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Mehdi Hasan

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How Long Can the Ex-Boss of HSBC Survive as a Minister?

Posted: 18/07/2012 10:52

Place your bets, please. How long can Stephen Green survive as a minister?

"Stephen who?" I hear you cry. Stephen Green, or Baron Green of Hurstpierpoint, is a former chief executive and executive chairman of HSBC, and... wait for it... minister of state in the Department for Business, Innovation and Skills. He was ennobled by David Cameron and appointed to government as a trade minister in January 2011; he was even asked to sit on the cabinet's committee on banking reform.

But in a sensational report released yesterday, a committee of US senators accused HSBC subsidiaries of facilitating a multi-billion-dollar money-laundering operation for "drug kingpins and rogue nations". Britain's biggest bank, it concluded, was "pervasively polluted for a long time".

So what is the former head of this "pervasively polluted" institution, linked to money-laundering, doing in government? Backbench Labour MP John Mann, who sits on the Treasury Select Committee, has called on Green to quit: "Someone whose bank has been assisting drug cartels and corrupt regimes should not be in charge of a government portfolio."

The Labour high command, however, has yet to endorse Mann's resignation call. "Stephen Green... now has serious questions to answer," is all shadow Treasury minister Chris Leslie would say.

Indeed. Here are a few: did Green have any inkling of what was going on inside HSBC's Mexico division? Did he see the warning from one bank executive there that HSBC was "rubber-stamping unacceptable risks"? Was he aware that Mexican drug lords were buying planes with money laundered through the bank's Cayman Islands accounts?

If he knew, he was complicit; if he didn't know, he was negligent. Remember: the period in which Green was in charge of HSBC (as chief executive from 2003 to 2006 and as executive chairman from 2006 to 2010) coincides with the 2004-2010 period in which US senators allege the offences occurred.

Green, however, has his defenders. "He's a good guy, people like him," says a source who has had dealings with him in the City. "He's not like Bob Diamond."

An ordained Anglican priest and the author of a book on ethical capitalism, the former HSBC chairman has been described as "the epitome of the sensible banker".

Maybe. But what HSBC's various subsidiaries are alleged to have been doing on his watch as chairman was far from "sensible". There is now talk of criminal proceedings, as well as a rumoured $1bn fine for the bank.

So far, the Tory peer and priest has the backing of the PM. A Downing Street spokesman told The Huffington Post this morning: "This is a matter for HSBC... it's not something we're going to give a running commentary on."

Really? Can a minister in government, responsible for sensitive trade and investment issues, just shrug off accusations of involvement in a global financial, and potentially criminal, scandal? How long can Downing Street's "we're not going to give a running commentary" line hold?

 

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