Standard Chartered accused of over $250bn of illegal transactions to Iran

"You fucking Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?"

Standard Chartered, the British bank, stands accused of having run a major operation to facilitate money transfers in and out of Iran, in violation of American sanctions against the company. The amount of money it is thought moved totals $250bn, and would have earned Standard Chartered millions in fees.

The New York department of financial services said in a statement that:

Motivated by greed, [Standard Chartered] acted for at least ten years without any regard for the legal, reputational, and national security consequences of its flagrantly deceptive actions.

The full complaint claims jaw-dropping levels of arrogance on the part of the bank. When London was informed of concerns by the head of American operations that US law was being systematically broken, the group director replied:

You f---ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?

In order to facilitate the trades without being found out, the banks employees had to strip the information that the trades were coming from Iran out of the wire transfer. And when volume grew too high to manage, they automated the systems:

When SCB anticipated that its business with Iranian Clients would grow too large for SCB employees to “repair” manually the instructions for New York bound wire transfers, SCB automated the process by building an electronic repair system with “specific repair queues,” for each Iranian Client.

Once the bank realised that the heat was on, it started getting even more tricksy. It asked its auditor, Deloitte, to delete any mention of the activities from its report:

Having improperly gleaned insights into the regulators’ concerns and strategies for investigating U-Turn-related misconduct, SCB asked D&T to delete from its draft “independent” report any reference to certain types of payments that could ultimately reveal SCB’s Iranian U-Turn practices. In an email discussing D&T’s draft, a D&T partner admitted that “we agreed” to SCB’s request because “this is too much and too politically sensitive for both SCB and Deloitte. That is why I drafted the watered-down version.”

And eventually even moved their compliance department to India to forestall the regulators:

Outsourcing of the entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices.

What's really scary is that even the "good guys" - the people at Standard Chartered who were raising questions - reveal breathtaking attitudes towards breach of law. The head of American operations, who first told London of his concerns, is quoted as writing:

Firstly, we believe [the Iranian business] needs urgent reviewing at the Group level to evaluate if its returns and strategic benefits are . . . still commensurate with the potential to cause very serious or even catastrophic reputational damage to the Group. Secondly, there is equally importantly potential of risk of subjecting management in US and London (e.g. you and I) and elsewhere to personal reputational damages and/or serious criminal liability.

Reread that first point. He is not saying "we have broken the law, and need to stop", but instead "we have broken the law, and need to review its returns and strategic benefits to make sure it's worth doing". That is evidence of internalised corruption to a worrying degree.

The bank itself rejects "the position and portrayal of facts made by the New York State Department of Financial Services", according to its statement. Its major position is that the vast majority of its transactions to Iran were legal, and the the DFS has misinterpreted a point of law. It claims just $14m worth of transactions broke the regulations, and that it brought those to the regulator's attention as soon as it knew.

Standard Chartered had been one of the banks which made it through the crisis relatively unchanged. That looks set to change now.

Standard Chartered faces severe allegations. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Labour MPs believe Jeremy Corbyn is incapable of tackling anti-Semitism

The leader's insistence that "there's no crisis" has led more to conclude that he must be removed.  

In a competitive field, yesterday was the most surreal - and shameful - day for Labour since Jeremy Corbyn became leader. After a telling delay, Corbyn arrived at the only response that was acceptable to MPs: the suspension of Ken Livingstone. The former mayor of London, who appears incapable of entering a studio without triggering outrage, surpassed himself by claiming Hitler supported Zionism (as if to invalidate the latter). In time-honoured fashion, he then responded to criticism by pouring petrol on the fire. In remarks that caused journalists to question their hearing, Livingstone opined that "a real anti-Semite doesn't just hate the Jews in Israel". 

Two hours later, one of Corbyn's greatest allies was finally suspended (the day after Naz Shah MP had been). But the announcement itself added new offence. The email confirming Livingstone's suspension simultaneously revealed that John Mann MP, who had denounced the former mayor as a "Nazi apologist", had been summoned by the chief whip to "discuss his conduct" - as if their behaviour was somehow comparable. Labour sources later told me that Corbyn's office had wanted to go further and suspend Mann - a demand flatly rejected by the whips. Their resistance has revived the desire among some of the leader's allies for a cull in a future reshuffle. 

But it was Corbyn's conduct in a BBC interview that truly provoked MPs' fury. "It's not a crisis, there's no crisis," he declared, unwittingly echoing the Sun's headline on Jim Callaghan during the Winter of Discontent ("Crisis? What crisis?"). It was as if Hitlergate had never happened. Corbyn added that "the party membership is the biggest it has been in my lifetime" (it was actually higher in 1997) and that "much of this criticism that you are saying about a crisis in the party actually comes from those who are nervous of the strength of the Labour Party at local level". MPs, he appeared to suggest, were not motivated by a desire to repel Labour's anti-Semitic infection but by fear of the party's left-wing membership.

Livingstone's suspension was "very sad", Corbyn said, but "there is a responsibility to lead the party". The abiding impression was that he had suspended his old comrade with the utmost reluctance - it was the burden of office that had forced him to do so. Finally, Corbyn declared, as he always does on these too-frequent occasions, "we are not tolerating anti-Semitism in any way or indeed any other kind of racism." Labour's leader appears congenitally incapable of condemning Jew-hatred in insolation. The explanation, some MPs say, is that he subscribes to a "hierarchy of racism" under which anti-Semitism is a lesser offence than, say, Islamophobia. In rejecting a systematic focus on the former, Corbyn's critics say he is in denial about the scale and significance of the infestation.  

His apathy has intensified the desire of his opponents to remove him before the year is out. "The soft left moved massively today," one MP told me in reference to Labour's internal swing voters. Another said: "It does two things: it firmly pins responsibility for next week's results on the hard-left antics [Labour is forecast to become the first opposition since 1985 to lose council seats in a non-general election year] and it weakens the willingness of the 'core group' servers to keep mopping up after Corbyn because they are increasingly mortified by the association". But others disagreed: "It's strangely less likely," one said of the prospect of a challenge, "the mood is 'keep giving him the rope'". Another said that Labour MPs, traditionally sentimental towards their leaders, lacked the "constitution" for the struggle. "They can always find an excuse why now isn't the right time," he lamented. Without an agreed candidate, and without even agreement on whether there should be a challenge, Corbyn's opponents fear that "even worse is to come". 

George Eaton is political editor of the New Statesman.