
Widening Russia Money Laundering Scandal Hits European Banks - chollida1
https://www.bloomberg.com/news/articles/2019-03-05/dirty-money-scandal-widens-with-reports-on-nordea-and-lithuania
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chollida1
I'm following this story more to see how countries answer the question of...

How do you punish a big firm that your country deeply depends on?

Canada is going through this now with a major construction company SNC Lavlin,
that seems to be guilty of using bribes in Lybia.

The Canadian government seems to have interfered with their court case for
what could be seen as "good intentions". If proven guilty SNC could n o longer
bid on Canadian government contracts and this would hurt alot of large
infrastructure projects in Canada, as well as the 8000+ jobs in Canada that
had nothing to do with the bribes.

Germany is doing something some what with Deutsche Bank, a bank plagued by
scandal and fines but one that is a critical part of the German financial
infrastructure.

So how do you punish these banks and not hurt the 10,000+ workers who had no
part in this while or harming your economy?

Seems like one answer is to go after the C-Suite executives.

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derefr
If the company is big enough, I’d suggest splitting the company (as if as the
result of an anti-trust proceeding), taking the fragment of the resulting
company that the govermnent depends on for services and _nationalizing_ just
that part; and then throwing the _rest_ of the company—the part that the
government now explicitly doesn’t depend on—to the wolves, by allowing the
case against it to proceed.

Basically, rather than protecting the whole just because some part of it’s
necessary for you, just pluck that part out and keep it for yourself.

~~~
Fjolsvith
This policy would greatly incentivize companies to behave.

~~~
VBprogrammer
The danger is that it would also greatly incentivise governments to misbehave
though, right?

~~~
close04
Perhaps we should look at the people rather than the companies or governments.
Narrowing down the blame would prevent future executives (and rogue engineers
/s) from being too comfortable under the cloak of "the company" when taking
such initiatives.

Volkswagen didn't cheat on emissions tests, specific people knowingly lied and
cheated to get to achieve their goals. And while the company should be allowed
to pay back all damages in a fashion that does't cripple it entirely, those
people responsible for the decisions should not be given this privilege. I'm
sure there are equitable options in this regard. Of course none of them would
ever apply to those people since surely they put all that money to "good use".

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mihaifm
What's funny is that all these banks have mandatory anti-money laundering
training courses that are enforced down the hierarchy to developers, IT staff
and even call center operators, while most of the fraud is done at the top
tier with the consent of high ranking managers.

~~~
Krasnol
I always felt like those were done for two reasons:

1) tell your clients/press that you have them

2) if you get caught tell you "we've told you not to do it. we're at no fault
here"

From my personal experience they are not being taken serious if the client is
important. Or are being taken serious in a way that you have people who help
you out with that kind of shady business stuff.

~~~
mannykannot
The second part of item 2 is that you then set up the incentives in such a way
that some of your minions will choose to break the law (and hide it from you)
without being explicitly instructed to do so.

~~~
tristor
Plausible deniability is the first step to creating a criminal empire where
you don't get caught. Anyone who has ever seen The Wire already knows where
this ends up.

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samsonradu
For anyone interested in how (dirty) big money moves around the world in our
current financial and legal framework, the “Billion Dollar Whale” book
provides a very interesting insight.

A fascinating read of fraud at the highest level.

[https://www.goodreads.com/book/show/38743564-billion-
dollar-...](https://www.goodreads.com/book/show/38743564-billion-dollar-whale)

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ttul
Imagine if the mafia ran an entire country.

~~~
cpursley
A state is not all that different than a mafia (monopoly power). Try not
paying your dues.

~~~
braythwayt
This is a false equivalence.

To paraphrase Erik Naggum, you are emphasizing the things that states and
criminal enterprises have in common that are not important, while ignoring the
ways in which they differ that are important.

It's true that a state has a certain monopoly on governance. But it is not
true that states and the mafia are not all that different.

~~~
Sharlin
It’s literally called ”the worst argument in the world”!

[https://www.lesswrong.com/posts/yCWPkLi8wJvewPbEp/the-
noncen...](https://www.lesswrong.com/posts/yCWPkLi8wJvewPbEp/the-noncentral-
fallacy-the-worst-argument-in-the-world)

~~~
braythwayt
Please accept all of my upvotes, this is the first time I am learning about
“The Noncentral Fallacy.”

Thank you.

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Tsubasachan
It always baffles me how the people who can't stop critiquing Western European
civilisation end up hiding their money here. Must be doing something right.
Patriotism isn't about waving the flag, beating up foreigners and singing the
national anthem- its about paying your taxes. Which amusingly none of the
Russian elite seems particularly interested in.

~~~
rchaud
> It always baffles me how the people who can't stop critiquing Western
> European civilisation end up hiding their money here.

It's about as baffling as when governments that constantly criticize others
for violating human rights have no problem selling weapons to those exact same
parties, and letting their oligarchs/royal family/well-connected goons buy up
expensive properties inside of their own borders.

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kileywm
I was just wondering if a whistleblower program that rewards credible
whisteblowing with a portion of the fine exists and it does!

[https://www.whistleblowersinternational.com/what-is-
whistleb...](https://www.whistleblowersinternational.com/what-is-
whistleblowing/rewards/)

There aren't many famously-rewarded whistleblowers, and of them, banking seems
to be a rarity (except for Deutsche Bank), but it's certainly an interesting
concept. Effective? Time will tell.

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AzzieElbab
This is the way modern Russia works. Troika is probably one of a cleaner
financial institutions there, but they have to service the ruling class just
like everybody else

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onetimemanytime
question: say Russians want to launder $10B. Banks help them. What is the %
today to launder money? And how much would banks keep?

I am surprised execs would risk jail, fines, lifetime job loss unless they
would profit handsomely. Maybe they can get paid on the side for such deals? I
get the bonus payments from the bank but still...

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binarymax
But they don't risk any of those things. Aside from Iceland can you mention a
bank where their execs did jail time in the past 10 years for the shenanigans
that have come to light? HSBC was caught red handed laundering money for drug
cartels and I think maybe there were some fines? None of them went to jail.

~~~
onetimemanytime
still, how much will the bank get on fees and what % does trickle to C-level
execs? I mean still the reward can't be that great (relative to their existing
wealth /salaries

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imnotlost
In reality, a liberal bribing policy to get business done, to protect profits
and increase margins, along with a solid policy to push wages down and reduce
the workforce is what's best for every country... at least for the ones who
pull the strings in said country.

