Very early on in it's short life, the members of SME Alliance agreed the phrase “No one is above the law” was a very good motto for our organisation. We didn't pick it randomly and I read it out at our first meeting as a quote from a letter Paul and I received on behalf of Mark Carney, the Governor of the Bank of England last September. The letter said:
“...Your letter also notes a concern that regulators have not acted to penalise relevant individuals in relation to your case, and that bankers are somehow above the law and able to avoid prosecution. This is a view very much not shared by the Bank of England. As the Governor's recent letter to Lord Blackwell made clear there is absolutely no doubt that bankers who are guilty of misconduct should face the regulatory and/or criminal consequences of their actions. No one is above the law.”
Of course no one is going to disagree with this sentiment because it is the basis of a democratic society. I rather unfairly raised the point at our meeting at No 10 last week, that I have never had a reply to my letter of December 2012 to the Prime Minister asking if bankers are above the law? Our host seemed surprised a) I would even ask such a question and b) I received no reply to such an
Which is why yesterday's performance by the bosses of HSBC in front of the Public Accounts Committee, was nothing short of obscene. And while our Government and our politicians may believe no one is above the law, the reality is something completely different. As so many of us have known for a long time now, there are people in the financial sector and corporate world who genuinely believe they are above the law – and because no one in authority challenges this premise, to all intents and purposes, they're right. They are above the law and this is a huge problem.
I say no one challenges them which is, of course, wrong. Bankers are challenged on their conduct but sadly, it seems, the challengers have no authority to follow through on their findings. In recent weeks, months, even years, various Committees including the Treasury Select Committee, Parliamentary Committee on Banking Standards and the Public Accounts Committee, have challenged the conduct of senior bankers on a regular basis. And yesterday's performance by Margaret Hodge when she questioned Stuart Gulliver, Chris Meares and Rona Fairhead of HSBC, will go down in history as one of the strongest performances yet. Right up there with Andrew Tyrie at his best. But where does it get us?
We now know Mr Gulliver had a Swiss bank account with money from who knows where routed through Panama or a Panamanian company, ending up in Switzerland; Mr Meares was sort of responsible for what happened on his watch when he was Group CEO of the Private Banking arm of HSBC, except he isn't responsible for what he didn't (as the boss) actually know was happening and; Rona Fairhead didn't know anything at all about money laundering or tax evasion even although and according to Ms Hodge, she was paid £10,000 a day to know what was going on. But other than the fact they received a severe ear bashing from yesterday's committee and Ms Hodge was taking no prisoners, so there was little chance to explain themselves or retaliate, what difference will that performance make?
None of the above is necessarily illegal but, for example and without doubt, money laundering for Mexican drug cartels seems to be above the law – HSBC was fined huge amounts of money for doing so – but someone was actually responsible for these transactions and, surely, the buck stops with the bosses. Unless of course they are prepared to tell us who, other than the bosses, could make the monumental decision it's a good idea to do business with drug dealers? Similarly, organising Swiss bank accounts for clients so they can evade tax, is against the law but apparently above the law. So the little bit of theatre yesterday, embarrassing though it was for the recipients of Margaret Hodge's quite sharp tongue, was actually a very small price to pay when, in reality, someone or, more likely, several people in HSBC have broken the law - but no one will say who?
I am well aware of many instances where people in the financial sector have broken the law. I am even more aware banks pay a fortune to big law firms to help them flaunt, abuse or get round the law. And very often, if we were to stick to the strict letter of the law, these actions would fall under the collective heading of “obstructing justice” or “perverting the course of justice.” However, I also know (from my own and from the collective experiences of many SME Alliance members) you can take such allegations to the police and they will invariably tell you “it's a civil matter.” It's not. Fraud, corruption, money laundering, theft (asset stripping), are all criminal offences. Sadly they are all offences banks (or rather their shareholders) have paid huge fines for but they rarely if ever result in anyone going to jail.
Unfortunately for Margaret Hodge and despite her fierce performance on the Committee, she also took a bit of a bashing when she was interviewed by Jon Snow on Channel Four news last night. Having established her dissatisfaction with the answers from the HSBC bankers, Jon was quite scathing when he then said:
“... But can you see the frustration that this builds up in the populace when they see what's going on in your Committee and they know nothing can be done about it. Nobody in that Bank will be prosecuted. We know that as an absolute fact. Whatever you find, nobody will be prosecuted.”
Absolutely right Jon. The populace is incredibly frustrated and in our democratic Country where everyone is apparently equal, I believe we have definitely reached the point where some people are more equal than others. Sound familiar? And while Mark Carney and David Cameron are absolutely sure no one is above the law – I'm not convinced. I don't think Jon Snow is convinced and I'm not sure Margaret Hodge is either, although the politician in her stops her saying so. Here's her interview with Jon Snow:
On a more positive note, the members of SME Alliance are 100% sure “no one is above the law” so we're keeping our motto and striving to prove it's true.
Many thanks to my daughter Laura who has given us a photograph (which interestingly she took from the balcony of one of our members) and turned it into a poster for us. SME Alliance – No One Is Above The Law. It would make an even better slogan for any and all political parties!