Tuesday, 25 February 2014

Filming Police Is Your Right,Despite Assaults

ku-xlargeAre you allowed to film the police? Well, many federal courts have upheld the right of citizens to record their interactions with police officers from your phone or camera. Also, police officers have no reason to expect any level of privacy when they are performing their daily duties on public spaces and property, meaning you are legally free to record them when you are in public places (or on your property). However, police officers sometimes don’t often take too kindly to being filmed and therefore turning on your camera, alerting them that the exchange is on film, is always going to pose a personal risk.
The most recent anecdote is Brandy Berning, who was assaulted by Broward Sheriff’s Office deputies, Paul Fletcher and William O’Brien, after she mistakenly told Mr Fletcher that she had been recording her interaction with him. Fletcher quickly demanded that she hand over her phone and he threatened her that she was committing a felony (it is not a felony to record your interactions with police officers). To add insult to injury, Berning had initially been pulled over for a traffic violation (driving in the HOV) lane, and Paul Fletcher wasn’t even on duty. Fletcher appeared in court several weeks ago to face numerous charges including burglary, battery and criminal mischief, over his ‘road rage’ incident with Berning. Following his short court appearances, Fletcher was granted a mistrial because Judge Michael Usan was absent after a family emergency and it wasn’t clear when he’d return to the bench.
Seasoned cop-filming activists will suggest that you opt for filming by using an app on your phone that can send the recorded information off-site. An increasing number of cops are resorting to stealing the phones, trying to destroy them or their contents, also, it isn’t uncommon for the “dash cam” videos to disappear as well. One app to use is Bambuster (recommended by Cop Block), which allows you to begin recording a live feed of the event. Another, Police Tape from the ACLU (among others) allows you to secretly record your encounters with the police, while backing up the footage on their serves in New Jersey.
When choosing to film or interact with the police officers, it’s important to remember that if you want to exercise your right to remain silent you are going to clearly communicate that you are invoking your Constitutionally protected right to remain silent. If  the police try to take or steal your phone: that is illegal (although don’t expect them to be punished for it...)You should also ask the officer if you are being arrested, state that you do not consent to any search, and always ask if you are free to leave. It is also adviseable to get them to state their name and badge number, if you have a bad feeling.
It’s important to try to remain courteous when dealing with the police: try to remain calm, smile and don’t swear and complain. It might also help to improve your interaction if you show respect and say things like “sir and no sir.” It isn’t in your best interest to ever bad-mouth a police officer, as things can quickly escalate and we’ve seen what has happened numerous times when individuals have chosen this route. Stay in control of your words, body language and your emotions, this will also help you to think more clearly and communicate your intentions and thoughts more effectively.
There is reason to believe that filming police officers might help to reduce the incidence of corruption and police brutality, is also being explored by numerous police departments who are opting to outfit their officers with mini-cameras which film their daily activities and send the feedback, those who have implemented such a strategy have seen at least a 60% reduction in the use of force and complaints of police brutality.

Sunday, 23 February 2014

The Art Of and The Dangers of Food Preservation

When people buy food these days it is either already precooked, or is waiting in some form of packaging. Nearly all of this food has gone through some process of preservation to keep decomposition at bay, some of these methods have risen concern of possible dangers to human health. Modern food preservation techniques have become a massive operation as society continuously grows to more immense sizes and, just like any other forms of modern production, methods of reducing cost and increasing efficiency are discovered and utilized at the expense of health.
Since 12,000 BC this has proven a very important technology to help a society last throughout unfortunate times of drought, unseasonable weather, seasonal differences and varieties of crop failure. There are many different ways to perform this task that are better for us, but are not well suited for monstrous amounts of food. For those who like to buy fresh food or grow their own, this article will help in understanding preservation methods and discuss the dangers of certain types of modern food additives.
Preserving Food
Freezing, fermenting, pickling, curing, canning, drying and/or dehydrating and jam and/or jelly are simple and safe methods that we will cover. It’s very important to note that for each type of food a different preservation method is required, while some foods may be excellent to can or jam, others are better to freeze or dry. Conversely, some foods are not meant to be preserved as others are and can be of great detriment, always use methods and recipes that have already been tested.
Don’t take chances with the food you prepare for you and your family. Use only tested recipes that have been scientifically determined to be safe.
Food Safety and Preservation
Note to readers: This guide is deceptively packed with a lot of information and if you plan on preserving foods then you may want to bookmark it, click the links any time you want to learn more about something.
Dehydrating, Freezing Food, Canning, Jams and Jellies
These are four of the most commonly practiced food preservation methods, prompting a search will usually bring you to websites which explain all four methods in great depth.
dehydratedfoodDehydrating, or drying, is the oldest method of food preservation known to man. Today this is done with dehydrator boxes which have screen panels inside of them to place fruits and vegetables on, or a small hot building to hang herbs or dry meat jerky. This is the most simple way to dehydrate foods, a nice innovative sustainable method is by solar dehydrators which use passive solar collectors that were originally designed to heat homes. Basics on Dehydrating Food
220px-BlanchingIf you are using the internet to read this then it is very likely that you have frozen food at some point in your life, you’re probably wondering “what more could I possibly learn about freezing foods?”. You’re in for a surprise, most fresh vegetables must go through a preparation process called blanching which involves scalding them in steam or boiling water! Even freezing meats or prepared meals has recommended processes which gaurantee the safety and longevity of your food, there are even recipes to learn about.
819331_435013839902210_970414538_oCanning is a very popular method of food preservation and food storage, this can be, and commonly is, used to store foods that have been dehydrated, turned to jam, fermented and pickled! Thus the process of canning is actually to preserve and/or to store already processed food in an airtight container. Mason jars are glass containers used for canning, the Ball Canning Company is one of the most popular and long lasting companies that make them, another great company is Tattler, which makes reusable canning lids. This is the epitome of safe food preservation, but as previously mentioned it is very important to follow already tested recipes for the safety of those who will eat it. “How Do I? …Can” and Simply Canning are excellent guides to get you started.
jams-and-jelliesJams and Jellies are made from a wide assortment of fruits and there are many blogs across the internet giving people personal tips. Jellies, jams, preserves, conserves and marmalades are made by cooking fruit juice with sugar and each have their own unique methods and amazing flavors to choose from. This method of food preservation shouldn’t be taken lightly or overlooked, there are actually a lot of different fruits to preserve!
Pickling and Fermenting
Fermentation is the controlled decay of material using special bacteria which results in a more desirable product. Technically, fermentation is the biochemical conversion of sugars, starches, or carbohydrates, into alcohol, and organic acids, by bacteria and enzymes.[1] We have symbiotic relations with some forms of bacteria, we give them what they need (carbohydrates), they give us what we need (preserving acids). The bacteria change foods into more digestible and nutritional material.
How Fermentation Techniques Preserve Food
lactobacillus is a common beneficial fermentation bacteria
Lactobacillus is a common beneficial fermentation bacteria used in a food preservation technique known as lacto-fermentation.
Lacto-fermentation and pickling are the two methods of fermentation. Lots of foods can be pickled and surprisingly enough Wikipedia has a good list of food types that are normally fermented. Though it seems rather difficult to find a list of fermentation methods on the internet, I’m determined to provide the information you need! The next qoutes come from 2 pdf guides that will help you to begin learning lacto-fermentation.
Lactobacilli are present on the surface of all living things. You can easily learn the techniques of growing and using them to convert starches and sugars in vegetables and fruits into lactic acid, a natural preservative that inhibits putrefying bacteria.
Making and Eating Fermented Foods: Why and How
A 1-gallon container is needed for each 5 pounds of fresh vegetables. Therefore, a 5-gallon stone crock is of ideal size for fermenting about 25 pounds of fresh cabbage or cucumbers. Food-grade plastic and glass containers are excellent substitutes for stone crocks.
Let’s Preserve: Fermented and Pickled Foods
Curing and Smoking Food
norwegian_salmon_medium_jpg_360x360_crop-scale_upscale_q85When it comes to meat and fish, curing and smoking are some of the oldest food preservation methods still in practice today. The applications of salt, sugar, nitrite and/or nitrate are the methods for curing meat and fish, another term for this is charcuterie. I was surprised to find a website about curing olives! It isn’t difficult to find a plethura of recipes for curing as well as recipes for smoking meats.
Here’s a final link concerning safety and preservation before going into the possible health concerns of modern day man made preservatives.
Home canning is an excellent way to preserve garden produce and share it with family and friends, but it can be risky or even deadly if not done correctly and safely.
CDC: Home Canning and Botulism
Dangers of Modern Preservatives
There are many reasons why a lot of man made food additives pose a threat to health, some of which destroys beneficial bacteria within us that we rely on. Though some of these additives are beneficial, there are other preservatives that are a hinderance to our bodies, some even encouraging bad bacterial growth rather than beneficial.
In response to consumer demand for more natural food, the food industry has reduced the amount of preservatives in food over recent years. A common preservative is acetic acid, which is used to stop bacterial growth in dressings, sauces, cheese and pickles.
However, new research shows that a small amount of acetic acid does not have the intended effect, but rather the opposite — it increases the amount of toxin from the harmful bacteria in the food.
Science Daily
Food additives find their way into our foods to help ease processing, packaging and storage. But how do we know what food additives is in that box of macaroni and cheese and why does it have such a long shelf life?
A typical American household spends about 90 percent of their food budget on processed foods, and are in doing so exposed to a plethora of artificial food additives, many of which can cause dire consequences to your health.
Foodmatters: Top 10 Food Additives to Avoid
The last link we’ll leave you with on the matter is a gigantic list of food additives which will point out which additives are actually safe, which to cut back on, some to be cautious about, additives to completely avoid and others which may be dangerous to a select few.
Center For Science In The Public Interest: Chemical Cuisine, Learn about Food Additives

Read more: http://www.exposingthetruth.co/the-art-of-food-preservation/#ixzz2u9ghgxBH
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Saturday, 22 February 2014

Underground Greenhouses And All-Year Growing

garde There is a growing need for safe, healthy, and natural food items, and what seems like a decreasing amount of space to grow healthy organic food in nutrient-rich soil. Growers are always looking for methods which will save energy, reduce pollution, grow more and higher quality crops, and they want something that is affordable. Underground greenhouses are a preferred method for the environmentally conscious grower.
Underground greenhouses can be constructed within a wide variety of geographic and climatic conditions, and because the ground is warmer in the winter and cooler in the summer: you are creating a far more stable micro-climate than growing outside. Typically, the design is built 3 to 5 feet underground, and the setup allows for the collection and storage of daytime solar radiation. Growing can be done all year long regardless of the weather conditions, which is why the underground greenhouses are referred to as the Walipini, meaning the “place of warmth”.
The greenhouse is covered with plastic sheeting, and the longest area of the rectangle of the design faces the winter sun. For the Southern Hemisphere it would face to the north, and vice versa for those in the Northern Hemisphere. The depth of the project allows the farmer to utilize thermal constant temperatures, enabling food to grow in colder weather conditions. The underground, nature-friendly method has been around for decades, and proven to be an efficient design which utilizes nature’s resources in order to provide a stable and warm environment for yearlong growing.
gardenhySolar greenhouses rely mostly on sunshine for growing, and the crops are not determined by weather conditions. For those growing in areas such as western China, this method has proved to be resilient and effective. The greenhouses have enabled farmers in diverse regions to vastly increase farming output, producing vegetables during a time of year that they otherwise wouldn’t have produced. The underground greenhouse method has consequently revolutionized the surrounding economy there.
Ma Junxian, from Guyuan City, makes at least 20,000 yuan (2,941 U.S. dollars) in yearly annual income by growing celery, broccoli and chili throughout the year in his 667-square-meter greenhouse. The earnings are 10 times as much as what he is used to earning when he had been growing using more conventional farming methods which rely solely on the weather for a harvest.
The underground greenhouse method allows for natural insulation, while optimizing solar absorbency. These partially subterranean greenhouses appear to be the best for growing winter horticultural crops, and have been adopted in numerous countries, such as Japan, Russia, Korea, and now even the United States. The only consideration may be incorporating some kind of runoff system, or building it on a hill, to deal with times of heavy rainfall. These underground greenhouses can be something built very small for an individual or family, or it can be much larger to accommodate for more commercial needs. But it has proven to be more beneficial for growers than conventional methods which are at the mercy of varying weather conditions. Cheaper than quadraphonic, but more effort than urban homesteading, an underground greenhouse is almost universally viable,  more than affordable, and ecologically smart.

Another Day, Another Coal Industry Environmental Disaster

In yet another unfortunate event for the big coal-industry public relations campaign, Patriot Coal accidentally spilled more than 100,000 gallons of toxic waste from a coal processing facility in West Virginia recently. Roughly six miles of Fields Creek, a body of water which flows through into the Kanawha River, was blackened by the spill. The toxic waste contained fine particles of processed coal, composed of heavy metals and coal-cleaning chemicals.
“When this much coal slurry goes into the stream, it wipes the stream out,…. This has had significant, adverse environmental impact to Fields Creek and an unknown amount of impact to the Kanawha River.” – said Randy Huffman, head of the West Virginia Department of Environmental Protection (DEP).
According to DEP, the spill was allegedly caused by a malfunction of a valve inside the slurry line, which was carrying material from the preparation plant to a separate disposal site. The valve broke between 2:30 and 5:30 Tuesday morning, and although companies are required to immediately report any spills to the DEP, Patriot Coal didn’t properly notify DEP until 7:40 the same morning. The alarm system which was in place to send alert notifications failed, and therefore pumps continued to send toxic slurry through the system.
cococoThe spill adds to other recent coal power industry disasters with the spill of toxic coal-cleaning chemicals that was responsible for poisoning drinking water for hundreds of thousands in West Virginia, as well as the monstrous coal-ash spill which occurred in North Carolina (where 80k tons of coal ash and other chemicals were released into the Dan river), among many others.
The number of accidents continues to rise while the effects of older ones are still not remotely under control. As many as 1/3 of the residents of West Virgina are still without clean drinking water, and despite repeated claims that such chemical leaks will not affect water quality: experience seems to dictate otherwise. Isn’t it time environmental crimes and disasters are taken at least as seriously as, well, stealing cows?

TTIP Will Allow Corporations To Sue Governments, Reduce Regulation

According to official estimates, TTIP could add over $130 billion annually to the U.S. economy, and over $119 billion to the E.U. The TTIP will help to smooth capital flows, the agreement will dramatically help to reduce costs of big businesses and investments. The agreement would overhaul a current web of regulations and tariffs, by overriding existing (conflicting) regulations from both sides, with fewer constraints allowing capital to flow more freely.

“Europe does have a different level of standard there, an unreasonably high level and not one based on science… European consumers have the same degree of confidence that if it’s good for an American family to eat, then it’s good for the Europeans to eat. So if a suit like that was brought, and was successful, it would mean that the country banning the product would have to pay compensation to the industry involved, or let the product in… that would be a big step forward” -Stuart E. Eizenstat, US ambassador and Co-Chair of the Transatlantic Business Council, USA.

Unfortunately, the consumer will pay the price in the end, due to the potential new risks posed to their health and safety as a consequence of reduced regulations, which were put in place for consumer protection. In December, U.S. and E.U. officials completed the 3rd round of negotiations, the 4th round is scheduled to occur in March of 2014, following a review session held between US and EU trade representatives.

Another growing worry for some with the TTIP is the issue of multinational corporate sovereignty. Some predict that corporations will abuse their right to take action against various governments to push their agendas forward.

“Corporate sovereignty is about putting the corporation above the nation. It lets a company sue a country, and they can do that when they claim that their expectation (future profits) is being diminished by changes in legislation… What I think will happen is that corporations like Monsanto, will sue the European Union for billions of dollars, because they will say that refusing to allow genetically modified organisms to be sold here is actually a barrier to trade, and therefore their profits have suffered, and therefore under the TTIP regulations, assuming they go through, they will claim to have a right to sue the European Union.” – states journalist Glyn Moody

Some believe that the growing NSA scandal could slow-down or tarnish the TTIP efforts: how can you have trade when you don’t have trust? To date, there have been no real consequences for the organization which is responsible for arguably one of the most shameful and gross violations to civil rights ever revealed in the US.

“This treaty is [nothing] else than about submitting the EU working force to corporate [America],… This is all a hoax, all a lie,… We have our own rules, they are working fine, why should we submit ourselves to the Monsanto mafia? – stated economic analyst, Michael Mross

Some of the thus unmentioned issues are pesticides (like neonicotinoids) and regulations about genetically modified organisms. Corporations will gain the right to sue governments for stopping their products: if it is allowed in one, it will be allowed in the other.. All in all, the money that is likely going to be earned through this is never to be seen by the average consumer, who will still have to face the costs of having even less control or knowledge about what they are eating and buying.

Friday, 21 February 2014

NSA Vows to Spy Even More

NSA Vows to Spy Even More
No final decision has been made to preserve the data, officials said, and one official said that even if a decision is made to retain the information, it would be held only for the purpose of litigation and not be subject to searches. The government currently collects phone records on millions of Americans in a vast database that it can mine for links to terror suspects. The database includes records of who called whom, when they called and for how long.

Saturday, 15 February 2014

Napoleon's Micro Chip

Scientist were shocked when they found a small, half-inch long foreign object embedded within the skeletal remains of once French ruler, Napoleon Bonaparte. 

This seems to go hand-in-hand with Bonaparte's own story of abduction when he disappeared for several days in July 1794, claiming he had been held prisoner against his will by a strange group of men. 

Ancient Signs of Modern Technology

These actual Egyptian Hieroglyphics show what appear to be images of a helicopter, submarine, boat, and jet airplane.

 Many believe this is proof that aliens once visited the ancient Egyptians, arriving in their advanced technology and leaving behind quit an interesting story for our ancestors to tell. 

Aliens. Extraterrestrials

 Whatever you call them, sightings have been around since man first gazed into the skies. And what follows are 15 signs that just may prove they very well exist. Let's start with NASA.

 Three Days into the Apollo 11 Mission, the crew reported a strange flying object not far from their location. They assumed it was a piece of the detached SIV-B rocket. That is, until they received word that it was over 6,000 miles away. To this day, the highly-trained crew and team of NASA scientists have no offical explanation for what the object could have been. Even famous astronaut Buzz Aldrin confessed to the sighting! Continue on for even more fantastic evidence of alien life. 

Monday, 10 February 2014

Gangster Bankers: Too Big to Jail

Gangster Bankers: Too Big to Jail

Illustration by Victor Juhasz

deal was announced quietly, just before the holidays, almost like the government was hoping people were too busy hanging stockings by the fireplace to notice. Flooring politicians, lawyers and investigators all over the world, the U.S. Justice Department granted a total walk to executives of the British-based bank HSBC for the largest drug-and-terrorism money-laundering case ever. Yes, they issued a fine – $1.9 billion, or about five weeks' profit – but they didn't extract so much as one dollar or one day in jail from any individual, despite a decade of stupefying abuses.
People may have outrage fatigue about Wall Street, and more stories about billionaire greedheads getting away with more stealing often cease to amaze. But the HSBC case went miles beyond the usual paper-pushing, keypad-punching­ sort-of crime, committed by geeks in ties, normally associated­ with Wall Street. In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.
For at least half a decade, the storied British colonial banking power helped to wash hundreds of millions of dollars for drug mobs, including Mexico's Sinaloa drug cartel, suspected in tens of thousands of murders just in the past 10 years – people so totally evil, jokes former New York Attorney General Eliot Spitzer, that "they make the guys on Wall Street look good." The bank also moved money for organizations linked to Al Qaeda and Hezbollah, and for Russian gangsters; helped countries like Iran, the Sudan and North Korea evade sanctions; and, in between helping murderers and terrorists and rogue states, aided countless common tax cheats in hiding their cash.
"They violated every goddamn law in the book," says Jack Blum, an attorney and former Senate investigator who headed a major bribery investigation against Lockheed in the 1970s that led to the passage of the Foreign Corrupt Practices Act. "They took every imaginable form of illegal and illicit business."
That nobody from the bank went to jail or paid a dollar in individual fines is nothing new in this era of financial crisis. What is different about this settlement is that the Justice Department, for the first time, admitted why it decided to go soft on this particular kind of criminal. It was worried that anything more than a wrist slap for HSBC might undermine the world economy. "Had the U.S. authorities decided to press criminal charges," said Assistant Attorney General Lanny Breuer at a press conference to announce the settlement, "HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized."
It was the dawn of a new era. In the years just after 9/11, even being breathed on by a suspected terrorist could land you in extralegal detention for the rest of your life. But now, when you're Too Big to Jail, you can cop to laundering terrorist cash and violating the Trading With the Enemy Act, and not only will you not be prosecuted for it, but the government will go out of its way to make sure you won't lose your license. Some on the Hill put it to me this way: OK, fine, no jail time, but they can't even pull their charter? Are you kidding?
But the Justice Department wasn't finished handing out Christmas goodies. A little over a week later, Breuer was back in front of the press, giving a cushy deal to another huge international firm, the Swiss bank UBS, which had just admitted to a key role in perhaps the biggest antitrust/price-fixing case in history, the so-called LIBOR scandal, a massive interest-rate­rigging conspiracy involving hundreds of trillions ("trillions," with a "t") of dollars in financial products. While two minor players did face charges, Breuer and the Justice Department worried aloud about global stability as they explained why no criminal charges were being filed against the parent company.
"Our goal here," Breuer said, "is not to destroy a major financial institution."
A reporter at the UBS presser pointed out to Breuer that UBS had already been busted in 2009 in a major tax-evasion case, and asked a sensible question. "This is a bank that has broken the law before," the reporter said. "So why not be tougher?"
"I don't know what tougher means," answered the assistant attorney general.
lso known as the Hong Kong and Shanghai Banking Corporation, HSBC has always been associated with drugs. Founded in 1865, HSBC became the major commercial bank in colonial China after the conclusion of the Second Opium War. If you're rusty in your history of Britain's various wars of Imperial Rape, the Second Opium War was the one where Britain and other European powers basically slaughtered lots of Chinese people until they agreed to legalize the dope trade (much like they had done in the First Opium War, which ended in 1842).
A century and a half later, it appears not much has changed. With its strong on-the-ground presence in many of the various ex-colonial territories in Asia and Africa, and its rich history of cross-cultural moral flexibility, HSBC has a very different international footprint than other Too Big to Fail banks like Wells Fargo or Bank of America. While the American banking behemoths mainly gorged themselves on the toxic residential-mortgage trade that caused the 2008 financial bubble, HSBC took a slightly different path, turning itself into the destination bank for domestic and international scoundrels of every possible persuasion.
Three-time losers doing life in California prisons for street felonies might be surprised to learn that the no-jail settlement Lanny Breuer worked out for HSBC was already the bank's third strike. In fact, as a mortifying 334-page report issued by the Senate Permanent Subcommittee on Investigations last summer made plain, HSBC ignored a truly awesome quantity of official warnings.
In April 2003, with 9/11 still fresh in the minds of American regulators, the Federal Reserve sent HSBC's American subsidiary a cease-and-desist­ letter, ordering it to clean up its act and make a better effort to keep criminals and terrorists from opening accounts at its bank. One of the bank's bigger customers, for instance, was Saudi Arabia's Al Rajhi bank, which had been linked by the CIA and other government agencies to terrorism. According to a document cited in a Senate report, one of the bank's founders, Sulaiman bin Abdul Aziz Al Rajhi, was among 20 early financiers of Al Qaeda, a member of what Osama bin Laden himself apparently called the "Golden Chain." In 2003, the CIA wrote a confidential report about the bank, describing Al Rajhi as a "conduit for extremist finance." In the report, details of which leaked to the public by 2007, the agency noted that Sulaiman Al Rajhi consciously worked to help Islamic "charities" hide their true nature, ordering the bank's board to "explore financial instruments that would allow the bank's charitable contributions to avoid official Saudi scrutiny." (The bank has denied any role in financing extremists.)
In January 2005, while under the cloud of its first double-secret­-probation agreement with the U.S., HSBC decided to partially sever ties with Al Rajhi. Note the word "partially": The decision­ would only apply to Al Rajhi banking and not to its related trading company, a distinction that tickled executives inside the bank. In March 2005, Alan Ketley, a compliance officer for HSBC's American subsidiary, HBUS, gleefully told Paul Plesser, head of his bank's Global Foreign Exchange Department, that it was cool to do business with Al Rajhi Trading. "Looks like you're fine to continue dealing with Al Rajhi," he wrote. "You'd better be making lots of money!"
But this backdoor arrangement with bin Laden's suspected "Golden Chain" banker wasn't direct enough – many HSBC executives wanted the whole shebang restored. In a remarkable e-mail sent in May 2005, Christopher Lok, HSBC's head of global bank notes, asked a colleague if they could maybe go back to fully doing business with Al Rajhi as soon as one of America's primary banking regulators, the Office of the Comptroller of the Currency, lifted the 2003 cease-and-desist order: "After the OCC closeout and that chapter is hopefully finished, could we revisit Al Rajhi again? London compliance has taken a more lenient view."
After being slapped with the order in 2003, HSBC began blowing off its requirements both in letter and in spirit – and on a mass scale, too. Instead of punishing the bank, though, the government's response was to send it more angry letters. Typically, those came in the form of so-called "MRA" (Matters Requiring Attention) letters sent by the OCC. Most of these touched upon the same theme, i.e., HSBC failing to do due diligence on the shady characters who might be depositing money in its accounts or using its branches to wire money. HSBC racked up these "You're Still Screwing Up and We Know It" orders by the dozen, and in just one brief stretch between 2005 and 2006, it received 30 different formal warnings.
Nonetheless, in February 2006 the OCC under George Bush suddenly decided to release HSBC from the 2003 cease-and-desist­ order. In other words, HSBC basically violated its parole 30 times in just more than a year and got off anyway. The bank was, to use the street term, "off paper" – and free to let the Al Rajhis of the world come rushing back.
After HSBC fully restored its relationship with the apparently terrorist-friendly Al Rajhi Bank in Saudi Arabia, it supplied the bank with nearly 1 billion U.S. dollars. When asked by HSBC what it needed all its American cash for, Al Rajhi explained that people in Saudi Arabia need dollars for all sorts of reasons. "During summer time," the bank wrote, "we have a high demand from tourists traveling for their vacations."
The Treasury Department keeps a list compiled by the Office of Foreign Assets Control, or OFAC, and American banks are not supposed to do business with anyone on the OFAC list. But the bank knowingly helped banned individuals elude the sanctions process. One such individual was the powerful Syrian businessman Rami Makhlouf, a close confidant of the Assad family. When Makhlouf appeared on the OFAC list in 2008, HSBC responded not by severing ties with him but by trying to figure out what to do about the accounts the Syrian power broker had in its Geneva and Cayman Islands branches. "We have determined that accounts held in the Caymans are not in the jurisdiction of, and are not housed on any systems in, the United States," wrote one compliance officer. "Therefore, we will not be reporting this match to OFAC."
Translation: We know the guy's on a terrorist list, but his accounts are in a place the Americans can't search, so screw them.
Remember, this was in 2008 – five years after HSBC had first been caught doing this sort of thing. And even four years after that, when being grilled by Michigan Sen. Carl Levin in July 2012, an HSBC executive refused to absolutely say that the bank would inform the government if Makhlouf or another OFAC-listed name popped up in its system – saying only that it would "do everything we can."
The Senate exchange highlighted an extremely frustrating dynamic government investigators have had to face with Too Big to Jail megabanks: The same thing that makes them so attractive to shady customers – their ability to instantaneously move money around the world to places like the Cayman Islands and Switzerland – makes it easy for them to play dumb with regulators by hiding behind secrecy laws.
When it wasn't banking for shady Third World characters, HSBC was training its mental firepower on the problem of finding creative ways to allow it to do business with countries under U.S. sanction, particularly Iran. In one memo from HSBC's Middle East subsidiary, HBME, the bank notes that it could make a lot of money with Iran, provided it dealt with what it termed "difficulties" – you know, those pesky laws.
"It is anticipated that Iran will become a source of increasing income for the group going forward," the memo says, "and if we are to achieve this goal we must adopt a positive stance when encountering difficulties."
The "positive stance" included a technique called "stripping," in which foreign subsidiaries like HSBC Middle East or HSBC Europe would remove references to Iran in wire transactions to and from the United States, often putting themselves in place of the actual client name to avoid triggering OFAC alerts. (In other words, the transaction would have HBME listed on one end, instead of an Iranian client.)
For more than half a decade, a whopping $19 billion in transactions involving Iran went through the American financial system, with the Iranian connection kept hidden in 75 to 90 percent of those transactions. HSBC has been headquartered in England for more than two decades – it's Europe's largest bank, in fact – but it has major subsidiary operations in every corner of the world. What's come out in this investigation is that the chiefs in the parent company often knew about shady transactions when the regional subsidiary did not. In the case of banned Iranian transactions, for instance, there are multiple e-mails from HSBC's compliance head, David Bagley, in which he admits that HSBC's American subsidiary probably has no clue that HSBC Europe has been sending it buttloads of banned Iranian money.
"I am not sure that HBUS are aware of the fact that HBEU are already providing clearing facilities for four Iranian banks," he wrote in 2003. The following year, he made the same observation. "I suspect that HBUS are not aware that [Iranian] payments may be passing through them," he wrote.
What's the upside for a bank like HSBC to do business with banned individuals, crooks and so on? The answer is simple: "If you have clients who are interested in 'specialty services'­ – that's the euphemism for the bad stuff – you can charge 'em whatever you want," says former Senate investigator Blum. "The margin on laundered money for years has been roughly 20 percent."
Those charges might come in many forms, from upfront fees to promises to keep deposits at the bank for certain lengths of time. However you structure it, the possibilities for profit are enormous, provided you're willing to accept money from almost anywhere. HSBC, its roots in the raw battlefield capitalism of the old British colonies and its strong presence in Asia, Africa and the Middle East, had more access to customers needing "specialty services" than perhaps any other bank.
And it worked hard to satisfy those customers. In perhaps the pinnacle innovation in the history of sleazy banking practices, HSBC ran a preposterous offshore operation in Mexico that allowed anyone to walk into any HSBC Mexico branch and open a U.S.-dollar account (HSBC Mexico accounts had to be in pesos) via a so-called "Cayman Islands branch" of HSBC Mexico. The evidence suggests customers barely had to submit a real name and address, much less explain the legitimate origins of their deposits.
If you can imagine a drive-thru heart-transplant clinic or an airline that keeps a fully-stocked minibar in the cockpit of every airplane, you're in the ballpark of grasping the regulatory absurdity of HSBC Mexico's "Cayman Islands branch." The whole thing was a pure shell company, run by Mexicans in Mexican bank branches.
At one point, this figment of the bank's corporate imagination had 50,000 clients, holding a total of $2.1 billion in assets. In 2002, an internal audit found that 41 percent of reviewed accounts had incomplete client information. Six years later, an e-mail from a high-ranking HSBC employee noted that 15 percent of customers didn't even have a file. "How do you locate clients when you have no file?" complained the executive.
It wasn't until it was discovered that these accounts were being used to pay a U.S. company allegedly supplying aircraft to Mexican drug dealers that HSBC took action, and even then it closed only some of the "Cayman Islands branch" accounts. As late as 2012, when HSBC executives were being dragged before the U.S. Senate, the bank still had 20,000 such accounts worth some $670 million – and under oath would only say that the bank was "in the process" of closing them.
Meanwhile, throughout all of this time, U.S. regulators kept examining HSBC. In an absurdist pattern that would continue through the 2000s, OCC examiners would conduct annual reviews, find the same disturbing shit they'd found for years, and then write about the bank's problems as though they were being discovered for the first time. From the 2006 annual OCC review: "During the year, we identified a number of areas lacking consistent, vigilant adherence to BSA/AML policies. . . . Management responded positively and initiated steps to correct weaknesses and improve conformance with bank policy. We will validate corrective action in the next examination cycle."
Translation: These guys are assholes, but they admit it, so it's cool and we won't do anything.
A year later, on July 24th, 2007, OCC had this to say: "During the past year, examiners identified a number of common themes, in that businesses lacked consistent, vigilant adherence to BSA/AML policies. Bank policies are acceptable. . . . Management continues to respond positively and initiated steps to improve conformance with bank policy."
Translation: They're still assholes, but we've alerted them to the problem and everything'll be cool.
By then, HSBC's lax money-laundering controls had infected virtually the entire company. Russians identifying themselves as used-car salesmen were at one point depositing $500,000 a day into HSBC, mainly through a bent traveler's-checks operation in Japan. The company's special banking program for foreign embassies was so completely fucked that it had suspicious-activity­ alerts backed up by the thousands. There is also strong evidence that the bank was allowing clients in Sudan, Cuba, Burma and North Korea to evade sanctions.
When one of the company's compliance chiefs, Carolyn Wind, raised concerns that she didn't have enough staff to monitor suspicious activities at a board meeting in 2007, she was fired. The sheer balls it took for the bank to ignore its compliance executives and continue taking money from so many different shady sources­ while ostensibly it had regulators swarming­ all over its every move is incredible. "You can't make up more egregious money-laundering that permeated an entire institution," says Spitzer.
By the late 2000s, other law enforcement agencies were beginning to catch HSBC's scent. The Department of Homeland Security started investigating HSBC for laundering drug money, while the attorney general's office in West Virginia snooped around HSBC's involvement in a Medicare-fraud case. A federal intra-agency meeting was convened in Washington in September 2009, at which it was determined that HSBC was out of control and needed to be investigated more closely.
The bank itself was then notified that its usual OCC review was being "expanded." More OCC staff was assigned to pore through HSBC's books, and, among other things, they found a backlog of 17,000 alerts of suspicious activity that had not been processed. They also noted that the bank had a similar pileup of subpoenas in money-laundering cases.
Finally it seemed the government was on the verge of becoming genuinely pissed off. In March 2010, after seeing countless ultimatums ignored, they issued one more, giving HSBC three months to clear that goddamned 17,000-alert backlog or else there would be serious consequences. HSBC met that deadline, but months later the OCC again found the bank's money-laundering controls seriously wanting, forcing the government to take, well . . . drastic action, right?
Sort of! In October 2010, the OCC took a deep breath, strapped on its big-boy pants and . . . issued a second cease-and-desist order!
In other words, it was "Don't Do It Again" – again. The punishment for all of that dastardly defiance was to bring the regulatory process right back to the same kind of double-secret-probation­ order they'd tried in 2003.
Not to say that HSBC didn't make changes after the second Don't Do It Again order. It did – it hired some people.