Bankers Should Be Held Responsible for their Actions –GFI

August 7, 2012
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON, DC – The allegations levied yesterday by the New York State Department of Financial Services against British banking giant Standard Chartered demonstrate a systemic, widespread pattern of disregard for anti-money laundering policies at one of the world’s biggest banks, according to Global Financial Integrity, a Washington, DC-based research and advocacy organization.

The allegations that Standard Chartered systematically and intentionally stripped information from wire transfers to hide the fact that it was processing U.S. dollar transactions originating from Iran, Libya, Sudan and Burma—in violation of U.S. sanctions—mirror recent charges against international banking giants HSBC and ING and come in the wake of several money laundering lapses at other banks such as Citibank, the former Wachovia bank, and even Standard Chartered, with respect to different violations.

“This is not a problem with one specific bank.  This is a systemic problem affecting the entire international banking community,” said Heather Lowe, legal counsel and director of government affairs at GFI.

July 19, 2012
E.J. Fagan, +1 202 293 0740 x227

WASHINGTON, DC – Global Financial Integrity applauded the Senate Permanent Subcommittee on Investigations today on this week’s hearing, “U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History.” The hearing painted a picture of a bank that chose profit over protection, failing to apply legally mandated anti-money laundering protections to many of its accounts. 

HSBC is just one of several banks to be cited in recent years for lapses in anti-money laundering controls. Two such banks, ING Bank and Wachovia, were sanctioned in recent years for failures remarkably similar to those described by the subcommittee with respect to HSBC. ING was fined last month for violating U.S. sanctions by hiding business it was transacting with Iran, and Wachovia allowed hundreds of billions of dollars from Mexican casas de cambio to pass through its U.S. branches without going through proper anti-money laundering procedures.

At a press conference following the hearing, Heather Lowe, Global Financial Integrity’s director of government affairs, commented on the new information about HSBC presented by the subcommittee, “It demonstrates how systemic the problem is. It would be a mistake to walk away from this hearing with the impression that HSBC is a unique case.”

July 16, 2012
E.J. Fagan, +1 202 293 0740 x227

WASHINGTON, DC – The FACT Coalition will host a joint press conference on Tuesday, July 17th following the Senate Permanent Subcommittee on Investigation’s hearing “U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History.”

Three anti-money laundering experts representing Global Financial Integrity, Global Witness, and special guest Dennis M. Lormel, former Chief of the FBI’s Terrorist Financing Operations Section, Counterterrorism Division, will answer questions that arise from the hearing.

The hearing is expected to expand on the details revealed in the May 3, 2012 Reuters article, “Special Report: Documents allege HSBC money-laundering lapses.” In its report, Reuters referred to documents obtained by a Department of Justice investigation which, “paint a damning portrait of a bank allegedly unable, and unwilling, to police itself or its clients.”

Criminals, Terrorists, Kleptocrats, and Tax Evaders Currently Abusing Anonymous American Corporations to Launder Money, Shield Themselves from Law Enforcement

July 3, 2012
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON, DC – Two recent articles published in The New York Times expose how criminals, terrorists, corrupt foreign politicians, and tax evaders abuse anonymous U.S. shell companies to launder their profits and impede law enforcement investigators, highlighting the need—says Global Financial Integrity (GFI)—for Congress to enact legislation requiring disclosure of the true (human) beneficial owners of corporations, trusts and foundations.

An article published over the weekend on the front-page of The New York Times Sunday Business section, titled “How Delaware Thrives as a Corporate Tax Haven” detailed how the oldest state in the union enables some of the most heinous crimes by allowing arms traffickers, corrupt Washington lobbyists, and drug smugglers, among others, to anonymously shield their activities from law enforcement under the guise of a legitimate U.S. corporation.  While Delaware may be the biggest example, it is not alone.  Nevada, Wyoming and most other states allow varying degrees of anonymity while incorporating.

“Almost two million corporations are formed in the U.S. each year, and the vast majority of those corporations are not required to provide any information—neither names nor addresses—about the true human (beneficial) owners of the firms,” explained Tom Cardamone, managing director of GFI.

GFI ‘Disappointed’ in Indian Newspaper

June 25, 2012
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON, DC – Global Financial Integrity (GFI) today denounced an article published by The Economic Times (ET) late Monday, explaining that the story represented sloppy journalism and was riddled with factual inaccuracies.  Titled “GFI okay with govt's black money fight despite white paper censure,” the article was authored by Binoy Prabhakar, the publication’s news editor.

“The report filed by The Economic Times is riddled with factual errors and takes quotes out-of-context,” said Clark Gascoigne, communications director of GFI.  “It raises a number of questions about the integrity of this ET journalist.”

The story quotes sections out-of-context from the Indian Finance Ministry’s recently-published White Paper on Black Money as evidence to support the article’s thesis that “the white paper was damning on the GFI study.”

Illicit Financial Flows, Corruption Included in Sustainable Development Agenda for the First Time

June 22, 2012
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON D.C. – Global Financial Integrity (GFI), a Washington-based research and advocacy organization, praised the commitments made to address illicit financial flows by leaders in government and business at the United Nations Conference on Sustainable Development, also known as the Rio+20, Conference this week.

This is the first time that the United Nations’ sustainable development agenda has acknowledged the importance of addressing illicit financial flows, which GFI estimates cost the developing world US$1 trillion per year.

The final document stresses that, “fighting corruption and illicit financial flows at both the national and international level is a priority.”

Raymond Baker, director of GFI, reacted to the document, saying, “Our research shows for every one dollar in foreign aid money that flows into developing countries, about ten dollars flows out illicitly. This dynamic is the exact opposite of sustainable. Curtailing these outflows should be a cornerstone of any sustainable development agenda.”