Jul 19 2012
The Senate inquiry found lax HSBC controls let Mexican drug barons launder cash through the bank’s US operations
A Tory minister was at the helm of a bank accused today of allowing money laundering by drug cartels and potential terrorists.
HSBC shifted £4.5billion in suspicious funds from Mexico, where drug trafficking is rife, and billions more from countries such as Iran, Syria and Russia, a scathing US Senate report said.
Lord Green was HSBC group executive chairman at the time the shadowy transactions took place, before he was made Trade Minister by PM David Cameron.
The Senate inquiry found lax HSBC controls let Mexican drug barons launder cash through the bank’s US operations.
It also claimed the bank provided services to lenders in Saudi Arabia and Bangladesh believed to have helped fund al-Qaeda and other terror groups.
Senator Carl Levin, leading a probe into £9.6billion in HSBC dealings from 2006 to 2010, said: “The culture at HSBC was pervasively polluted for a long time.
“In the age of international terrorism, drug violence in our streets and on our borders, and organised crime, stopping illicit money flows that support those atrocities is a national security imperative.”
Lord Green was executive chairman from 2006 to 2010, when he was made a life peer so he could join the Government. Previously, he was HSBC group chief executive from 2003.
HSBC’s head of group compliance David Bagley stepped down at the Senate hearing.
The report said HSBC ignored warnings from US authorities about doing business in countries such as Mexico.
Between 2007 and 2008, HSBC’s Mexican arm moved £4.5billion into the US operations, the report said.
It also said the bank moved money from Syria and Russia – and Iran in a possible violation of the US ban on transactions with the rogue state.
HSBC chief executive Stuart Gulliver admitted: “It is right that we will be held accountable and that we take responsibility for fixing what went wrong.”
Labour MP John Mann said Lord Green should not have been made a minister.
He declared: “Someone whose bank has been assisting drug cartels and corrupt regimes should not be in charge of a government portfolio.
“Once again, David Cameron’s judgement is suspect.”
Lord Green’s spokesman said: “We are waiting to see what HSBC is saying and will see if there’s anything we can add.”
Downing Street refused to comment on whether the PM knew of the laundering allegations before appointing him.