Matt Stoller: A Grand Unified Theory of Terribleness: Money Laundering by Banks, Terrorism, Genocide, and Tax Cuts

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) 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?

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About David Dayen

David is a contributing writer to He has been writing about politics since 2004. He spent three years writing for the FireDogLake News Desk; he’s also written for The New Republic, The American Prospect, The Guardian (UK), The Huffington Post, The Washington Monthly, Alternet, Democracy Journal and Pacific Standard, as well as multiple well-trafficked progressive blogs and websites. His has been a guest on MSNBC, CNN, Aljazeera, Russia Today, NPR, Pacifica Radio and Air America Radio. He has contributed to two anthology books, one about the Wisconsin labor uprising and another on the fight against the Stop Online Piracy Act in Congress. Prior to writing about politics he worked for two decades as a television producer and editor. You can follow him on Twitter at @ddayen.


    1. OpenThePodBayDoorsHAL

      Last time bankers got caught this red-handed with their hands in the till, the $200B S&L crisis, there were more than 1,000 white collar execs sent to jail. Enough said. Lawsky can kiss my ass with his self-righteous gum flapping (and his Bitcoin rules, much worse than any other form of money must meet).

  1. rusti

    Surely Andrew Cuomo doesn’t want a state addicted to money based on selling the right to commit crimes. Does he?

    Maybe this is splitting hairs, but I wouldn’t frame things in this manner. This sounds like it’s setting the stage for an austerity argument about how “bleeding the beast” is the right medicine, which is ironic in an article advocating for prosecution of individuals for criminality and corruption.

  2. R Foreman

    It’s the revolving influence doorway. The politicians enable the bankers to steal, and part of the loot goes to paying back to the politicians. The payback is part of the cost of doing business, not an actual punitive fee or deterrent.

    I would bet anything that the highest ranking political figures know about every single fraudulent deal involving big banks or corporations, and instead of stopping it they’re just figuring out ways to funnel the money. That’s means Obama, Reid, Boehner, Pelosi, etc, are all in the loop.

    You remember how NYAG Schneiderman turned so quickly after his little ‘talk’ with Obama? Before the meeting he had the banks by the short-hairs.. after the meeting the state AGs seemed to have thrown their case. That’s what I’m talking about.

  3. Nikki Turner

    Clearly US politicians, like their British counterparts, have utter contempt for the electorate. Having caused austerity for the masses with their reckless behaviour and having then continued to break the law, the public must now accept shareholders are paying these massive fines while criminal bankers continue to get their bonuses. Why do we vote? Shame on politicians both side of the pond. If you are going to let bankers run our countries, at least be honest and let us vote directly for the best (of the worst) bankers. May as well cut out the middle men.

    1. beene

      Why do we vote?

      Perhaps the answer is to eliminate the party that keeps pushing the right further right; till the Rubinite part of the left no longer exist.

      1. hunkerdown

        First of all, liberalism is a right-wing ideology; libertinism is just a convenient near-homonym, the sizzle to mask that there is no steak. What FDR was selling was a modest welfare state to sweeten the hard tack, and especially the American people now believe the the treacle, not the hard tack, is what defines liberalism.

        Kindly do not ever again make the mistake of calling the Democratic Party or anything about it “the left”. Thanks.

      2. hunkerdown

        Second, what do you really think is going to happen once you’ve eliminated the competition? Haven’t you seen what’s happened in the West once Soviet Communism was no longer viable (in large part due to dirty tricks on the part of that same West)? What always happens when there is no alternative? Quality goes down, prices go up, policies get worse.

        Third, the fact that you are even rooting for any oligarchs reveals you as a loathsome and pathetic human being and no leftist at all. You might be happier with the neoreactionaries if you can get past the tribal prejudice and talk policy instead of the language of bourgeois jihad.

        1. beene

          Sorry, for my lack of skill in framing of answer.

          Still you may want to take a closer look at what happened in FDR’s period. Just a couple of areas to investigate , banking reform, and limitations on corporations.

          1. hunkerdown

            If FDR were a usual result of citizens’ actions, and not merely just another aristocrat doing the bare minimum to save his own class and its privileges from the pitchforks, that might be relevant. Unfortunately, we have gotten very little good public policy or public services since then, and thanks to the “trade agreements” one party seems to love a lot more than others, WE ARE FORBIDDEN TO DO SO NOW.

            Political parties sell us the products they made in their own co-op, take it or leave it (and if I leave it, I must perforce be a horrible person). You are still supporting the co-op and everything else it does by buying, even if you rationalize it by fancying that, if only we promise to buy blue labeled products, the owner you don’t happen to like will leave town and everything will just magically coalesce around the public interest without the Bad Man there. (In fact, what will happen is already happening: policy pushes rightward no matter who’s in control.) On top of that, you are still ratifying the existence and supremacy of a political class, and of a system that has strong, uncorrectable right-wing biases, by voting at all. 1 in 43? The odds of a Blue Messiah are worse than roulette and you want us to fancy we’ll be as lucky as Franka Potente in Lola Rennt? And would we even get a Blue Messiah when at least two Democratic rank-and-flie “social justice” types have admitted in the past month they’d sacrifice a public commons so that their group can join the privileged mainstream? Kraft durch Freude much?

            Now, I ask, why is that Beliebing desirable to anyone but the perps, whose entire existence depends upon the bourgeois lifestyle staying viable enough on TV to cover up their crimes against the public?

  4. Worker-Owner

    As Lawsky put it, “In order to deter future offenses, it is important to remember that banks do not commit misconduct – bankers do.” … and we fine the bank and let the guilty bankers continue doing what they do best? This is deterence?

  5. Jim Haygood

    ‘Countries involved in terrorism and genocide’ = banned transactions from 2004 to 2012 involving Sudan, Iran and Cuba.

    But not, for instance, transactions with the brutal, terror-sponsoring dictatorships of Saudi Arabia and Egypt, or the Israeli regime that’s bombing UN schools in Gaza and building new settlements in the West Bank.

    Don’t drink the Kool-Aid, folks. These are political crimes. The only traditionally-recognized crime that’s occurred here is extortion.

    1. tiger

      You are a clown. The Israeli “regime”??

      And “bombing UN schools” cannot be thrown around out of context. Here is the context for the benefit:

      What a cynical strategy Hamas uses. It’s no surprise, since they care not for their OWN civilians, and others.

      1. Christopher Dale Rogers


        You should be ashamed to come on this website, one dedicated to exposing lies, propaganda and promoting a more humanist approach to life, to write and promote garbage like you have posted here today.

        Being an anti-Zionist and person who stands shoulder to shoulder with the “self hating jews” who you brand all those of your faith who neither support Israel or the genocide its inflicting upon the Palestinians in the Gaza strip, I think you’d be better taking your views elsewhere, unless of course you are a “paid propagandist” by the slaughters themselves.

        Perhaps if you had the decency to inform us of the number of young conscript age Israeli’s who are refusing to fight in wars of genocide and uphold the findings of the Nuremberg Trials, you may earn some respect. Perhaps you’d best be advised to read up on the subject matter by acquitting yourself with Noam Chomsky or Hannah Arendt – or are these two great Jewish voices also verboten in your wonderful apartheid state?

      2. hunkerdown

        3. Clearly differentiate between the Palestinian people and Hamas.
        9. The language of Israel is the language of America: “democracy,” “freedom,” “security,”
        and “peace.”

        1. Christopher Dale Rogers

          Is this by way of a joke, or are you trying to be serious?

          If you are indeed being serious, I suggest you read all posts on this site since its inception in 2006 and then revert back in a few months time, if you then claim that the USA stands for any of the above you have quoted, I’ll publicly “eat my hat”!

          1. hunkerdown

            Oh, no, those are tips from Republican propagandist Frank Luntz’s consulting for The Israel Project, particularly from their Global Language Manual’s first chapter: 26 rules for effective communication/hasbara/splaining. Make yourself a bingo card and join in!

      3. different clue

        And yet how very happy the current Israeli government is to play into Hamas’s hands by eagerly bombing all those civilian facilities which Hamas stores its weapons in. It begins to look as if bombing the Gazan civilians is the point of the excercise, and that any Hamas weapons destroyed as well are just gravy. Questions of genuine morality aside . . . it certainly appears that Israel is giving Hamas a monopoly on possession of the moral image high ground. It raises questions about the basic survival intelligence of Israel that Israel does exactly what Hamas dares Israel to do.
        It looks from here as if Israel is currently flunking its Darwin Finals.

  6. Gerldam

    What actually did the Swiss subsidiary of BNP Parisbas do? They traded petroleum products with countries that were under American embargo, not European embargo. However, because the transactions were in dollars, they were tried in a US jurisdiction.
    Does that really constitute “money laundering”? In the legal sense, maybe. In a layman’s sense, no.

  7. JehSee

    I have other issues to raise that I rarely see when I come across an article on the subject of a bank or banks conducting criminal operations of one sort or another. These articles always begin by taking you through the litany of bullshit that “xyz Bank” criminally directed, participated in, or provided essential support services to. Next is quick brief on how the government has done “xyz”, and have levied some fines and so on. Substantial fines for serious crimes, the exacting hand of government trumpets a job well done. Of course the fines always pale in comparison to the gains the bank/s achieved via the criminal operations for which they were fined. It always works like this, it’s basic math, bank/s multiplied by crime, plus corrupt government, minus public token justice, equals…. *!@#?!* ..the same bullshit it always does.

    I suppose I could be appalled by how trivial the amount of money the bank/s are going to end up paying. But why does it even matter how large or small the fine is? The money is awarded to the government, not to those people, businesses, foreign entities, etc. that were harmed in some way, either directly or indirectly, by the criminal operations conducted by said bank/s. Those who were wronged are not “made whole”, which allegedly is the fundamental objective of “the state” in criminal proceedings, to make victims “whole” again. Sounds like a worthy and reasonable purpose when you hear it or read it in text.

    But what is the value of words without a drop of conviction? Incalculable value for the government I estimate. Weightless verb-age is the standard communication method employed by government when communicating with members of the public it claims to serve. Protocol.

    The public mind needs to correct two fundamental flaws in the underlying math for there to be even a remote expectation of actual and real justice being the norm. The “Corporation” as a legal structure needs to find it’s way into the heap of bad ideas that were given a more than fair opportunity to succeed, but failed nonetheless, generally due to an insufficient amount of logic and/or integrity in it’s constitution. The “corporation” is the invisible shield that redirects the responsibility for the decisions, actions. or conduct of individuals, onto a completely fictional entity that exists in name and mark only. Physical assets such as real estate, structures, and other property are included in the makeup of a “corporation”, and are often the only things of value that can be seized when civilly or criminally liable in a suite. You can’t put a name and logo, or an office building in jail, you can’t take away it;s drivers license, or make it perform fifty hours of community service at the local Good-Will. And you can’t take more assets, stock or capital than the “corporation” has available on it’s books, which often is very little by the time they get into really hot water. The executives, employees, associates and any other agents of the “corporation” aren’t personally liable for what happens while acting for the “corporation”. Stockholders bear zero risk of having their stock confiscated in order to apply the value toward a some substantial fine or a debt incurred by the “corporation”. Executive pay, bonuses, stock options and any valuable property transferred to an employee or executive is untouchable when it becomes part of their personal estate.

    This protection that is afforded to a “corporation” is the selling point for incorporating a business. They don’t hide it because they know that nobody is going to critically think about whether affording people the ability to avoid responsibility for their decisions, especially at the executive and director level, makes any sense, or is likely to produce a positive result in anyway whatsoever.

    And don’t forget that theirs more than one kind of “corporation”. Your local, state and federal governments are all corporations. Churches and religious organizations are “corporations”. Non-profit organizations and charities are corporations too. And though the purposes for which these non-business “corporations” are incorporated to achieve, they all have the same personal responsibility shield baked in.

    That’s a big flaw, and the arguments for and against “corporations” can become very complicated. But if you keep the focus on the basic structure and whether it is in any way a reasonable, sound and logical concept. The second flaw I touched on already, and that being the fundamental purpose for having a “Justice System” that is purposed for correcting crimes.

    The way things run now, you could have a victim of rape, who is suffering from trauma based anxieties, having trouble with employment or a myriad of potential after effects; who did her duty as a human being and reported the crime and completed written statements and testified in court and so on. She is not the person she was, and she isn’t “whole”, or in the same or improved state compared to her state prior to the rape. Next you have the offender, he’s in prison for the next decade, works at a plant that produces paint for a couple dollars an hour, which goes toward his fine and court costs. And finally you have the big winner, the government. How do they win? Guess who gets the credit for putting the rapist behind bars? Yeah, they could of done it without the victims help, but they wanted her to feel like she contributed to the case. They don’t want her to feel like she has been pimped out by the government, as a special kind of prostitution based revenue source. Which is exactly what they have done to her. The rapist is now in prison, and is now a government slave, they rent out his physical labor to various companies for ten dollars an hour, pay him two dollars an hour, which goes to pay off his fine, which should be paid off about the time he gets released. So the government gets ten years of free labor, plus a fine worth a few thousand more. Not bad money for a single piece of ass sold for only one session. Then when you factor in the minimal effort required on their part, because the victim went to the government, she then provides all the necessary information to identify, and safely locate and arrest him, she then provides the only evidence they need to seal the deal and officially put their new slave to work, that being her testimony. All in all, the end results speak for themselves. The rapist/john/rent-a-slave and the victim/surprise-sex-recipient/whore have performed well together, providing an excellent, low cost, and minimal effort, enhanced output – revenue source. Sounds like a WINNER for GUBMENT. JUSTICE SERVED.

    So excuse me if I don’t get all uppity about how much or how little a bank has been “forced” to pay in fines. In fact I would be surprised if a single dollar or virtual accounting unit or whatever garbage their using in digital currency land this week, actually gets transferred from the bank to the government.

  8. Jim Shannon

    The longer the CentaMillionaire$ and Billionaire$ go untaxed the greater the cost for the consumer! Always and everywhere it is the consumer that pays for the corrupting power of personal wealth!

  9. Jay M

    Is the Vance person mentioned the son or grandson of Cyrus Vance? Our optimates at their best work, I guess.

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