Two U.S. senators said a Department of Justice response to their criticism that it didn’t criminally prosecute HSBC Holdings Plc (HSBA) for money laundering was “aggressively evasive.”
Senators Sherrod Brown, an Ohio Democrat, and Chuck Grassley, a Republican from Iowa, sent the Justice Department a letter on Jan. 29 asking whether the federal government avoids prosecuting banks that they described as “too big to jail.”
Judith C. Appelbaum, principal deputy assistant attorney general, defended what she called the department’s “vigorous enforcement against wrongdoing” in a letter to Brown dated Feb. 27. Federal prosecutors have to follow internal rules to assess whether to pursue a criminal case, and they are willing to do so against a corporation of any size, she wrote.
The Justice Department’s response was “aggressively evasive,” Brown and Grassley said in a statement yesterday. “We’ve conveyed our dissatisfaction, so the Justice Department is aware that it still owes us a complete response.”
The Justice Department can get concessions from a settlement that a trial couldn’t achieve, including a requirement that a company cooperate with a continuing criminal investigation, according to the letter.
In deciding whether to take a case to trial, prosecutors also have to weigh fallout on “others who were not personally culpable,” including impact on the public.
“No corporate entity, no matter how large, is immune from prosecution,” Appelbaum said in the letter to Brown. She also said the Justice Department “has not hesitated to criminally prosecute major corporations and top executives when we have the evidence, no matter what the crime.”
London-based HSBC, Europe’s biggest bank, settled a probe led by the Justice Department and banking regulators by paying a $1.9 billion fine and agreeing to fix flaws in their money- laundering controls. The company’s 2012 pretax profit will be $23.5 billion when it reports earnings on March 4, according to the median estimate of 26 analysts surveyed by Bloomberg.
“Functionally, HSBC has quite literally purchased a get- out-of-jail-free card for its employees for the price of $1.92 billion,” Grassley said in a Dec. 13 letter to Attorney General Eric Holder.
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