Published on January 26th, 2011 | by Ali Gharib8
Jen Rubin vs. HSBC
Only 4% of American films are made by women. In Iran it’s 25%.
Pollak tweeted the picture, adding that the ad was “truly outrageous.”
The ad was quickly picked up by a writer at the neoconservative flagship Commentary and then by Washington Post blogger Jennifer Rubin. Since then, Rubin has been on a crusade against HSBC. But her rhetoric against the bank has been over-heated, occasionally veering off towards misrepresentation of facts.
Rubin has come to be known for her dishonesty. When she called blogger and think tanker Steve Clemons an “Israel-basher” recently, he said it was an “insidious character attack,” a “sliming” that insinuated anti-Semitism. She’s left critical context out of stories, and has been caught publishing misleading distortions of answers from an interview with an Obama administration official.
In the case of HSBC, she has relied on an admittedly long list of circumstantial evidence to support her arguments. The problem is not that she raises this evidence to ask questions, but rather that she offers definitive assessments without backing them up.
Take, for example, Rubin’s admission that she had no specific knowledge about HSBC’s operations inside Iran. “It is not clear precisely what business activity HSBC continues to conduct in Iran,” she wrote. “What we do know from SEC filings is that the bank maintains an office in Iran.”
By the end of her article, however, Rubin addressed HSBC’s business in Iran with searing certainty, writing that the bank “continu[es] to do business with a murderous regime.” Nonetheless, the story, built on her own conjecture, was shortened and published in the print edition of the Washington Post. Worst of all: in the shorter version, Rubin’s conjecture was presented as fact.
Rubin did make a case, using many hints of malfeasance — though none provided concrete evidence of either HSBC misconduct or of the bank doing business with the Iranian regime.
The first examples Rubin points to are that the Justice Department initiated an investigation into HSBC and that the bank had hired Deloitte to look into transactions. She went on, in the web version of the article, to mention actions taken by regulators against HSBC:
And the Federal Reserve Bank of Chicago and the Office of the Comptroller of the Currency issued a “cease and desist” order to HSBC’s North American unit in October, ordering the bank to enhance its risk management procedures.
Rubin didn’t acknowledge that the hiring of Deloitte, according to the Financial Times article she links to, was exactly the result of the very regulatory moves she’s referring to.
The two “cease and desist” orders (contra Rubin, there were two, issued concurrently and in coordination) didn’t actually state a case or present any definitive evidence. Rubin quotes the order (PDF) from the Office of the Comptroller of the Currency (OCC) like this:
Regulators found that the bank’s compliance program was ineffective and created “significant potential” for money laundering and terrorist financing. This opened HSBC to the possibility that it was conducting transactions on behalf of sanctioned entities.
The first sentence here is close: The order says that the bank’s lax risk assessments created “significant potential for unreported money laundering or terrorist financing.” But the second sentence seems to be pure extrapolation on Rubin’s part, though it becomes the crux of her evidence for making the “business with a murderous regime” accusation.
In the print edition of the paper, the accusation went from being extrapolation to fact — that the OCC was making accusations specifically about “sanctioned entities.” The story, on page A15 of the December 27 Post, read, with my emphasis:
And the Federal Reserve Bank of Chicago and the Office of the Comptroller of the Currency issued a “cease and desist” order to HSBC’s North American unit in October, having found that there was “significant potential” the bank was conducting transactions on behalf of sanctioned entities.
In reality, neither order mentions Iran or sanctions, let alone lays out any evidence about business with “sanctioned entities.” The OCC order does, however, mention inadequate monitoring of associates of “politically-exposed persons (PEPs),” which usually indicates foreign officials but has been expanded in the OCC order to include “former senior foreign political figures, their families, and their close associates.” But, once again, inadequately monitoring is not the same as “continuing to do business” with someone.
I asked a spokesperson at the OCC if the order implied that HSBC had conducted such business with the Iranian regime. “Under the law, we’re required to make public enforcement orders,” the spokesperson, Kevin Mukri, told me. “But we can’t comment on anything further than that, which puts us in a bind. The order has to be self-explanatory.”
Mukri referred me to the Financial Crimes Enforcement Network, the Treasury Department’s liaison to law enforcement, which declined to offer comment for this story.
I asked Mukri if he or, to his knowledge, anyone from OCC had spoken to Rubin on background, or deep background, which would have allowed her to make such accusations without referring to sources. At first, Mukri said that, even if he had spoken to Rubin, he wouldn’t tell me, but then quickly denied having done so or knowing of anyone who had. He explained that speaking about the orders, beyond their content, would be a violation of laws governing the office’s conduct. “It’s something we don’t do as an agency,” he told me. “I’ve been here for 14 years and don’t know anyone who’s done that, ever.”
Rubin also mentions that two members of Congress recently sent letters about regulations relating to sanctions on Iran:
Moreover, Rep. Frank Pallone (D.-N.J.) recently wrote to Federal Reserve Chairman Ben Bernanke calling for increased enforcement of prohibitions on banks and other financial institutions doing business with Iran, and citing HSBC as an example of part of the problem. Rep. Joe Baca (D.-Calif.) sent a similar letter.
I was curious about the mention of HSBC in the letter by Rep. Frank Pallone (D-NJ) to Federal Reserve Chair Ben Bernanke, but his office did not supply the text of the letter following repeated inquiries. Pallone does mention HSBC in the press release for the letter.
The link Rubin supplies for the Pallone letter, however, is from Grendel Report, a blog dedicated to “cutting-edge open source information on terrorism and the Islamic threat” (note the absence of the word ‘radical’ there). The Grendel story, in turn, is attributed to Geostrategy-Direct, a newsletter operated by the World Tribune, a website that says it “tend[s] to reinforce the Judeo-Christian values” and brags about a mention from right-wing radio host Rush Limbaugh for definitively connecting Iraq and al Qaeda and proving the existence of Iraqi weapons of mass destruction. (One must excuse me for being skeptical of these sources.)
The office of Rep. Joe Baca, the other member of Congress mentioned by Rubin, similarly declined to supply me with a copy of his letter, and no press release exists. So Rubin’s word that it was a “similar letter” will have to stand on its own. The reader is unable to know if the letter mentioned HSBC.
In the print edition, however, the two examples are conflated. Baca’s letter is no longer “similar,” but now also definitively cites HSBC:
Two members of Congress have written to Federal Reserve Chairman Ben Bernanke urging stronger controls on back activities citing HSBC as an example.
The online version of the piece by Rubin contained one more distortion. This one came to Rubin via e-mail from former AIPAC spokesperson Josh Block. Block wrote to her that “the regime in Tehran is the leading human rights violator and state sponsor of terror in the world.” The second bit, on terror, is the same pro-forma language that the State Department uses. But the first part — that Iran “is the leading human rights violator… in the world” — is a tough assertion to back up. I e-mailed and called Block several times for comment, suggesting that he soften the statement by saying Iran is ‘one of the leading…’. Block never responded.
The charge, nonetheless, was a particularly troubling one coming from advocates of Israel who constantly say that the Jewish state is being singled out. And even more troubling coming from Block, whose business partner Lanny Davis was, at the time Block made his comment, working for the Ivorian dictator responsible for the killing of more people in post-election violence than Iran’s leaders were during its own election aftermath (according to the UN).
But Rubin’s eagerness to paint all involved with Iran as a force for evil is not surprising. A U.S. attack on Iran has long been a priority for Rubin, who wrote from her former home at Commentary last September that such a move was the “best of disagreeable options.”
What is surprising, though, is that the Washington Post allows reports to go to print with serious allegations that seem to be based on little more than the combination of circumstantial evidence and conjecture.