Eric Holder’s Longtime Excuse for Not Prosecuting Banks Just Crashed and Burned

(Holder) told the panel: “The question you need to ask yourself is, if we could have made those cases, do you think we would not have? Do you think that these very aggressive U.S. Attorneys I was proud to serve with would have not brought these cases if they had the ability?” The report — the result of a three-year investigation — shows that aggressive attorneys did want to prosecute HSBC, but Holder overruled them.

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Newly public internal Treasury Department records show that AFMLS Chief Jennifer Shasky wanted to seek a guilty plea for violations of the Bank Secrecy Act. “DoJ is mulling over the ramifications that could flow from such an approach and plans to finalize its decision this week,” reads an email from September 4, 2012 to senior Treasury officials. On September 7, Treasury official Dennis Wood describes the AFMLS decision as an “internal recommendation to ask the bank [to] plead guilty.” It was a “bombshell,” Wood wrote, because of “the implications of a criminal plea” and “the sheer amount of the proposed fines and forfeitures.”

But after British financial minister George Osborne complained to the Federal Reserve chairman and the Treasury Secretary that DOJ was unfairly targeting a British bank, senior Justice Department leadership reportedly sought to “better understand the collateral consequences of a conviction/plea before taking such a dramatic step.”

According to internal documents, DOJ then went dark for nearly two months, refusing to participate in interagency calls about HSBC. Finally, Holder presented HSBC on November 7 with a “take it or leave it” offer of a deferred prosecution agreement, which would involve a cash settlement and future monitoring of HSBC. No guilty plea was required.