CommonSpace editor Ben Wray looks at the history of HSBC, the bank that is promoting an internationalist interpretation of Britain – but which misses out its own, dark role in that story.
THE HSBC ‘We are not an island’ advert – promoted online, on TV and a poster campaign plastered across UK cities – has caused a stir, seen by many to be an anti-Brexit statement in the current frenzied atmosphere of British politics.
The advert makes the point that British culture can’t be separated from its global influences across food, sport, taste in cars, furniture and more. Hence: ‘We are not an island – we are part of something far, far bigger”.
“With the ‘We are not an island’ poster we are reinforcing our strong belief that the things that make us quintessentially British are the things that make us inescapably international,” an HSBC spokesperson said, responding to critics.
In a statement to The Drum, the spokesperson clarified that “…this campaign is not about Brexit. It focuses on the importance of being open and connected to the world.”
Some marketing experts have questioned whether HSBC’s advert may be a mistake, dividing customers in the UK. Another school of thought is that the espousing of liberal values could attract new, younger customers to the bank. It has certainly enamoured them to many on Twitter. Or maybe bank executives just feels strongly about trying to influence UK political culture and don’t mind spending a bit of spare cash doing it (they did make $17.17 billion in pre-tax profits last year, after all).
Regardless, the message that Britain is indeed integrated into the world and that this is a positive part of British cultural identity is not the problem here. The problem is that the messenger is a reminder of the other, much darker side of global integration – the plutocratic rule of corporate elites, and in our era banking elites in particular.
In fact, HSBC is something of a case study in this respect, showing how the international economic order is historically rooted in colonial power, with today’s British establishment still playing the role of protector-in-chief of the City of London based global financial power, even if that means defending the illegal and utterly indefensible. HSBC represents the dark side of internationalism.
The story of HSBC, the Hong Kong and Shanghai Banking Corporation, begins with a Scotsman, Thomas Sutherland. He set up the bank in 1865, just five years after the second opium war, which forced China to legalise the sale of opium and open up its ports so Britain could bring trade (cheifly opium) in, primarily from British-ruled India.
When Hong Kong, an island just off the China’s coast in the South China Sea, was established as a colony, Sutherland – who had worked in the colonial steamship business through P&O – created HSBC to financially facilitate the opium trade in China. Ever since, HSBC has been important to British influence in Asia, and despite leaving Hong Kong to headquarter in the City of London in 1993 (four years before the end of British rule in Hong Kong), it is still dominant in Hong Kong Finance, issuing 70 per cent of Hong Kong Dollars. It has also expanded its presence to North and South America, becoming a truly global bank.
After all that time, it’s unclear whether HSBC’s links to the drug trade have fully gone away. A 2012, 300 page report by a US Senate Committee found the bank was a conduit for “drug kingpins”, with HSBC Mexico having inadequate money laundering controls despite the country being at the centre of the global drug trade. The report found the bank had high profile clients involved in the drug trade, was resistant to closing down accounts with suspicious activity and had millions in suspicious cash movements between Mexico and the US.
“The US bank subsidiary failed to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of physical dollars from its Mexico unit,” the report found.
The report also found evidence of the bank’s links to terrorist activity and money laundering worldwide, but HSBC was only fined $2 billion despite such widespread criminality.
READ MORE: HSBC files show that bank helped clients dodge millions in tax
Hervé Falciani, a Franco-Italian, who worked at HSBC as a systems engineer between 2006 and 2008 in Geneva, leaked 127,000 of internal HSBC files which revealed fraud and tax evasion operations worldwide, leading to the French Government indicting HSBC for money laundering in 2014.
The leak revealed the role of HSBC in using the Jersey British Crown dependency to set up accounts for drug dealers and fraudsters. Tax avoidance expert and campaigner Richard Murphy said that the leak “confirms what we’ve begun to realise, that this is a bank that was, during the period that the Reverend Lord Stephen Green was in charge [2003-2006], the world’s biggest money-launderer.”
Throughout all this illegality, the British state was doing everything it could to protect HSBC from the law. Former HMRC boss Dave Harnett signed a tax deal which essentially secured HSBC bankers immunity from prosecution over the Falciani leaks. Harnett then left HMRC in 2013 – to work for HSBC.
READ MORE: Osborne suggests HSBC “unfairly targeted” during money laundering probe
A US report into the 2012 US Senate HSBC money laundering investigation, ‘Too big to jail: Inside the Obama Justice Department’s decision not to hold Wall Street accountable’, found that the UK Financial Services Authority and then Chancellor George Osborne sought to “hamper” the investigation to stop HSBC executives facing prosecution. FSA, according to the report, had warned the Department of Justice that despite the recommendation to prosecute, they shouldn’t do so as it “could result in a global financial disaster”.
HSBC has used its media, as well as political, influence to try to shut down criticism. In 2015 Daily Telegraph journalist Peter Oborne resigned from the paper due to the bank’s influence as an advertiser on the paper’s content, which was unusually muted over the Falciani leaks. Oborne submitted an article in 2014 on HSBC allegedly closing the accounts of British Muslims, but the editorial team wouldn’t publish it.
“When I asked the legal department, the lawyers were unaware of any difficulty. When I pushed the point, an executive took me aside and said that ‘there is a bit of an issue with HSBC’,” Oborne wrote.
READ MORE: HSBC bank accused of financial bullying of Telegraph and Guardian newspapers
The chief executive, Murdoch MacLennan, admitted to Oborne that advertising affected coverage, according to Oborne’s resignation letter, but was “unapologetic”. Another former Telegraph executive told Oborne that HSBC was “the advertiser you literally cannot afford to offend”. Telegraph reporters had been tipped off about an HSBC tax scandal story but had been “ordered to destroy all emails, reports and documents related to the HSBC investigation.”
That is just a snapshot of HSBC’s practices, and does not even include the banking scandals known to everyone: the 2008 financial crash, Libor and Forex. Nor does it include Nicholas Wilson exposing the bank’s excessive credit card charges. And that’s only the corruption – the everyday, legal reality of financialisation, highlighted by the TUC yesterday as levels of unsecured debt in the UK reache new peaks, is the key driver of global economic instability and outrageous inequality.
READ MORE: Scotland getting on in a world getting off – Scottish internationalism in the age of Trump
In a sense HSBC is right: what is quintessentially British is internationalist, but much of what really accounts for this internationalism – global financial power founded on post-colonial international networks of corruption and exploitation – is not something to be proud of. We should question what it means to be British, and thus question HSBC’s form of internationalism from above.
An internationalism from below would always side with the oppressed and exploited everywhere, and would challenge Britain’s current international role in the world – regardless of Brexit.
Picture courtesy of Thomas Mathie
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