HSBC: The Money Laundering Scandal | Criminal Banks | Finance | Documentary

- [Woman] A massive leak, more than 11 million records, is shedding light on how dark money flows through the global financial system. - [Man] These types of offshore entities have been used for decades. - [Man] Involvement with terrorist organizations or authoritarian regimes in North Korea and Syria. - [Narrator] Over the last decade, the largest international banks have been involved in multiple scandals. One name embodies the excesses of this renegade finance. HSBC. - No matter where you live, no matter what kind of business you are in, if you wish to enter the offshore system, HSBC is

likely to be your bank. - [Narrator] From Geneva to Hong Kong, from New York to Paris, this financial empire has created a unique network to move dirty money around the world. - HSBC is considered one of the best money laundering institutions globally. - [Narrator] From tax evasion to money laundering for the mafia and manipulation of currency, HSBC has its hands in a variety of elicit activities. - Affiliates of drug cartels were literally walking into bank branches with hundreds of thousands, sometimes millions, of dollars of US cash. - We are here today to announce the filing

of criminal charges against HSBC bank. - This bank had done everything bad that a bank can possibly do. - [Narrator] Often pursued but never condemned. - How many billions of dollars do you have to launder for drug lords before somebody says, we're shutting you down. - [Narrator] HSBC enjoys unbelievable impunity and continues to earn more profits. - Normally this bank would have been closed down, they would have lost their license to operate. - [Narrator] From London, HSBC bankers have rendered governments powerless. - I'm responsible for cleaning it up. - Do banks still get away with

murder so to speak? They do, it's capitalism and the big banks hold a lot of sway. - [Narrator] HSBC stands for Hong Kong and Shanghai Banking Corporation. In Hong Kong, it is simply called the bank. It's here that HSBC was born and where it makes the bulk of its profits. Hong Kong is the new El Dorado of world finance. Every year, this city is enriched by hundreds of billions of Euros accumulated by new Chinese fortunes. - Hong Kong probably is the only city in the world who understands China better than everybody. You want to trade

in China, you never set foot in China, it's not an easy place to understand. But we because the fact that we're so close and actually culturally we're so close we understand what China wants or what China businessmen or China people wants. We are specialized middlemen in dealing with China if you like. At the same time I think most people in China doesn't understand how the Western world works. And so if I'm a rich Chinese wanting to invest in the world, probably the first thing I'll do is call my friends in Hong Kong and say who

should I talk to? - [Narrator] Hong Kong symbolizes the great shift of wealth from the West to Asia and HSBC benefits from its unique position. It is the most Chinese of the Western banks or the most European of Chinese banks. - People in China when they come to Hong Kong, they immediately get comfortable or familiar with HSBC. What you often see is Chinese tourists come to your bank branch with a basket full of cash. That's early days. It's not a secret but it happened. - Seeing the changes going from a communist driven country to now

a semi capitalist, more capitalist than most countries in the world, the success of China being there is like living in a living history book. And so HSBC is part of that. I have been with HSBC for so many years I can honestly say HSBC has made most of the tycoons in Hong Kong that you see today, the billionaires in Hong Kong, all of them, most of them, came out of HSBC. - [Narrator] Hong Kong is the Switzerland of Asia. For new Chinese billionaires it serves as a hub to invest their fortunes. To the rest of

the world, it offers a whole range of top of the line financial services. - This place is likely to attract a lot of dirty money. This is a highly secretive jurisdiction but it's also a huge financial entrepreneur. Obviously with such a large Chinese market and so on it's a very big offshore financial center. That combination of scale of operation and scale of secrecy makes it one of the world's biggest, and in our opinion, one of the greatest threats to the global financial markets. It's very easy sitting in Hong Kong to contact your counterparts in BVI

and Tortola and say can you create a company for us and they can do it instantly. You'll have it within 24 hours. - [Narrator] In April 2016, a handful of investigative journalists unveiled a treasure, 11 million confidential documents that revealed the operations of a law office specializing in tax evasion. This became the Panama Papers scandal. - [Man] The size of the Panama Papers leak is bigger than anything you've seen. - [Narrator] From this black box of money laundering, two key players emerge, Hong Kong and the bank HSBC. - We knew this was a major go

to bank for individuals and for companies who wished to benefit from the secrecy that the offshore system provided. So, I or one of my colleagues searched the Panama Papers database with the term HSBC and you saw thousands of results, thousands of emails, thousands of Excel documents, thousands of Word documents, that in some way were discussing HSBC's role in this offshore system. - Hong Kong has traditionally turned a fairly blind eye to where money might be coming from. Panama Papers in Hong Kong, the impact has been less than almost everywhere else despite the fact that the

largest volume of offshore companies were created by Hong Kong people. And in the middle of this sort of offshore bank or treasury is one of the world's largest banks which is, that was the entire reason it was established, to do exactly this sort of thing. - [Narrator] Hong Kong is a safe haven for HSBC, a safe haven with two faces. One is represented by the dozens of branches that finance individuals and businesses. The other is invisible creating shell companies to launder money from crime, corruption, and tax evasion. - It is interesting that the HSBC bank

that you and I know, that we might walk in front of every day on the way to work, or the way to school does seem like a world away from the kind of HSBC who's activities and whose clients emerge in the Panama Papers. Certainly we saw an incredible number of Chinese residents, businessmen and women and of course many family members associated with the leading communist party figures who appeared in the Panama Papers and who often used Hong Kong as a conduit to the offshore world. They're not the kind of clients who walk in on a

bright Tuesday morning to draw a check or to make a deposit. - I just shake my head at much of what I see. Hong Kong doesn't have currency controls at its border. If you can get the money out of China, you can fill up an 18 wheel truck and drive the cash in, nobody's gonna ask you to declare that. - [Narrator] As a former undercover agent working within the money laundering networks of drug cartels, Bill Majcher is now working for the Chinese government. He tracks the flow of illegal money leaving the country. - The two

largest acts of money laundering that I'm aware of in Hong Kong in the last eight, nine years, lead to the conviction of a 65 year old illiterate village woman who laundered in cash about one billion US. It's a huge amount for a little old illiterate woman to be coming in all the time dropping off $30 million in physical cash and shortly after that the next person of note who brought in $13 billion in physical cash was a high school dropout who used to drive across a truck across the border from Guangdon every day with about

50 million. How can that much money move into a system and nobody but the strawmen, the dumbest two in it, get jail time? - Sure, 40 years ago, perhaps Hong Kong was the Wild West but we've come a long way and I don't think that it would be fair to say that Hong Kong is a tax haven country wherever the money comes from. I don't have an idea of how much money is going out of China. We don't keep track of the source of the money in Hong Kong whether it's from China, whether it's from

India, from Singapore, from Japan, that has always been the case and that will continue to be the case. - [Narrator] Laura Cha is the face of the Manhattan of Asia. She also embodies the obscurity of this financial center. Close to the Chinese leaders with whom she once worked as a stock market control agent, she now advises the Hong Kong government while serving on the board of HSBC. - [Interviewer] What was the impact of the Panama Papers in Hong Kong? - It was an item, a headline for a few days. I don't think anybody was talking

about the Panama Papers anymore. - [Interviewer] Today are days of morality. It's rather immoral to have tax evasion. - There's no problem for Hong Kong companies to incorporate BVI or Cayman Island or Bermuda companies and some of these are listed on our market. - [Interviewer] And there's no problem? - It's no problem. - [Narrator] In Hong Kong, HSBC is untouchable. The favored bank of the Chinese is protected by the highest authorities. It has always been one of the pillars of local power. - HSBC is so much part of the fabric in Hong Kong and you

know a lot of people have an account with HSBC. People don't think twice about it. It really is very much part of life. Maybe that's the success of HSBC. - [Narrator] The history of HSBC is deeply linked to the history of Hong Kong. The bank and the former colony were born at the same moment more than 150 years ago. At the time, the British Crown dreamt of conquering the Chinese market that was closed to Westerners. The first settlers chose the fishing port in Hong Kong as the base for their commercial offensive. - It was a

place known for piracy, known for disease, known for prostitution, and it was a place that you had to be careful about investing. Back in the UK, or England, there was a song that people sang in pubs called You Go to Hong Kong for Me. I don't want to go there, right, so you go there for me instead. - [Narrator] The British began trading opium destined for the Chinese market. Given the success of the drug, the emperor burned the cargo of the traffickers. London sends in its military fleet and triggers the Opium War. The Chinese capitulate

and the British gain possession of Hong Kong for 99 years. - The British were controlling large parts of India where opium was grown and basically the British realized that opium was something that people wanted and they realized that they had a lot of opium to offer. So before opium really took off, the balance of trade was in the favor of the Chinese. Once opium becomes such a big product, the balance of trade actually goes toward the British side. - [Narrator] The opium trade has its golden age and the settlers need a bank, they create HSBC,

the Hong Kong and Shanghai Banking Corporation. The most notorious traffickers in the city, mostly Scottish, sit on the first board of directors. - I would say that HSBC was not necessarily created by opium traders but was created by traders who happened to be involved in opium. - It's often been said about HSBC that much of its culture has derived from those Scottish origins by which really what people mean, that's a polite way of saying that they tend to be thrifty and they look after their money and also hard working and conscientious. The sort of classic

Scottish qualities really. These were practical men, they weren't intellectuals, indeed it was a bit like a, as it were like a regiment, had its own code, its own culture. Looked at the outside world often with some suspicion. - [Narrator] In Hong Kong, HSBC takes power. It prints the local currency, finances the construction of the city, and serves the interests of Her Majesty in the Far East. - There were three or four great powers in that quite small place and one of course was the governor as appointed by the British government and one was the chair

of the jockey club which was sort of for the horse racing but a third great power was always the chairman of HSBC. HSBC were always right there at the top. - Hong Kong continues to be the most important source of earnings and profitability for HSBC. If Hong Kong does well, HSBC does well. If HSBC does well, Hong Kong does well. - [Narrator] HSBC has never changed its DNA. Formerly the bank of pirates, it continues to function on the dark side of finance. The only difference is it no longer operates only in Hong Kong. The bank

has become a global empire. HSBC nearly shut down. The fate of the bank was played out in the United States in 2012, four years after the outbreak of the financial crisis. - We are here today to announce the filing of criminal charges against HSBC bank for its sustained and systemic failure to guard against the corruption of our financial system by drug traffickers and other criminals and for evading US sanctions law. - [Narrator] The minister of justice accuses HSBC of laundering the money of the Mexican and Colombian cartels that control the trafficking of cocaine. Nearly one

billion Euros were said to have passed through its Mexican subsidiary before being recycled into the US economy. - Affiliates of drug cartels were literally walking into bank branches with hundreds of thousands, sometimes millions of dollars, of US cash in Mexico and putting it through the teller window sometimes in boxes that were specially designed to fit through the teller window and the HSBC employees took it, they deposited it, and gave the person a receipt and never reported the conduct and never stopped it. And that didn't happen once, it didn't happen twice, it happened systematically over the

course of about a decade. There was one occasion, an individual walks into the bank with maybe three or four million dollars and bank employees spent one full day counting it. So that's just a few million. Imagine that multiplied by several hundred fold and that's what 881 million represents. - [Narrator] The investigation is overwhelming. Not only have bank employees worked hand in hand with criminal organizations responsible for thousands of murders, but their managers ignored all of the warning signs. - The bank had been warned repeatedly and consistently by US authorities and by Mexican authorities. They also

were told that they had recordings from drug lords that said that HSBC was the place to launder money. Well, London knew everything. And they just didn't care. - [Narrator] The accusations are serious. The bank risks losing its license in the United States. The case may precipitate the fall of a company that employs 300,000 people on five continents and manages a sum of three thousand billion dollars. If HSBC were a country, it would be the fifth world economic power. Bank leaders traveled to Washington to be auditioned by the Senate. - Please stand, raise your right hand.

- [Narrator] HSBC must be rescued. - Do you swear that the testimony you are about to give will be the truth, the whole truth, and nothing but the truth, so help you God? - I recognize that there have been some significant areas of failure. I have said before and I will say again, despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators. - So they come up before these hearings and they're very contrite and they sort of try to deflect responsibility and

then the Senate asks more questions and they're more contrite and they deflect more responsibility and then the thing's over and they talk to the media for a minute and then it sort of blows over and then a settlement either happens or it doesn't. - The group has always had as a core element of its compliance policy a focus on both the letter and the spirit of laws and regulations. Not just what is permissible but what is prudent and responsible. - Most of the executives that have been called before the Senate investigation committees have effectively dodged

all of the questions fairly significantly. So from that perspective, the HSBC executives are almost reading from the same script being directed by the same director as the senior executives from the American banks. - Thank you for your time, I welcome this opportunity to answer any questions. - We are gonna recess now until two o'clock. We thank our witnesses. And you are discharged. - [Narrator] The Obama administration is divided. The Department of Justice wants to set an example while the Treasury Department advocates an amicable settlement. HSBC involves the rising star of British politics, the Chancellor of

the Exchequer George Osborne. He writes a letter to his counterpart Timothy Geithner and to the chairman of the Federal Reserve Ben Bernanke in which he defends the HSBC cause. - [Man] Dear Ben, questions about HSBC's continued ability to clear US dollars would risk destabilizing the bank globally with serious implications for financial and economic stability particularly in Europe in Asia. I am copying this letter to Treasury Secretary Geithner with whom I have also discussed this issue. Best wishes, George Osborne. - Finance Minister George Osborne put enormous political pressure on the US government. George Osborne saw this

as a key part of protecting the city of London. Normally this bank would have been closed down, they would have lost their license to operate in the United States. - Remember in 2012, you've just come out of the crisis in 2009 so there's a great concern not to restart that and it's George Osborne saying, listen this is a very powerful global bank and if you indict it it's going to put the financial system under strain. That kind of power says something about the power that banks have in the international system. - [Narrator] Two months later,

the US government yields to pressure from George Osborne and the business community. HSBC escapes trial, its leaders are spared, and the high officials of the Department of Justice keep a low profile. - Look, our goal here is not to bring HSBC down, it's not to cause a systemic effect on the economy, it's not for people to lose thousands of jobs. It's to. - [Reporter] Are they too big to prosecute? - I wouldn't say it's too big to prosecute, I'm not gonna say that. I don't think anyone is alleging. - [Narrator] The bank is eventually fined

two billion Euros. The equivalent of one month's profits. - For an average person who hears the number, the fine is extraordinary. For the bank that is global in reach, that is making a huge amount of money, the fine is a kind of parking ticket. At the end of the day, the fine is not paid by the officers and directors of the company, the fine is paid by the shareholders. So in effect it's a parking ticket given to the wrong people. - Did I feel cheated by paying the huge fines? No I felt angry at the

regulators. I think yes, because the amount was obscene. - [Interviewer] Come on Allan, this is not the regulator being harsh, this is banker doing things which are abominable. - Listen, when you're dealing in Mexico, for argument's sake, yes there is a lot of drug money and it was just part of banking you know? And money just got transferred around all over the world. I think everyone realizes they just maybe were naive. - [Narrator] HSBC saved its skin. The bank gives rise to a new privilege, namely that of being too big to jail. That is to

say, above the law. But the refusal to send bankers to jail triggers the anger of the public. The Department of Treasury officials are put under fire. - Thank you Mr. Chairman. And thank you all three for being here today. How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this? Mr. Cohen can we start with you? - For our part, we imposed on HSBC the largest penalties that we had ever imposed on any

financial institution. - Let me just move you along here on the point, Mr. Cohen. My question is, in your opinion, how many billions of dollars do you have to launder for drug lords before somebody says we're shutting you down? - Well, Senator, the actions, and I'm sure the regulators can address this issue, the actions that we took in the HSBC case we thought were appropriate in that instance. - Governor Powell, perhaps you can help me out here? - Sure, we don't do criminal investigation and in the case of HSBC we gave essentially the statutory maximum

money penalties and we gave very stringent cease and desist orders and we did what we have a legal authority to do. - I'll just say here, if you're caught with an ounce of cocaine, the chances are good you're gonna go to jail. If it happens repeatedly, you may go to jail for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night. Every single individual associated with this and

I just think that's fundamentally wrong. - You could say well, the banks are getting off a lot lighter than criminals who are individuals and my response to that would be well of course because criminals can't tear down the system and HSBC can. - HSBC bought its impunity by being big and so by virtue of being big, they effectively get to continue to operate with impunity. - [Narrator] The banksters, the gangster bankers, made the world's leading economic power fold all in the name of so called international financial stability. - You have to ask, if you don't

prosecute these people, who the hell are you gonna prosecute? Who has jurisdiction over an institution that operates in 100 countries? Who has the responsibility for taking on that kind of criminal undertaking? - [Narrator] HSBC is already more than a bank. It has grown in magnitude and is now as powerful as some states. This is the culmination of a strategy launched 20 years ago. It all began in 1997. Great Britain officially hands over Hong Kong to the People's Republic of China. This marks the end of the British empire in the Far East after a century and

a half of domination. - The story of this great city is about the years before this night. And the years of success that will surely follow it. - [Narrator] The bank has to choose, move with the Crown or stay and be in the grip of China. - HSBC, their principle worry was a concern that post 1997 the Chinese authorities might insist that the management of HSBC become more Chinese in character, that the top people be Chinese and for that generation of British people running HSBC that was unacceptable really. - At that time many people in

Hong Kong felt that Hong Kong was being abandoned. We felt kind of betrayed, you kind of felt somebody was turning their back. Many people thought this is the end of the bank. - [Narrator] HSBC decides to have it both ways. It moves its headquarters to London but keeps the heart of its business in Hong Kong. China has just opened its borders and promises to be a fabulous market. The priority is to flatter the new masters of Beijing. - They described their brief as to create the best bank building in the world. The building was a

statement of confidence. It was about stability, it was about permanence, it was a gesture of confidence in a future beyond the transition of a colony into part of China. It was also making a statement about ambition. HSBC at that time was a local bank and they have become one of the global players. The full extent of that we were only to realize later. - [Narrator] A pioneer of globalization, HSBC intends to spread its Chinese DNA. In the early 2000s, it is the first foreign bank to establish itself in China. Its president, Stephen Green, serves as

an ambassador of capitalism to the leaders of the communist party. - The people in London, they know so well about China. They spend one third, or 30%, of their time if not more in Hong Kong and travel to China constantly. - [Narrator] While the Chinese economy is emerging as the engine of global growth, HSBC executives strategize their position. - Initially we were actually advisers to Bank of China, Shanghai, to raise capital. So, during the process, the president of the Bank of Shanghai ask me what about your own bank? We love HSBC to be part of

our investor groups. So I reported back to Stephen Green and actually Stephen was quite good. Stephen took a flight, went to Shanghai together with me, had a dinner with the president of Bank of Shanghai. After dinner he came out to say I like this bank and also I trust. Let's do the investment. And of course the payoff was good, too. - [Narrator] HSBC triples its investment and pockets nearly 300 million Euros. The bank extends its honeymoon with Beijing by exploiting its own history. Under the dictatorship of Mao, it was the only bank to maintain a

presence in China. When the giant woke up, HSBC was already firmly in place. - It was a terrific message that HSBC were able to give to say we were always there, we never left. And it's always tried hard to compare itself with the American banks and it takes these American banks. They come and they go, we British, we stick around and stay. It's the Chinese philosophy isn't it? Think long. - [Narrator] Once again, history will accelerate the fate of HSBC. In September 2007, the financial crisis hits the streets of London. - [Man] Totally cynical attitude

to your customers. - [Narrator] Panic seizes the clients of Northern Rock and threatens to spread to other banks. The British government proposes lending them money as an emergency response. HSBC snubs the meeting and refuses any public assistance. - Being bailed out by the government, being given capital by the government means that the government has influence on you and HSBC wanted to be able to say you don't have this influence on us, we are independent, we're fine, we can recapitalize ourselves and if you try to force us as one told me, if you try to force

us to take your money, we will take you to court and sue. You could ask well, isn't this really arrogant? It is arrogant but it is also the ability of the bank to signal to a government we're a global bank, you're a single government, and so think about the relative power between us. - [Narrator] HSBC bankers prefer to turn to their friends, Hong Kong businessmen who made their fortunes through trade with China. The bank offers to sell them 18 billion Euros of shares. - We knew when the bank was facing some problems, we have to

help out. And you know the share price was very, very low at the time and for most business people the best thing was why not take a share of the rights issue and those people that did, did very, very well. - [Interviewer] Did you make a lot of money on that deal? - Did I make a lot of money on that deal? I think that yes, normally we don't give out figures but it's a nice profit. - [Narrator] Since that transaction the price of each share has tripled. As always, HSBC made its shareholders rich but

history will remember that for the first time Chinese money rescued a British bank. From now on, it is Beijing that holds the reins as the champion of globalization. - The whole idea of HSBC was to link businesses around the world and so without the likes of HSBC globalization wouldn't have been possible really. You need that framework, that architecture of finance in order to power a global economy. Just think in very practical terms of a company in China that wants to trade with a company in America. HSBC is very, very well placed because they have bigger

operations in both markets, they can follow that whole trade. - [Narrator] Driven by its Chinese business, HSBC is taking advantage of the crisis. While its competitors suffer losses, it is crowned at Westminster. Its president Stephen Green enters the House of Lords. - I Stephen, Lord Green of Hurstpierpoint do swear by almighty God that I will be faithful and bear true allegiance to Her Majesty Queen Elizabeth, her heirs and successors according to law, so help me God. - [Narrator] The banker who is also a deacon preaches the good word on Sunday at church where he criticizes

the influence of money. - Lord Green was himself an upstanding member of society as well as being a moral banker if you like. So he was the acceptable face of banking at a time when most bankers were not acceptable. - [Narrator] Immediately after Stephen Green entered the government as Minister of State for Trade and Investment. Prime Minister David Cameron adopts HSBC's strategy. He also dreams of becoming a hero of globalization. - And I also want you at the same time to sell Britain as a destination for investment. I think with the change we're seeing in

the world economy, rather sluggish growth in Europe but fantastically fast growth from India, from China, from Brazil, Turkey. - It was probably a dream come true for him and this of course was at a time when the Cameron government and George Osborne the then Chancellor were very, very keen to build up Britain's links to Asia and to China in particular. - [Narrator] The promotion of Stephen Green is the doing of the pro-Chinese lobby led by the Chancellor George Osborne. The one who saved HSBC from the American justice system. An informal pact unites the two actors.

Stephen Green opens the doors of the Chinese market to British companies and in exchange, George Osborne is committed to defending the interests of the bank and of its former president all over the world. - George Osborne's fascination with China is quite simple, it's almost the same as mine. He realizes how important 1.3 billion Chinese people are to the future of the world economy and wanted to put the UK right in the middle of that relationship. And the Chinese appreciated that hand of friendship in a really dramatic way and it helped consolidate this, what we call

now this golden relationship. Obviously HSBC carries directly its history from China so they think China. - [Narrator] Nothing seems to be able to derail the banking giant. Protected by London, blessed by Beijing, HSBC serves as a go between for the two capitals. Who would dare attack it? In Paris, a senior official of the finance ministry is waiting for his chance to go on the offensive. He's gotten his hands on HSBC's best kept secret, the list of 100,000 customers who hold accounts in Switzerland. These documents were given to him by a former computer scientist of the

bank. They reveal in detail the clandestine circuits that make it possible to clean dirty money. There's talk of 180 billion Euros, more than the budget of the European Union. - [Man] It's clear that HSBC opened thousands of accounts for the rich and famous. - [Narrator] Swiss Leaks. It's under this name that the world media reveals the scandal and publishes the names of fraudsters. The mafiosi, heads of state, dictators, or ordinary citizens, to all its customers. HSBC offers numbered anonymous accounts and provides turn key shell companies to evade the laws. The only condition, customers must deposit

at least one million Euros. - [Narrator] Wealth managers operate at the heart of this vast network. They're the special envoys of the bank to the four corners of the world responsible for attracting customers and repatriating funds to Switzerland. - [Narrator] HSBC laundering is methodically organized. Clandestine operations are the subject of internal reports, archived in the bank's Swiss safes. - [Man] This customer forbids us to contact him in Belgium. It is always he who calls us. He comes under the name of a footballer, Zidane or Cruyff, for example, who wants to know the price of caviar.

That is the total amount of his assets. - [Narrator] After the laundering case of drug money in the United States, the revelations about the tax evasion of VIPs was more unwanted than ever. HSBC becomes public enemy number one. Even the Swiss feel obliged to intervene. A raid is organized in front of the cameras. - [Narrator] The Swiss judiciary closed the investigation three months later. In exchange for its commitment to purge unwanted customers, HSBC is fined 40 million Euros. After the fine imposed by the Americans, the Swiss settled for chump change. - There will be no

lawsuit against HSBC. Nor the bankers at the court of law. In France and in Belgium, for example, ministers of justice prefer to negotiate. As for the Parisian official who had gotten too close to the fire, he is dismissed from the investigation. - [Narrator] HSBC was saved once again. The bank is no longer just too big to jail, it's influence goes beyond the financial sphere and guarantees it complete impunity. The only concession, the former president Stephen Green disappears from the picture. - You know when you were in charge at HSBC? - No comment. - Your bankers

were helping people dodge tax. Why did you let them do that? - As I think I've explained, I'm not prepared to make any comments on HSBC's business past or present, I'm sorry. - I know, but you sort of have to because at the time. - [Narrator] The former model banker who was to reconcile finance and morality, is now tracked as a fugitive. - After all that had gone on at HSBC, you then got promoted to the government, you must have been amazed. - You need to talk to HSBC, I'm sorry. - One word, sir. Any

word? Anything you can say that defends what happened? No word. - Reverend Stephen Green, Lord Stephen Green, a pillar of the UK establishment. I met him a couple of times and both times he gave me the impression of a man who wasn't happy being in the limelight, prefers to lurk in the shadows. Slightly a manipulator, maybe even Machiavellian in his character. - How much did you know about the secret bank accounts at HSBC? I think the country demands an answer to that not simply the people in this church. - Lord Green had presided over HSBC

when they had acquired the Swiss branch. He knew all that and what was particularly awful about Lord Green was of course that he had been appointed by David Cameron to be a trade minister. I thought this was absolutely shocking and I thought he should come and give account of himself to my committee but this is one of the few times when politics trumped. - [Narrator] The matter is political. Stephen Green, the former Secretary of State can bring down David Cameron's government. - Does the prime minister expect us to believe that in Stephen Green's three years

as a minister, he never had a conversation with him about what was happening at HSBC? - My responsibility is the tax laws of this country and no one has been tougher. This government has been tougher than any previous government. That's why they're desperate, that's why they're losing. - [Narrator] Some parliamentarians refused to bury the case and prosecute the bank. But no investigation will be launched, neither by the tax authorities, nor by the British courts. The elected officials will have to content themselves with hearing from the leaders of HSBC. And it's the turn of the new

boss, Stuart Gulliver, to begin the series of auditions. - So, I have made substantial changes which hopefully we'll get the chance to explain to you all. - [Narrator] Three years after Washington, the same scenario with the same script is being replayed in London. - I'd like to put on the record an apology from both myself and from Douglas for the unacceptable events that took place at our private bank in Switzerland in the mid 2000s which is clearly an apology we'd like to make to you all, to our customers, to our shareholders, to the public at

large. - You do understand how this looks today? - [Narrator] The example comes from up high. The manger himself received his bonuses on an account in Switzerland, managed by a ghost company based in Panama. - He had family here, he was born here, he sent his children here, he worked from here, he voted here, and yet because he claimed that his residence was in Hong Kong, he didn't pay British tax. And when we asked him why don't you pay the proper tax, his reply was quite interesting. He said he didn't want other people in the

bank to know how much he earned. - So, it was set up for reasons of privacy and no nefarious reasons whatsoever. - How much did you put into the Panama account? - Seven and a half million US dollars. - Stuart Gulliver was one of the best paid investment bankers in the world. I think that tells you that he really cares about money. - Mr. Gulliver, we'll get on a lot faster if you give a straight answer to a straight question. Do you agree with me, it's caused reputational damage to the bank? - Yes. - [MP]

Are you the appropriate person in those circumstances to remain as the Chief Executive Officer of HSBC? - I believe I am because my tax affairs are in order. - [Interviewer] He said he couldn't understand why the question was so aggressive? - Yeah, it just shows you I suppose that bankers of his generation who grew up as investment bankers in the pre-crisis world were living in a bubble. When they are face to face with parliamentarians they sometimes get exposed for living in those bubbles. - [Interviewer] Has Gulliver changed? - I don't think Stuart Gulliver can fundamentally

change. - [Narrator] HSBC and its leaders are forever untouchable. The largest employer of this city, the pillar of the British economy, the bank imposes its own rules. At the time of the first revelations of the Swiss Leak scandal, it could count on the censorship imposed by the conservative daily newspaper The Daily Telegraph. Its editor in chief resigns and publicly denounces the influence of HSBC. - [Man] The Telegraph's recent coverage of HSBC amounts to a form of fraud on its readers. It has been placing what it perceives to be the interests of a major international bank

above is duty to bring the news to Telegraph readers. There is only one word to describe the situation, terrible. - [Narrator] HSBC is exploiting its advantage. It threatens to free itself from the control of London and to repatriate its headquarters to Hong Kong. Its protector, George Osborne, is still Chancellor of the Exchequer. And in addition to granting tax advantages, offers to fire Martin Wheatley, the managing director of the financial services authority and a long time opponent. The bank backs down from moving. - One of the ministers once said to me in a corridor in the

middle of these hearings, do you realize that what you're doing is putting them off from coming to the UK? And I laughed because I thought he was joking. And then I realized he was serious. - [Narrator] The Swiss Leaks scandal was the last chance to sanction HSBC's practices. The authorities preferred to delegate to the bank the power to control itself. It has since recruited 9,000 people tasked with identifying suspicious transactions and to denounce them internally. Case closed. The banksters say that they've changed. - I've been involved in financial market regulation for decades. I've heard this,

ah, that was in the past, that was 10 years ago. Now 10 years ago, I heard HSBC saying that was in the past. And yet scandals that have emerged show that their claims 10 years ago were hollow. At this stage, I don't believe it. I do not believe that they've cleaned their act up. - People talk about it as being a massive oil tanker, you can't change direction very easily. - Are we capable of regulating the banks properly? Of course we are. Do we want to is the really probably important question. - [Narrator] The British

government has turned the page. It has other priorities. And HSBC has other ambitions. China needs its services. Beijing wants to set out to conquer the world. - [Interviewer] Could you imagine that China might become the main shareholder of HSBC? - Yes. I would be surprised if some Chinese entities are not holding HSBC's shares today. They probably already. - Fire. - Fire. (band music) - [Narrator] At the end of 2015, the Chinese President Xi Jinping arrives in London. The United Kingdom unrolls the red carpet and celebrates the Sino British friendship with great fanfare. - Your visit

to the United Kingdom marks a milestone in this unprecedented year of cooperation and friendship between the United Kingdom and China as we celebrate the ties between our two countries and prepare to take them to ambitious new heights. - [Narrator] This new golden age makes London the base of Chinese investments in Europe. And HSBC the armed wing of Beijing to acquire high tech Western technology. The bank marks a great success in sponsoring the signing of the nuclear contract of Hinkley Point. Two of the most modern reactors built on English soil by French engineers of EDF, a

third of the project was financed by China. - [Narrator] This contract of the century is estimated at more than 20 billion Euros. - China forced the UK to okay Hinkley. Clearly their arm's been twisted very, very strongly by Chinese financial heft which threatens to withdraw significant investment in the UK if the deal doesn't go ahead. The UK has agreed a deal that nobody else would agree to. Essentially this was a political decision to substantiate UK's economic ties with China as almost a symbolic decision. - [Narrator] By yielding their energy ply to the Chinese, the British

leaders have renounced part of their national sovereignty. And behind the scenes, HSBC is omnipresent. It advises EDF, defends the interests of Chinese shareholders, and passes billions of Euros from Beijing through its accounts. - HSBC helps because you need a bank on the ground in order to facilitate transactions. There's funding agreements, there's raising money, there's bonds, and there's ways to do that that are, need to be incorporated through a standing major bank and that has been HSBC for China. - [Narrator] The nuclear power stations of Hinkley Point are part of the great Chinese projects called the

New Silk Road. A kind of Marshall Plan launched to multiply trade between Beijing and the rest of the world. Construction of roads, railroads, ports, nothing is overlooked to promote goods made in China and to increase the strength of the new emperor Xi Jinping. - But there's one key problem here, nuclear is different. Nuclear is different from other market forces, other forms of energy, and other financial deals. There is no country in the world, including America, who would allow China into its key nuclear energy infrastructure so it is astonishing that China will be allowed access to

this key sensitive network. - [Narrator] The century of China has begun and HSBC changes masters. The former bank of the traders of opium, formerly in the service of Her Majesty, now operates under China. It must help the communist regime realize its dream. To become in turn a giant of the financial world. The Beijing executives learned a lesson from the financial crisis of 2008. They no longer want to rely on the dollar and the crazy bets of Wall Street traders. - China is not yet a super power, economic power for the simple reason that it doesn't

have a financial sector and it doesn't have a currency which reflects this influence and this standing in the world. And so it is essential to somehow close the gap and for China to have a currency that can be used in its trade and a currency that can be used also in its investment abroad. - What they really want is a world in which the dollar isn't so dominant and so in that sense London can play as it is doing an important role in the trading of Chinese currency, the RMB, and a big role for Chinese

involvement in international finance. - [Narrator] To dethrone the dollar king, China must have its currency, the yuan, accepted as the currency of reference in international trade. Beijing lags behind others. Its currency of the people is virtually unknown in the markets. - HSBC is one of the world's leading foreign exchange houses and HSBC has a very strong position in the currency markets in Hong Kong as well as London and as a result, HSBC is a very natural bridge between China and the city. - [Narrator] HSBC is the first born bank to convert the Chinese currency. The

great works of the Silk Road financed in yuan serve as a Trojan horse to impose its currency on the international scene. HSBC is making its next move to become the pipeline of Chinese capital invested in London. 40 years after the oil dollars of the Gulf, it's the billions coming from Beijing that make the city's mouth water. And it's the finance minister, George Osborne, HSBC's best friend, who is still wielding the controls. - More trade, more investment with China means more business and more jobs for Britain. - [Narrator] The minister has especially relaxed a regulation to

accommodate Chinese capital. It is the last stage of a high risk policy that opens the doors of international markets to a financial world led by Beijing. - Chinese money is the black hole of black holes within the global financial system. We have a sense of how much Chinese money might be out there, we have a sense of how much might be leaving China, but we've only seen small snippets of that from Swiss Leaks and from the Panama Papers. - There's a massive amount of work to be done in China to make the financial system and

the banks more robust. And when I say robust, means a system that is able to withstand the movement of capital. So capital in and capital out, inflows and outflows. And the government doesn't know how to manage this flow and regulate and that is the fundamental problem and that could lead to even some kind of crash. - As you have firms of the stature and the size of HSBC marrying up with rising Chinese banks that are now so huge it's a recipe for potential disaster. - [Narrator] 10 years after the crisis, financial stability is an illusion.

By helping China become the world's banker, HSBC has created a new threat. So far, Beijing has always managed to contain its financial crises within its borders. But today the banksters have taken down the firewalls. And with the first spark the fire will spread to the West and in the face of the impotence of the states, it is again the people who will pay the bill.