Dave here. Note that BNP Paribas announced a giant quarterly loss yesterday, so at least SOMEBODY suffered for all this. And by somebody, I mean BNP Paribas shareholders. (The same chief executive of the bank who was in charge when the money laundering took place made the announcement, and from a news conference in Paris, not a penitentiary.)
By Matt Stoller, who writes for Salon and has contributed to Politico, Alternet, Salon, The Nation and Reuters. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller. Originally published at Observations on Credit and Surveillance
Major multi-national bank BNP Paribas just pleaded guilty to money-laundering a little less than $200 billion over the course of the last ten years. According to New York Superintendent of Financial Services Benjamin Lawsky, “BNPP employees – with the knowledge of multiple senior executives – engaged in a long-standing scheme that illegally funneled money to countries involved in terrorism and genocide.”
Oh dear, that sounds awful.
So what happened to the employees who did this? 13 of them were fired, including 5 senior executives. According to Lawsky’s office, a total of 45 were disciplined in some way by the bank, with cuts in pay or demotions. 27 employees who would have been fired had already left the bank, so they were untouchable because, wait a second, what about jail time?
What the? Gee, I wonder if there’s a reason, oh, wait, here you go.
Only days before U.S. authorities reached a landmark $8.97 billion settlement with BNP Paribas over the bank’s dealings with countries subject to U.S. sanctions, New York Governor Andrew Cuomo intervened to ensure the state government got a much bigger share of the proceeds, according to three people familiar with the situation…
The state’s general fund was already set to receive $2.24 billion from a state regulator’s piece of the settlement, and the eleventh-hour deal pushed the state’s take up to $3.29 billion. That change was contained in a side agreement signed by Vance on June 29, and a lawyer for Cuomo on June 30.
New York takes in about $60B of tax revenue every year, so this deal is about 5% of that. And whaddayaknow, Cuomo announced roughly that amount of money in tax cuts for businesses and individuals earlier this year.
So basically, the bankers actually bought get out of jail free cards. As Lawsky put it, “In order to deter future offenses, it is important to remember that banks do not commit misconduct – bankers do.”
And increasingly, fines for banker criminal activities are paying for state budgets. Surely Andrew Cuomo doesn’t want a state addicted to money based on selling the right to commit crimes. Does he?