‘Stephen Green … has serious questions to answer about what he knew’ after a US Senate report suggested the bank ‘allowed money laundering by drug cartels and possibly even terrorists’, says Labour. Photograph: Ben Stansall/AFP/Getty Images
The trade minister, Lord Green, has been drawn into the HSBC money laundering scandal after Labour warned that he has “serious questions” to answer about the way the bank laundered money for drug cartels, terrorists and pariah states while he was at the helm.
Green was chief executive of Britain’s biggest bank between 2003 and 2006 and was its chairman until 2010 when he resigned to take up a position in the coalition government.
The bank is still awaiting details of the fine imposed by the US for the offences which cover the period 2004 and 2010. A Senate report has concluded the bank had a “pervasively polluted” culture that allowed subsidiaries to move billions of dollars around the financial system from countries such as Iran and Syria as well moving cash for Mexican drug cartels. Some analysts think the fine could be $1bn (£640m).
During a dramatic session before a Senate committee on Tuesday, HSBC’s head of compliance David Bagley resigned after 10 years in the role and 20 years at the bank.
Chris Leslie, the shadow financial secretary to the Treasury, said on Wednesday: “The US Senate sub-committee’s report, which suggests that HSBC allowed money laundering by drug cartels and possibly even terrorists, is so serious that the bank’s head of compliance has already resigned.
“Stephen Green, who was executive chairman of the bank when this took place and is now a trade minister in David Cameron’s government, now has serious questions to answer about what he knew and when.”
When Green quit as chairman in 2010 he triggered a bitter boardroom row that led to the departure of the then chief executive, Michael Geoghegan, and the promotion of the head of the investment bank Stuart Gulliver to the post.
Green, who is also an advisor to the government on banks, was not immediately available for comment following Leslie’s remarks.
The bank has apologised for the failings and Bagley told senators Carl Levin and Tom Coburn: “HSBC has fallen short of our own expectations and the expectations of our regulators.”
Paul Thurston, currently chief executive of retail banking and wealth management at HSBC, ran the Mexican banking business in 2007 and told senators he was “horrified” by what he found.
Danny Alexander, chief secretary to the Treasury, told the Today programme that the issues stemmed from the past: “This is a reminder of the huge difficulties our banking system got into in the runup to the banking crisis, the culture that existed then that led to all sorts of appalling and irresponsible behaviour from which this country is still suffering.”
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