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 Twitter5Share on Reddit0Share on Facebook3Google+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
emptywheel RT @timkaine: Read my @nytimes op-ed laying out why President Obama must get Congress’s authorization for the fight against ISIL http://t.c…
6hreplyretweetfavorite
emptywheel @p2wy You see how we could have a fun w/this? Don't think @repjustinamash would ever intro new tax but maybe some Dem would? @runtodaylight
6hreplyretweetfavorite
emptywheel @KevinBuist Aren't you assuming the video games we played when we were 12 were actually called that?
6hreplyretweetfavorite
emptywheel @samhusseini Imagine how quickly any NIE would leak this time! That said increasing #s know finally admit all our hammers not worth a damn
6hreplyretweetfavorite
emptywheel @michaelwhitney Was gonna ask how come your football team wasn't best in league w/that then remembered not to jinx Pats @jilliancyork
6hreplyretweetfavorite
emptywheel RT @carolrosenberg: There’s rigid military censorship now. US troops comb through free-press imagery, delete some that were routinely allow…
7hreplyretweetfavorite
emptywheel @chinahand Well, sure. But don't you think they'd miss Edinburgh as a kind of mecca of capitalism?
8hreplyretweetfavorite
emptywheel RT @BiometricsNerd: 93% of FBI NextGen Identification searches are automated, remaining require human-in-the-loop. Amy Hess FBI S&T Branch …
8hreplyretweetfavorite
JimWhiteGNV Having fantasies about that kayak the #Rays just gave Jeter being full of fire ants the first time he hops in...
8hreplyretweetfavorite
emptywheel @billmon1 Cruz just got to the Senate too late: remember when they were hunting AQ defense attys? @DanielLarison @Ali_Gharib
8hreplyretweetfavorite
emptywheel So after we impose 100% tax on Liz Cheney's inheritance and .1% net worth taxes on politico use of "homeland" THEN we can tax DOD contrators
9hreplyretweetfavorite
emptywheel Actually I think these are better taxes to pay for Get-Your-War-On: 1) Liz Cheney's inheritance. All of it 2) Pols using word "homeland"
9hreplyretweetfavorite
August 2012
S M T W T F S
« Jul   Sep »
 1234
567891011
12131415161718
19202122232425
262728293031