How Green took specific interest in Bermuda, Mexico & Switzerland
Just when we thought the ethical limbo dancing of the banks couldn’t get any lower, up popped HSBC to agree a ‘no contest’ against charges of money laundering for Mexican drug lords and Iranian bombers. And just when you thought Camerlot surely couldn’t fit another implicated Minister into the frame, up pops Stephen Green – Baron Green of Hurstpierpoint, David Cameron’s Minister of Trade & Investment across both the Business and Foreign Office ministries.
A powerful and influential man in the Conservative Party, but a man with a past as Group CEO of HSBC (2003) and then Chairman of HSBC (2006) before being asked to join the Tory ranks in September 2010.
Green joined HSBC in 1982 and worked his way up the ladder, so he is steeped in the bank’s ‘values’. And as it happens, the Mexican money-laundering of which HSBC stands (effectively) guilty took place on The Baron’s watch between 2004 and 2010. Said Stuart Gulliver, the current CEO, earlier this week, “our anti-money-laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behavior.”
Yes, that’s one way of putting it. Here’s a fascinating quote from Stephen Green – an ordained Church of England priest – on the subject of acceptable behaviour:
“Underlying all these events is a question about the culture and ethics of the industry. It was as if, too often, people had given up asking whether something was the right thing to do, and focused only on whether it was legal and complied with the rules. The industry needs to recover a sense of what is right and suitable as a key impulse for doing business.” (To the Independent, March 2009)
Now I’d imagine that a man of The Baron’s religious fervour would regard ‘right and suitable’ as unlikely to apply to loving up Mexican marching-powder salesmen and self-destroying Islamist headcases. And as the CEO of HSBC, he was getting a shedload of money to ensure (among many other things) that wrong and unsuitable naughtiness did not occur. So he must now surely carry the can for that: harsh, but fair.
However, taking executive moral responsibility isn’t quite as far as this goes. Because during the period in question, the then plain Stephen Green had a specific role as…..a Director of HSBC Mexico S.A.
And given the frequent role of Caribbean destinations when it comes to discreet banking transfers and tax evasion, well, Stephen also gave himself another interest in……The Bank of Bermuda Ltd. In fact, he liked the idea so much, he bought the company. Having been appointed HSBC CEO in July 2003, one of The Baron’s first acts was to acquire Bank of Bermuda (BoB)…for US$1.3 billion. The bank describes itself as ‘spanning 17 of the world’s key financial and offshore centers including Bahrain, Cayman Islands, Cook Islands, Dublin, Guernsey, Hong Kong, Isle of Man, Japan, Jersey, London, Luxembourg, New York, New Zealand, Singapore, South Africa and Switzerland’. Or again, more plainly expressed, BoB is an expert in discreet money movement and tax
Probably the most famous of all these centres of discretion is the last BoB theatre mentioned in that list: Switzerland. And you’ll never guess, but The Baron’s other specific specialism at HSBC was being……Chairman of HSBC Private Banking Holdings (Suisse) S.A.
Analysts Helvea estimate that ‘around 80% of EU sourced money [in private Swiss banks] is not declared to the national tax authorities concerned’. But HSBC Suisse has also had a few brushes with authority there itself.
In the Spring of 2010 (ten months before Green’s Baronetcy came through) account holder information was allegedly stolen by Hervé Falciani, an IT consultant, from HSBC Private Banking Holdings (Suisse). To be more precise, some 24,000 account details were liberated by Falciani and handed over to the authorities. Swiss banking regulators immediately launched a full-on investigation of the bank. The first British tax-evader to be nicked as a result of this (earlier this year) was property developer Michael Shanly, whose fortune is estimated at £132million. He is to pay £469,444 in fines and costs for failing to pay tax on money hidden in a Swiss bank account….which isn’t going to make much of a dent in £132m, is it, really? But that’s not important right now.
The UK Revenue (HMRC these days) in fact gained access via the Swiss authorities to some 15,000 British-held accounts in HSBC’s private Swiss bank. I’m told HMRC are likely to consider prosecution under Code of Practice 9 of around 150 individuals for serious tax fraud.
Now the Prime Minister David Cameron has told us many times that he doesn’t want tax avoiders like Jeremy Hunt in his circle. For some reason, however, Mr Hunt is still in that circle. But I doubt if even Dave can resist the wave of suspicion that will now fall upon Baron Green of Hurstpierpoint. For not only was he in charge and responsible for corporate governance in HSBC’s wicked, wicked years, he also seems to have specifically sought out responsibility for Mexico, Bermuda, and Switzerland….the kind of places that facilitate tax evasion and money laundering. Like what HSBC done, innit?
“The industry has done many things wrong. It is important to remember that many ordinary bankers have always sought to provide good service to their customers; but we must also recognise that there have been too many who have profoundly damaged the industry’s reputation,” Stephen Green told The Times in March 2010. Perhaps this CofE Minister should now practice what he preaches, and resign forthwith. Otherwise Dave will be asking who can rid him of this troublesome priest.
And in other Religious News: WTF is leading Islamist apologist Mohammed Bari doing on the board of Locog?