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By MICHAEL POWELL
To sit on the bench in Manhattan Criminal Court is to feel the embarrassment that comes with watching fellow New Yorkers get deeply humbled.
A bailiff calls out names and charges: disorderly conduct, possession of marijuana, violating a park curfew. Men and women shuffle forward, heads hung low, and listen as a prosecutor offers more or less the same deal — whatever time they have already served in a sweaty lockup and a fine.
The judge poses a final question to each defendant: Do you acknowledge guilt?
Do you?
An hour passes, and I hanker for a more ambitious, not to mention less repentant, class of wrongdoer. Enough with the teenage mother who smoked a joint, the jewelry salesman who loitered past midnight in a park or the multiply pierced young woman who stole a ham to pay for a heroin fix.
I board the No. 4 train and ride north to a gorgeous Beaux-Arts building with a mansard roof on the corner of 40th Street and Fifth Avenue. This is the American headquarters for HSBC.
It’s a splendidly large bank, with $2.5 trillion in global assets, 300,000 employees and a 2011 profit of about $22 billion. It is one of our city’s prominent corporate citizens, contributing to museums and charitable groups.
It also let Mexican drug cartels launder money on a grand scale, according to a Senate report, and it evaded laws intended to stop banks from doing business with Iran and North Korea. Perhaps most astonishing, the report said it had conducted business for many years with Al Rajhi, a bank in Saudi Arabia whose founder was an Al Qaeda benefactor.
All of this is detailed in the report, 335 pages long, issued a few weeks ago by Senator Carl Levin. It reads like a racketeering indictment of the Genovese crime family, replete with evidence that senior officials knew the contours of the game.
“This is a global bank that failed to comply with rules aimed at combating terrorism, drug trafficking and the money laundering that fuels so much of what threatens the global community,” Mr. Levin said.
The financial industry in 2012 New York City offers itself as almost a Medellín cartel of shady and unscrupulous dealings.
Northeast of HSBC’s headquarters sits that of Barclays, a venerable bank that of late admitted to fixing Libor, an obscure interest rate that underpins trillions of dollars in investments. A wee nudge here and there, and a clever bank insider could make tens of millions of dollars. If such corruptions result in New York City’s paying a million dollars more to build a block of low-income housing, que sera sera and all that.
Barclays quickly cut its losses, settling for $450 million and the resignation of a senior official or three. As a public defender in Manhattan Criminal Court would tell you, it’s always good to get out ahead of trouble.
Morgan Stanley analysts — in a recent internal summary — sounded admiring: Barclays paid a smaller fine because “the firm was early and cooperative with regulators.”
Now other banks are rolling on each other, eager to pay whatever hundreds of millions of dollars in fines are needed to get back to business as usual. UBS, on 52nd Street and Avenue of the Americas, has turned over e-mails and documents implicating Deutsche Bank (60 Wall Street), Royal Bank of Scotland (on East 40th Street) and HSBC.
UBS is a repeat offender. In a less fashionable venue, it might face a stiff sentence. In recent years, it conspired to defraud the United States by creating 17,000 secret Swiss accounts for Americans who wanted to commit tax fraud. Two of its top officials, including the bank’s global general counsel, settled insider trading charges a few years back.
New York barred that counsel, David D. Aufhauser, from practicing law in the state for two years. No worries. About a year later, he became a partner in Washington for Williams & Connolly, specializing in financial services.
A jog to the east finds Wells Fargo, whose executives are prominent players in this city’s gilded social circuit. Last month, it agreed to pay at least $175 million because brokers who originated its loans consistently charged higher fees and interest rates to black and Hispanic borrowers than to white borrowers with similar credit histories.
A former employee described to me the bank’s habit of systematically targeting blacks and Latinos for the worst loans. The bank was, this employee said, “riding the stagecoach from hell.”
Wells Fargo, of course, admitted no guilt. When do they ever? A few months ago, Jamie Dimon of JPMorgan Chase acknowledged mistakes in losing a few, maybe 10, billion dollars in badly supervised trades. As for HSBC, the bank of choice for so many money launderers? Irene Dorner, chief executive of the United States operation, told a Senate committee, “We have some ways to go to regain the trust of regulators and the public.”
Actual guilt is the province of those unfortunates who sat jammed in serried rows in Manhattan Criminal Court. Here, almost everyone admits guilt — or risks trial.
“I was in the park next to my building at 12:15, so they arrested me for loitering,” said a man named Francisco. “It’s nonsense. But I’ve got a job — what am I supposed to do, take off more days and have a trial?
“Easier to say guilty, you know?”
Not for the men and women in the city’s executive suites.
E-mail: powellm@nytimes.com
Twitter: @powellnyt
To sit on the bench in Manhattan Criminal Court is to feel the embarrassment that comes with watching fellow New Yorkers get deeply humbled.
A bailiff calls out names and charges: disorderly conduct, possession of marijuana, violating a park curfew. Men and women shuffle forward, heads hung low, and listen as a prosecutor offers more or less the same deal — whatever time they have already served in a sweaty lockup and a fine.
The judge poses a final question to each defendant: Do you acknowledge guilt?
Do you?
An hour passes, and I hanker for a more ambitious, not to mention less repentant, class of wrongdoer. Enough with the teenage mother who smoked a joint, the jewelry salesman who loitered past midnight in a park or the multiply pierced young woman who stole a ham to pay for a heroin fix.
I board the No. 4 train and ride north to a gorgeous Beaux-Arts building with a mansard roof on the corner of 40th Street and Fifth Avenue. This is the American headquarters for HSBC.
It’s a splendidly large bank, with $2.5 trillion in global assets, 300,000 employees and a 2011 profit of about $22 billion. It is one of our city’s prominent corporate citizens, contributing to museums and charitable groups.
It also let Mexican drug cartels launder money on a grand scale, according to a Senate report, and it evaded laws intended to stop banks from doing business with Iran and North Korea. Perhaps most astonishing, the report said it had conducted business for many years with Al Rajhi, a bank in Saudi Arabia whose founder was an Al Qaeda benefactor.
All of this is detailed in the report, 335 pages long, issued a few weeks ago by Senator Carl Levin. It reads like a racketeering indictment of the Genovese crime family, replete with evidence that senior officials knew the contours of the game.
“This is a global bank that failed to comply with rules aimed at combating terrorism, drug trafficking and the money laundering that fuels so much of what threatens the global community,” Mr. Levin said.
The financial industry in 2012 New York City offers itself as almost a Medellín cartel of shady and unscrupulous dealings.
Northeast of HSBC’s headquarters sits that of Barclays, a venerable bank that of late admitted to fixing Libor, an obscure interest rate that underpins trillions of dollars in investments. A wee nudge here and there, and a clever bank insider could make tens of millions of dollars. If such corruptions result in New York City’s paying a million dollars more to build a block of low-income housing, que sera sera and all that.
Barclays quickly cut its losses, settling for $450 million and the resignation of a senior official or three. As a public defender in Manhattan Criminal Court would tell you, it’s always good to get out ahead of trouble.
Morgan Stanley analysts — in a recent internal summary — sounded admiring: Barclays paid a smaller fine because “the firm was early and cooperative with regulators.”
Now other banks are rolling on each other, eager to pay whatever hundreds of millions of dollars in fines are needed to get back to business as usual. UBS, on 52nd Street and Avenue of the Americas, has turned over e-mails and documents implicating Deutsche Bank (60 Wall Street), Royal Bank of Scotland (on East 40th Street) and HSBC.
UBS is a repeat offender. In a less fashionable venue, it might face a stiff sentence. In recent years, it conspired to defraud the United States by creating 17,000 secret Swiss accounts for Americans who wanted to commit tax fraud. Two of its top officials, including the bank’s global general counsel, settled insider trading charges a few years back.
New York barred that counsel, David D. Aufhauser, from practicing law in the state for two years. No worries. About a year later, he became a partner in Washington for Williams & Connolly, specializing in financial services.
A jog to the east finds Wells Fargo, whose executives are prominent players in this city’s gilded social circuit. Last month, it agreed to pay at least $175 million because brokers who originated its loans consistently charged higher fees and interest rates to black and Hispanic borrowers than to white borrowers with similar credit histories.
A former employee described to me the bank’s habit of systematically targeting blacks and Latinos for the worst loans. The bank was, this employee said, “riding the stagecoach from hell.”
Wells Fargo, of course, admitted no guilt. When do they ever? A few months ago, Jamie Dimon of JPMorgan Chase acknowledged mistakes in losing a few, maybe 10, billion dollars in badly supervised trades. As for HSBC, the bank of choice for so many money launderers? Irene Dorner, chief executive of the United States operation, told a Senate committee, “We have some ways to go to regain the trust of regulators and the public.”
Actual guilt is the province of those unfortunates who sat jammed in serried rows in Manhattan Criminal Court. Here, almost everyone admits guilt — or risks trial.
“I was in the park next to my building at 12:15, so they arrested me for loitering,” said a man named Francisco. “It’s nonsense. But I’ve got a job — what am I supposed to do, take off more days and have a trial?
“Easier to say guilty, you know?”
Not for the men and women in the city’s executive suites.
E-mail: powellm@nytimes.com
Twitter: @powellnyt
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