By Don Quijones, Spain & Mexico, editor at WOLF STREET.
“Banks are the feudal knights of today’s world,” Hervé Falciani says in an interview. “They are a power without a counterweight, without opposition.”
That is not to say that they don’t have a weak point, adds the 42-year-old whistleblower who blew the lid on HSBC’s global tax evasion and money laundering practices. “For the banks, reputation is increasingly important. When they lose it, they don’t know how to get it back.”
Hence the importance of banks being able to control news at its source, as the Daily Telegraph’s ex-chief political commentator, Peter Oborne, has learned, and (to his great credit) revealed in a ball-busting exposé of his former employer’s cozy ties with the world’s second largest – and arguably most criminal – bank:
Three years ago the Telegraph investigations team… received a tip off about accounts held with HSBC in Jersey… After three months’ research the Telegraph resolved to publish. Six articles on this subject can now be found online, between 8 and 15 November 2012, although three are not available to view.
Thereafter no fresh reports appeared. Reporters were ordered to destroy all emails, reports and documents related to the HSBC investigation… From the start of 2013 onwards stories critical of HSBC were discouraged. HSBC suspended its advertising with the Telegraph…
Winning back the HSBC advertising account became an urgent priority. It was eventually restored after approximately 12 months. Executives say that Murdoch MacLennan (the newspaper’s chief executive) was determined not to allow any criticism of the international bank.
In light of the pitiful coverage the newspaper devoted to HSBC’s wide-scale tax evasion scheme – “you needed a microscope to find (it)” – Oborne resolved to bring forward his resignation as well as shine a bright light on the newspaper’s continued “appeasement” of HSBC’s demands. There were, he says, two reasons behind this decision. First, he felt he owed it to Daily Telegraph readers:
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 its duty to bring the news to Telegraph readers. There is only one word to describe this situation: terrible.
The second reason had to do with the vital role of a so-called free press in a supposedly healthy democracy:
There is a purpose to journalism, and it is not just to entertain. It is not to pander to political power, big corporations and rich men. Newspapers have what amounts in the end to a constitutional duty to tell their readers the truth.
It is not only the Telegraph that is at fault here. The past few years have seen the rise of shadowy executives who determine what truths can and what truths can’t be conveyed across the mainstream media.
This is a vital point, especially at a time of dwindling newspaper sales. With more and more media groups struggling to make ends meet in this new age of Internet journalism and plummeting advertising revenues, one can’t help but wonder just how many newspapers will soon fall under the spell or into the clutches of the big banks and corporations.
At the rate things are going, the TBTF banks will soon be the only ones left with enough resources to pay the exorbitant upkeep costs of a fully-staffed newspaper – a process that is already long under way in Spain, as I reported in May, 2013 (The Financial Takeover of “Our” Newspapers).
At the beginning of the country’s financial crisis, Spain’s biggest media group PRISA (which owns El País, the world’s most widely read Spanish-language newspaper, as well as 50% of the Spanish language version of Huffington Post) had somehow managed to rack up a debt of almost €5 billion.
With the company’s assets plunging in value, the markets closed their door on the publishing group, leaving its senior management desperately scrambling to find new money to stave off bankruptcy. At the eleventh minute of the eleventh hour, their prayers were finally answered. Unfortunately, most of that money would eventually come from the financial sector, and in particular one bank: HSBC.
As the Spanish news website Publico reports, HSBC is Grupo Prisa’s second largest shareholder (after the founding Polanco-Morena family), holding just short of 10% of the group’s shares. HSBC’s largest purchase of Prisa bonds, which were later converted into shares, took place in 2012, the year HSBC agreed to pay a $1.9 billion (€1.46 billion) fine to the U.S. government for laundering money on behalf of Mexican drug traffickers and Middle Eastern terrorist organizations.
Other prominent shareholders include banking institutions such as Santander and Caixabank, not to mention the Spanish telecommunications behemoth Telefoníca and Wall Street players like hedge fund manager Nicholas Berggruen. In other words, while Oborne complains about the influence of important advertisers on The Daily’s Telegraph’s reporting, Spain’s biggest selling newspaper is virtually owned lock, stock and barrel by the financial industry.
While El Pais’ coverage of the latest HSBC scandals dwarfs that of the Telegraph, some insiders still question the viability of the newspaper’s editorial independence. They include Enríc González, a former El País correspondent and one of Spain’s most respected journalists. Like Oborne, he renounced his job at the newspaper, publishing a blistering resignation letter in which he accused El Pais’s director (and regular Bilderberg attendee), Juan Luís Cebrían, of suffering from an incurable addiction to gambling on the stock exchange and denounced the decadence and betrayal of the country’s press.
In a newspaper like El País it is no longer possible to criticize the main Spanish banks. And you have to be very careful when talking about the Government, in case it gets angry: its benevolence is needed in order to avoid bankruptcy.
El País’s sad transformation from a potent symbol of Spain’s new age of democracy to a mouthpiece for the financial industry is far from unique: when it comes to speaking truth to power, both of a political and especially financial kind, the media is frequently gutless and ineffectual. Indeed, in many European countries it is not even possible for the public to find out who the actual owners of the media are.
If there’s to be any hope of reform and renewal of the fourth estate, a new ownership model must be found that enables financially uncompromised newspapers and broadcasters to flourish, so that a diverse and independent media can once again serve as a protection against the entrenched interests of big business, finance and government.
Meanwhile, the desertion of journalists with integrity like González and Oborne serve as a reminder that change may indeed be possible, although their brave sacrifices are all too often quickly forgotten in the mad rush for new news. Don Quijones, Raging Bull-Shit.
And this is how, with full UK-government-sanctioned impunity, HSBC Celebrates 150 Years of Banking Crime & Corruption: Happy Birthday