By “Cooperative Investigations” Does WSJ Mean “Protection Money”?

The WSJ has a funny response to the Standard Chartered Bank settlement. Aside from the predictable claims that Benjamin Lawsky, the NY Superintendent of Financial Services, played hardball to advance his political career, it suggests Lawsky upset a system of “cooperative investigations” that NYC’s District Attorney has in place.

These columns have long supported tough enforcement of Iran sanctions, including efforts by the Manhattan District Attorney and U.S. Treasury against foreign banks. The D.A.’s office has sanctioned four banks in recent years, extracting $1.8 billion in settlements and defining new standards of behavior.

Other cooperative investigations have long been underway, and Mr. Lawsky’s main contribution seems to have been to jump the queue so he could get a big publicity score. He told the D.A.’s office he was going public the night before his announcement and he only told the feds on the same day.

This seems to be the central pique of the editorial. Lawsky “jumped the queue,” which sounds an awful like a queue of regulators in line to get payouts from banks so they can look the other way from money laundering. Is that the problem here? Lawsky violated the DA’s turf, and took what the DA believed was his office’s rightful payment, and oh by the way also exposed the underlying Get Out of Jail Free industry that seems to be the service for which the DA and other regulators have gotten these payments in the past?

Are all the attacks on Lawsky about him taking fines that other regulators had planned on receiving? About money going to NY state, rather than NYC?

Mind you, to paint this as a “cooperative investigation,” the WSJ has to ignore several facts.

  • SCB did not, as WSJ claims, rat itself out to regulators in 2010. On the contrary, in early 2009, law enforcement authorities came to it.
  • Much of the underlying fraud (which WSJ seems to believe is not illegal) happened at a time when SCB was operating under a Written Agreement mandating certain behaviors because of past money laundering violations. Indeed, SCB lied to regulators about its Iranian transactions to get the Written Agreement lifted in 2006.
  • SCB has moved all its Office of Foreign Asset Controls compliance to Chennai and–as with its past efforts to evade regulations–the Chennai office does not communicate on these issues with the NY office. Moreover, SCB’s process still seems to allow for the same methods to process transactions of sanctioned individuals.

Of course, had WSJ admitted to these facts, it would have had to acknowledge that the “new standards of behavior” the DA’s office has put in place includes ongoing efforts to evade money laundering laws.

Tweet about this on Twitter0Share on Reddit0Share on Facebook0Google+0Email to someone

9 Responses to By “Cooperative Investigations” Does WSJ Mean “Protection Money”?

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
Emptywheel Twitterverse
JimWhiteGNV RT @lrozen: Ron Klain should read this. 3 hours passed. No one in charge. http://t.co/Pbg7bDaVJy
6mreplyretweetfavorite
JimWhiteGNV RT @lrozen: "Eight police cars escorted me to the University Hospital in Newark. Sirens blared, lights flashed." http://t.co/Pbg7bDaVJy #in
7mreplyretweetfavorite
bmaz @SarebrumSarah Trust me, the dog does not lead an overly taxing life....
9mreplyretweetfavorite
bmaz @StephanieKelton @pkelton Also, sadly, young son may have the makings of a lawyer. This is not necessarily a good thing understand you.
12mreplyretweetfavorite
bmaz @SarebrumSarah Samoyed. And they are the greatest.
15mreplyretweetfavorite
bmaz @StephanieKelton @pkelton This is important advice from a trusted school counselor!!
15mreplyretweetfavorite
bmaz @natnicol I know! I am not the holdup. My wife remembers the hell the puppies cause for the first year and half or so. I forget....
21mreplyretweetfavorite
bmaz @StephanieKelton @pkelton Whoa! Really??
25mreplyretweetfavorite
bmaz @natnicol When are truly babies, they're lie a cotton ball w/dots on each end. Hyperactive White Tribbles from Star Trek. Truly hilarious.
25mreplyretweetfavorite
bmaz @StephanieKelton @pkelton the things we do for love, etc. But, this is exactly why y'all need a nice fluffy samoyed!
30mreplyretweetfavorite
bmaz @StephanieKelton ..all things Samoyed and canine now. Girls rule this world. You just need to help @pkelton understand the facts of life.
33mreplyretweetfavorite
bmaz @StephanieKelton @pkelton Had my first Samoyed when I met my wife. Pretty sure she married the dog, Kayla, and not me. That said, she owns..
34mreplyretweetfavorite
August 2012
S M T W T F S
« Jul   Sep »
 1234
567891011
12131415161718
19202122232425
262728293031