In late November of this year, authorities found the body of Maria, a woman in her early 20s, outside an armored van along a mountainous road in northwestern Mexico. In February, Maria Susana Flores Gámez won the 2012 Woman of Sinaloa beauty pageant. She also became involved with the Sinaloa drug Cartel. Maria died in a shootout between the gang and the police in those mountains with a gun in her hand. The gun couldn’t do much to protect her. She was found riddled with bullets because someone had used her body as a human shield.
Maria was the fourth known beauty queen to get involved with Mexican drug traffickers. Javier Valdez, author of Miss Narco, a book about drug cartels and beauty pageants, says that this “recurrent story” seldom ends well. In this world, the beauty queens are “disposable objects, the lowest link in the chain of criminal organizations, the young men recruited as gunmen and the pretty young women who are tossed away in two or three years, or are turned into police or killed.”
Further south, in Colombia, the Norte del Valle Cartel has spent nearly two decades battling DEA, FBI, and the Colombian government’s efforts to dismantle it. In just two of those years it claimed 1,000 lives. This cartel has exported millions of pounds of cocaine to the United States and with its profits has bought safety for its members. Safety doesn’t come cheap. The cartel reportedly gave monthly payments of $160,000 to Attorney General Luis Camilo Osorio; $2 million to a prominent congressman to avoid a criminal’s extradition to the United States; and dozens of other bribes ranging from $12,000 to a police officer to $350,000 to a woman for handling “businesses.”
Together the Sinaloa Cartel, the organization responsible for Maria’s death, and the Norte del Valle Cartel have claimed the lives of thousands of their citizens and sold many others into the sex trade. They have played a role in the massive destabilization of their nations, striking fear into the minds of tens of thousands of innocent people. They have manufactured and distributed millions of pounds of a drug that is marked for its ability to ruin lives. They have sold illegal weapons to thousands of other criminals, who have used those guns to take more lives.
They did all of this with the aid of HSBC, a British bank, on American soil. In case you haven’t already heard, the U.S. Department of Justice has reported that HSBC “willfully failed” to apply money laundering controls to at least $881 million in drug trafficking proceeds, including those from the Sinaloa Cartel and the Norte del Valle Cartel.
This wasn’t just a failure of the system. The investigation revealed that senior HSBC officials were complicit in the illegal activity. They will not go to jail. According to court documents, individuals at HSBC went out of their way to allow the bank to act as a financial clearing house for these criminals. They will not go to jail. Other bank officials at HSBC made a “knowing calculation” that they would rather do business with criminals and “make a profit from those illegal transactions” than fulfill their obligations under U.S. law. They will not go to jail.
Despite the fact that U.S. government officials could have held individuals responsible for these activities, they chose not to make a single arrest in this case. HSBC will pay a record $1.92 billion settlement for its criminal actions, but not a single person will go behind bars.
As I’ve argued before, monetary penalties are often insufficient to deter future criminal behavior, especially among large institutions like HSBC. The fine might seem like a lot of money, but to this bank, it’s really not. As of June HSBC had assets of $2.6 trillion. As NPR notes, “that’s like fining somebody with a net worth of $3 million about $2,000.” Jimmy Gurule, law professor at the University of Notre Dame, replied that the settlement “makes a mockery of the criminal justice system.” He notes that the only way bank officials are going to take their obligations serious to prevent money laundering is if “a bank official or bank officials are indicted, prosecuted and sent to jail.”
I started this post out with Maria’s story because I want to talk about specific implications of our failure to put these people behind bars. It means officials at other banks will continue to turn the other way (or even outright defy the law) with regard to the proceeds of crime from groups like the Sinaloa Cartel. It means that groups like the Norte del Valle Cartel will still have a place to send their money and will continue to pay off corrupt officials to keep quiet. It means the violence in Mexico and Columbia will go unhindered, resulting in more deaths, more insecurity, and more destabilization. And it means criminals in Mexico will continue to use their money to buy guns and affections of girls like Maria.
Some of those girls will die, their bodies riddled with bullets, while these bankers sleep soundly in their beds tonight.
Disclaimer: Unless specifically stated to be the views of the Task Force, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Task Force on Financial Integrity & Economic Development.