- [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.
