist group, you're going to prison for a long, long time. - Glenn Greenwald

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