Banking Regulation Expert Accuses AG Nominee Lynch Of Tolerating Banking Crime

Econintersect:  William K. Black, Associate Professor of Economics and Law at the University of Missouri Kansas City and an experienced banking regulator has leveled some serious charges against Loretta Lynch, the Pres. Obama nominee to replace Eric Holder as the U.S. Attorney General.  She was nominated on 14 November 2014 and confirmed by the Senate Judiciary Committee 26 February 2015.  She is still awaiting a vote by the full Senate.  The necessary number of Senators (51) has publicly committed to an affirmative vote.

Here is the charge against Lynch as presented by Black:

HSBC got a sweetheart deal from the Obama administration.  It laundered vast amounts of money for Mexico’s murderous Sinaloa cartel, helped bust sanctions for terrorists and mass murderers, and did not cooperate with the investigation.  The U.S. Attorney in charge of the case, Loretta Lynch, refused to prosecute any of the HSBC bankers or even sue them individually.  Instead, there was a pathetic non-prosecution agreement limited to HSBC.  Lynch is accused of not contacting either of the primary whistleblowers in the case.  The failure to contact one of the whistleblowers has already blown up in Lynch’s face as it became public a few months ago that the governments of the U.S. and Europe were provided many years ago with data on HSBC’s Swiss affiliate that show it was helping terrorists, genocidal leaders, the most violent drug gangs, and tens of thousands of wealthy people evade taxes.  Lynch failed to bring that case or use any of the invaluable data provided by the whistleblower who copied the files from the Swiss bank.

Prof. Black says that Lynch is very likely to continue the policies of Eric Holder and not undertake criminal prosecution of high-ranking bank officials when their institutions commit illegal acts.  He has repeatedly maintained that to stop bank fraud you must jail bankers who manage fraudulent enterprises.  He concludes the current review of Loretta Lynch thusly:

There can be no more incriminating indictment of the Nation’s leading federal prosecutors than the fact that even the sycophantic DealBook admits that on Holder and Lynch’s watch a “pattern” of recurrent frauds by our most elite CEOs has emerged – and those frauds commonly involve profiting from the banks aiding the funding of mass murderers.  The administration has managed to turn into reality all those bad novels they sell in airport book stores that describe networks of criminal elite bankers financing terrorists, drug gangs, and venal and brutal kleptocrats with impunity from the laws.

For those who think Prof. Black is overreacting, there is a related story in The Guardian: HSBC is ‘cast-iron certain’ to breach banking rules again, executive admits.

Lynch is currently (since 2010) the nation’s leading prosecutor of financial crime as the United States Attorney for the Eastern District of New York.  She also held this position 1999-2001.

Loretta Lynch is also opposed by many Republicans, but not because she is too cozy with banks.  Among their points of opposition is their expectation she will support the Obama administration immigration policy.

Disclosure: William K. Black contributes content to GEI.  The article with his accusations can be read at GEI Opinion.

John Lounsbury

Sources:

• HSBC Violates its Sweetheart Deal and Lynch Praises It (William K. Black, New Economic Perspectives)

• William K. Black, Faculty Directory (University of Missouri – Kansas City)

• William K. Black (Wikipedia)

• Loretta Lynch has the votes, now what? (MSNBC, 02 April 2015)

• Loretta Lynch Is Unfit to Serve as Attorney General (National Review, 02 April 2015)