Lynch’s Confirmation Moves Forward Despite HSBC Scandal
Despite criticism for her decision not to jail the perpetrators of a controversial white-collar crime, the Senate Judiciary Committee approved Loretta Lynch this morning to be the next U.S. attorney general, clearing the way for a full Senate vote.
In a 12-8 vote, Lynch received unanimous support from the nine Democrats on the Judiciary Committee and objection from all but three Republicans—Lindsey Graham of South Carolina, Orrin Hatch of Utah, and Jeff Flake of Arizona.
Those who opposed her nomination primarily did so over concerns that Lynch would defend President Obama’s executive actions on immigration, which would grant up to 5 million illegal immigrants protection from deportation and grant them work permits.
“We shouldn’t confirm anyone who supports the legality of the president’s executive amnesty,” said Sen. Jeff Sessions, R-Ala., a member of the committee who voted no.
But that wasn’t the only reason some Republicans chose to oppose Lynch as Attorney General Eric Holder’s replacement.
Earlier this month, The Daily Signal reported on an investigation into Lynch’s decision while serving as U.S. attorney for the Eastern District of New York to not bring criminal charges against banking giant HSBC for an alleged tax evasion scheme.
The bank also faced accusations that its employees funneled millions of dollars to the Iranian government, Middle Eastern terrorists and Mexican drug cartels.
>>> Read More: Senator to Loretta Lynch: Why Did No One Go to Jail for Laundering Money to Terrorists?
Sen. David Vitter, R-La., a member of the Judiciary Committee, has been leading the probe into her decisions not to jail any HSBC employees for allegedly laundering more than $200 million through its U.S. branches and helping wealthy clients avoid paying taxes.
Headquartered in London, HSBC is one of the world’s largest banking and financial services organizations serving some 51 million customers.
Photo: Joe Giddens/ZUMA Press/Newscom
Instead of criminally prosecuting individuals responsible for the money laundering scandal, Lynch helped negotiate a $1.92 billion dollar settlement with HSBC in December 2012.
As for the tax evasion scheme, nearly five years after the Justice Department became aware of the violation, it is still not publically known whether the government has criminally charged HSBC.
Meanwhile, Swiss prosecutors raided the bank’s Geneva headquarters last week over reports that HSBC’s Swiss bank allowed clients to dodge taxes.
“Ms. Lynch has made it clear that she will not stand up to President Obama’s lawlessness, or even egregious cases of white collar crime like HSBC’s money laundering and tax evasion,” said Vitter today in a prepared statement.
During her confirmation hearing for attorney general last month, Lynch said she has been “very aggressive” in pursuing white-collar crime.
Lynch’s Response to the HSBC Investigation
Earlier this week, Lynch responded to inquires from Vitter about her decision to settle the terrorist case with HSBC—and more importantly—the Justice Department’s decision not to go after the bank for its hand in an alleged tax evasion scheme.
Responding to media reports that HSBC shielded clients from their tax liabilities, Lynch said she “does not recall reviewing or being aware” of such information.
>>> Read More: Senator Raises More Questions Over HSBC Money Laundering Scandal
Vitter alleges that the Justice Department was aware of such allegations “at least as early as April 2010,” which was well before the December 2012 money laundering settlement was reached.
(Photos: Bill Clark/CQ Roll Call/Newscom; Joe Giddens/ZUMA Press/Newscom; Pete Marovich/UPI/Newscom)
“[A]pparently this widely-available information never trickled-down to Ms. Lynch during her negotiations with HSBC for a deferred prosecution agreement,” Vitter said.
Lynch maintains that the settlement with HSBC in the money laundering case—which was negotiated by prosecutors in her former office—does not restrict the Justice Department from pursuing future legal action for the alleged tax evasion scheme.
She would neither confirm nor deny the existence of any pending lawsuit.
“I am not in the position to comment … or even to confirm or deny any particular investigation,” said Lynch in an official response to Vitter’s inquiries. “[B]ut if I am confirmed as Attorney General, I look forward to learning more about the Department’s enforcement efforts in this area.”
The American people “cannot wait for Ms. Lynch’s on-the-job training,” said Vitter in response to her statement, adding:
[T]hey need to know that crimes by banks—no matter how big—will be prosecuted in a timely manner so that their nest eggs are safe and our economy is protected from systemic financial catastrophe. Confirmation of Ms. Lynch would not inspire this much needed confidence.
Lynch said the punishment forced upon HSBC in the money laundering case was “appropriate to address the compliance failures and sanctions violations.”
The terms of the settlement, she said, are “perhaps the most stringent ever imposed on a financial institution,” within the scope the Justice Department was able to pursue.
Loretta Lynch, United States Attorney for the Eastern District of New York, testifies before a Senate Judiciary Committee hearing on her nomination to be U.S. attorney general on Jan. 28, 2015. (Photo: Pete Marovich/UPI/Newscom)
Lynch’s Long Resume
Lynch, if confirmed by the Senate, would be the first African-American woman to be the nation’s top law enforcement official.
Supporters praise Lynch for her role in prosecuting terrorism, civil rights and political corruption over a decorated prosecuting career.
“There is good reason to believe that Ms. Lynch will be more independent than the current attorney general and make strides toward recommitting the department to the rule of law,” said Hatch, a Republican who voted yes this morning.
Hatch said that Lynch’s record “does not include anything sufficient to overcome the presumption in favor of confirmation.”
The Senate is expected to decide Lynch’s fate in the next two weeks, in what is expected to be a contentious vote.
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