Former Deputy AG Jim Comey Joins HSBC Board, to Help Right the Ship
By Douglas Gillison | March 15, 2013 6:39 pm

As part of efforts to repair the company’s tattered image, the British banking giant HSBC Holdings plc this month added former Deputy Attorney General James B. Comey to help oversee efforts to combat financial crime.

Comey joins the company as it continues to await a judge’s approval of a record $1.9 billion settlement in December for widespread money laundering and sanctions violations which met with a scathing reception for failing to impose any criminal sanctions beyond a fine.

Former Deputy Attorney General James Comey (Getty)

Comey, who served as deputy to Attorney General John D. Ashcroft from 2003 to 2005 and as U.S. Attorney for the Southern District of New York from 2002 to 2003, became an independent, non-executive director on March 4 and is now one of three members of the board’s Financial System Vulnerabilities Committee.

The committee was created after the December settlement as part of changes to the bank’s structure to improve its legal compliance. Other members include Group Risk Committee Chairwoman Rona Fairhead, the CEO of The Financial Times Group; and Deputy Chairman of the Board Sir Simon M. Robertson.

Juan C. Zarate, former deputy national security adviser under President George W. Bush, is among the subject matter experts advising the new vulnerabilities committee.

Rob Sherman, a spokesman at the bank’s New York offices, said the committee’s creation and Comey’s appointment were meant “to help us achieve, as we’ve declared we’re going to, the highest standards in fighting financial crime.”

“We’ve relied upon independent, non-executive directors to help us get there, ” said Sherman.

According to Sherman, the creation of the new financial system vulnerabilities committee was part of the commitments the bank made to the U.K. Financial Services Authority (which is due to replaced by two new regulatory bodies next month).

“But it’s something we’d been considering for some time. The FSA was certainly keen that we do so,” he said.

Other former U.S. government officials retained by HSBC in the wake of the money laundering scandal include Stuart Levey, the former Treasury undersecretary for terrorism and financial intelligence who is now HSBC’s global chief legal officer; Preeta Bansal, the former general counsel to the Office of Management and Budget who is now global general counsel for litigation and regulatory affairs; and Bob Werner, the former director of Treasury’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control, who is now head of group financial crime compliance and is group money laundering reporting officer.

David Hartnett, former secretary for tax at Britain’s Revenue & Customs, and William F. Hughes, former director general of Britain’s Serious Organized Crime Agency, were also reportedly retained as advisors.

But beefing up the company’s compliance team with marquee names did not appear likely to appease critics of the HSBC settlement.

“What happens to the people who actually made the bad decisions that got us where we are now?” asked Stefanie Ostfeld, senior policy advisor at Global Witness. “When there are no consequences for getting it wrong, there are no incentives for complying with the law.”

“In the most egregious examples, like what we’ve seen with HSBC, there need to be criminal indictments.”

Comey achieved fame in the final years of the Bush administration after details emerged about his role in a 2004 hospital room confrontation to block attempts to reauthorize an illegal domestic surveillance program.

Comey testified before the Senate Judiciary Committee in 2007 that he and FBI Director Robert S. Mueller III had raced to Ashcroft’s bedside to head off Alberto R. Gonzales, then the White House Counsel, and Andrew H. Card Jr., then the White House chief of staff, who were seeking Ashcroft’s signature for permission to continue the program despite a Justice Department determination that it was illegal.

Comey and Mueller arrived moments before Gonzales and Card, who were told by Ashcroft, then in intensive care, that he would not sign.

Comey’s name was again in the news this week as a Rep. Frank R. Wolf (R-Va.) publicly suggested Comey be appointed to conduct a 60-day review of the Justice Department’s Civil Rights Division, which was subject to damning criticism by the Inspector General’s office. Efforts to reach Comey were unsuccessful.

Subject to reelection by shareholders, Comey’s term is due to expire in 2016. As a non-executive, Comey will be paid an annual fee of $144,000 and a $45,000 annual fee for membership in the vulnerabilities committee.

Comey’s joining of the board coincided with more bad press for HSBC after it emerged that the new Chief Executive Stuart Gulliver would receive a $3 million performance bonus for 2012 — the year the company confessed to widespread criminality and saw its chief compliance officer, David Bagley, resign at a Senate hearing.

Comey is currently also a visiting scholar in national security law at Columbia Law School. Until last year, he served as general counsel to the investment company Bridgewater Associates and prior to 2010 was general counsel at Lockheed Martin Corp.

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