GUILTY UNTIL PROVEN INNOCENT: EXTORTION AGAINS STANDARD CHARTERED BANK SHOWS BIAS AGAINST IRAN
Is This Incident A Retaliation Because A Bank Official Made A Disparaging Comment About US Hostility To Iran?
By Danny Schechter
Johannesburg, South Africa: On the surface, it looked like a simple game of "Gotcha," when New York Bank regulators blew the whistle on London's Standard Chartered Bank for laundering money. The fact that the money was allegedly tied to Iran cast a major shadow on the allegations, given the Islamic Republic's "bad guy" image in American policy circles.
Big money was said to be
involved when a NY State regulator, Benjamin Lawsky, considered a publicity
seeking cowboy in banking circles, made the explosive charge that Standard
Chartered bank abetted $250 billion of money-laundering transactions with Iran.
On the surface the case was open and shut and headline-making, even though other federal regulators didn't immediately jump in with guns blazing.
Then, as Reuters reported, it all became even murkier when Britain's Central Bank governor portrayed Lawsky as marching to his own tune, and out of step with federal regulators in Washington. "One regulator, but not the others, has gone public while the investigation is still going on," the Bank of England's Mervyn King said at a news conference in London."
Suddenly, the plot thickened,
even as the media tide carried with it the assumption that the bank was guilty
as sin. With the Regulator calling Standard Chartered a "Rogue Institution,"
its shares began dropping in value. In one morning's trading, on the basis of
accusations in a press release and uncontested legal charges, the bank lost $16
billion after the unproven allegations that US. Sanctions on Iran were violated
hit the presss.
Bank officials initially contested the scale of the transgression indicating that only a small part of its business with Iran was involved, no more than $14 million. Federal regulators also implied that NY State was exaggerating the scale of any potential problem and that Lawsky's language was unnecessarily "strident."
But it is strident language
that gets attention in a media that rarely bothers to investigate issues like
these.
Not mentioned in the first stories was that Standard Chartered had met Lawsky's office months earlier, but nothing was said then about any high crimes and misdemeanors.
That would change when the opportunity for a big media story materialized. Now, Lawsky was treating this case as major violation of national security, saying: "This is a case about Iran, money laundering, and national security," Lawsky said , "We will continue to work closely with our law enforcement partners, both federal and state, in this effort. No bank, big or small, foreign or domestic, is above the law."
Sounds dramatic, doesn't it? But the British were furious because their investigation was not complete, but, whatever the truth, the perception of wrong-doing began killing the banks stock price. An auditing firm accused of fudging the numbers also adamantly denied it.
Bank critics in the US lashed out at the British regulators who criticized a lack of protocol by the NY regulator. Wrote James Kwak on BaselineScenarioo.com, a leading economics blog:
"Standard Chartered almost
certainly conspired to evade U. S. sanctions?* Why are they mad at Benjamin
Lawsky instead of at Standard Chartered? And when you think a violation of
inter-regulator "protocol" is worse than a systematic plan to defraud the U. S.
government and break sanctions against Iran, of all countries--it's hard to
imagine how you could be more captured, without knowing it."
Is this true? How would we know? No Court has agreed with the accusation, and now none will because there has now been a settlement with no admission of guilt,
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