18.10.2016 Author: Grete Mautner

For How Long Washington has been Engaged in Witch-Hunting for Profit?

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With the US general government debt at 108% of GDP,which constitutes the whooping sum of 19.5 trillion dollars, most people will find it hard to comprehend this sum.

It’s larger than the 500 largest public companies in America, it’s 25 times larger than all global oil exports in 2015, in fact, it exceeds all of the world’s physical currency, gold, silver, and bitcoin combined, since the total worth of the latter hardly exceeds 12.7 billion dollars.

Therefore, debt servicing has become one of the major headaches of the every single US administration a long while ago, especially when you consider the fact that the debt keeps growing rapidly due to the military interventions Washington has been perpetually engaged in since 2001. According to various estimates, the total US budgetary cost of war since 2001 is 4.79 trillion dollars.

It’s comes as no surprise that against this background the White House has been using the so-called sanctions and penalties as a means of attracting additional incomes, by pushing foreign companies and banks out of the markets that they used to occupy. A series of legal proceedings against leading international banks that Washington has been engaged in in recent years was designed to present the non-existent “Obama’s economic genius”.

And beat goes on, since there’s been virtually no cases of federal prosecution of major financial players in the United States before the crisis of 2008, but then this major financial meltdown made Washington a witch-hunter of enormous proportions, that does not simply prosecute private companies, by allows private lawsuits to follow this process.

Since 2009, there’s been a total of 188 pre-court settlements with major financial players in the US, with the total sum of 219 billion being forwarded to the government, the investment bank KBW reports. Another 278 cases are in the process of being settled. Moreover, a total of eleven companies paid fines that are larger than 10% of their market capitalization, while a sort of a “record” has been set by the Bank of America that spent more than 50% of its market value (77 billion dollars) to settle a lawsuit.

In August, Barclays Bank agreed to pay 44 US states 100 million dollars as a compensation for its alleged manipulation with LIBOR. Prior to this, the Federal Reserve announced that it’s going to hit Goldman Sachs with a fine of 36 million dollars for the unauthorized use of confidential information.

Even though JPMorgan Chase has confirmed its willingness to pay 200 million dollars to settle corruption charges, it’s too early to say that the Wasll-Street is backing up. Nearly a dozen of major American banks are negotiating settlements for alleged manipulations with exchange rates and alleged violation of the fiscal discipline.

In the coming days, the largest US bank JPMorgan Chase will have to reach an agreement with the US Securities and Exchange Commission (SEC) and the Federal Prosecutor’s Office in Brooklyn. It will put an end to the charges of its continuous violations of the Foreign Corrupt Practices Act (FCPA), which prohibits American companies from bribing foreign officials in order to gain a competitive advantage. Those charges were brought up against the bank back in 2013.

In fact, JPMorgan Chase Bank is accused of hiring children of senior Chinese officials in exchange for lucrative contracts on local markets. From 2004 to 2013, the investment bank was actively working with Chinese companies, helping them to obtain the IPO. However, the story took a different turn once the US authorities startied investigating the hiring of 222 foreign employers by this bank. A half of them was recommended by the representatives of the Chinese government, financial regulators, top executives of state companies and regional officials .

Chinese officials who are being accused of referring candidates to JPMorgan include China Banking Regulatory Commission Vice Chairman Guo Ligen; Minister of Public Security Guo Shengkun; People’s Bank of China Vice Governor Pan Gongsheng; the chairman of state-owned grain trader Cofco Corp., “Frank” Ning Gaoning; and a senior executive at state-owned shipping giant Cosco Group, Sun Jiakang. Beijing has already started investigating the activities of a number of its officials in connection with this scandal, which only benefits Washington since it undermines China’s credibility.

According to the released information, JPMorgan Chase will be forced to pay 200 million dollars in fines, which is a considerable sum for this bank. Previously, pro-Western companies only paid a couple million dollars in fines, except for Hewlett-Packard that ettled a wide-ranging bribery case under the FCPA for 108 million dollars, while in January 2014 Alcoa Inc agreed to pay 384 million dollars to resolve charges of bribing officials of a Bahraini state-controlled aluminium smelter.

Typically, America’s law enforcement officers would use the FCPA provisions against foreign companies that are operating in the US market. Washington has already “robbed” German Siemens in 2008 (800 million dollars paid), VimpelCom in 2016 (395 million dollars) and the French Alstom in 2014 (772 million dollars).

It’s been reported there’s a number of ongoing investigation of JPMorgan Chase activities launched by a number of financial regulators.

Analysts are pointing out that the British HSBC and the German Deutsche Bank are also going to come under fire for similar hiring policies in China. These banks have already confirmed the fact of the US Department of Justice investigation being launched again them. This creates a precedent not only for the punishment of other large banks for similar violations, but also provides Washington with a propaganda tool against China.

Grete Mautner is an indepenent researcher and journalist from Germany, exclusively for the online magazine “New Eastern Outlook.


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