Article below by Tony Schwartz from the Harvard Business Review:

For more than a decade now, I’ve struggled to define what fuels the most sustainably productive work environment — not just on behalf of the large corporate clients we serve, but also for my own employees at The Energy Project.  Perhaps nothing I’ve uncovered is as important as trust.

Much as employers understandably hunger for one-size-fits-all policies and practices, what motivates human beings remains stubbornly complex, opaque, and difficult to unravel.  Perhaps that’s why I felt so viscerally the shortsightedness and futility of Marissa Mayer’s decision to order Yahoo employees who had been working from home to move back to the office, and Hubert Joly’s to do the same at Best Buy.

Here’s the problem:  Employees who want to game the system are going to do so inside or outside the office.  Supervising them more closely is costly, enervating, and it’s ultimately a losing game.  As for highly motivated employees who’ve been working from home, all they’re likely to feel about being called back to the office is resentful — and more inclined to look for new jobs.

At its heart, the problem for Mayer and Joly is lack of trust.  For whatever reasons, they’ve lost trust that their employees can make responsible adult decisions for themselves about how to best get their work done and add value to the company.  Distrust begets distrust in return.  It kills motivation rather than sparking it.  Treat employees like children and you increase the odds they’ll act like children.  You reap what you sow — for better and for worse.

As an employer, I stay focused on one primary question about each employee:  What is going to free, fuel, and inspire this person to bring the best of him or herself to work every day, most sustainably?  My goal is to meet those needs in the best ways I can, without undue expense to others.

In the end, I’m much less concerned with where people do their work than with the value they’re able create wherever they happen to do it.  The value exchange here is autonomy (grounded in trust) for accountability.

As CEO, I myself work from home for an hour or two in the mornings most days because it’s quiet and free of distractions.  I find it’s the best way for me to get writing and other high-focus activities accomplished, and I know that’s true for many other business leaders.

One of the senior members of our team is a 35-year-old woman with three children under the age of nine.  She lives 90 minutes from work.  I’d love to have her at our offices every day, because I enjoy being able to interact with her around issues as they arise.  I also just like having her around as a colleague.

But to make that possible she’d have to invest three withering hours commuting each day — a huge cost, not just in time, but also in energy, for work and for her family.  Demanding that she make that trip every day would only prompt progressive fatigue, resentment, and impaired performance.

Instead, we settled from the start on having her come to the office two days a week, which is when we schedule our key meetings.  Those days also provide time for spontaneous brainstorming of ideas across the team.

Another one of our team members, a woman with two teenage kids, travels frequently in her role. When she gets back from trips, she typically works from home the next day — both to recover, and to have more time for her family.

Two of our other staffers — one male and one female — work mostly at the office out of personal preference, but also have young kids and work from home on some days when their kids are on vacation, or get sick.

Two younger, married team members recently requested permission to move to Amsterdam for eight months — for no other reason than they wanted to experience another culture.  For a moment, I bridled.  But since technology makes it possible for them to do their jobs from anywhere, we were able to make it happen.  They agreed to work during our regular office hours, and to visit our office for a week every two months.  So far it seems to be working seamlessly.

Every one of these people is highly productive.  I do have moments when I find myself wishing all of our team members were in the office more, and even wondering what they’re doing when I haven’t heard from them.

When those feelings arise, I take a deep breath and remind myself that my colleagues are adults, capable of making their own decisions about how best to get their work done, and that all good relationships involve some compromise.

It gets back to trust.  Give it, and you get it back. In over a decade, no employee has ever chosen to leave our company.  The better you meet people’s needs, the better they’ll meet yours.

http://blogs.hbr.org/schwartz/2013/03/treat-employees-with-trust.html

Highlights of article below from thebrackpipe.com:   “The last time the Dow hit a high, in 2007, the Federal Reserve and the European Central Bank were already collaborating on a global economic bailout, and Bear Stearns collapsed six months later.  Before that, the high was in January 2000, only about three months before the market started a long, ugly downward slide in the wake of the tech boom.  Go back further, in 1987, when the Dow hit a temporary high before the recession of the late 1980s and early 1990s hit.  In 1966, the Dow hit 1,000 and by 1967 the economy began a long downward slide into the stagflation of the 1970s and the recession of the early 1980s.

None of that, however, beats the Dow’s high in September 1929, just weeks before the giant crash that ushered in the Great Depression.  The Dow cannot defy gravity. The higher it rises, the harder it will fall.”

Article below by Heidi Moore in New York:

There is only one thing you need to know about finance: the stock market is not the economy.

This is worth remembering, because the stock market has been turning in some seductive performances, while the economy has been languishing.  The Dow Jones Industrial Average hit a new high of 14,222 today; if it remains that lofty throughout the day, it will beat the previous high of 14,164 on 9 October 2007.

Inevitably, seeing numbers like the Dow rise should feel good.  Our gross domestic product isn’t going up, having barely scraped out 0.1% last quarter.  Our personal income isn’t going up, as wages are stagnating.  Our employment numbers aren’t going up, as we’re still short three million jobs lost in the recession. Our 401Ks are dispersed through the stock market and it’s nice to feel a little rich, or at least better off.  When many of the major economic indicators provide only a wheezing malaise, the Dow high provides a little spot of irrational exuberance that is a welcome antidote.

But don’t trust the Dow.  It doesn’t have your best interests at heart. It lies to you.  It’s that narcissist who’s always preening and trying to look powerful when in fact it barely deserves an invitation to the party.

Most Americans know that the Dow is composed of a basket of 30 industrial stocks that are largely impervious to the struggles of ordinary Americans.  If you separated these stocks, their rise would not be exciting. It’s hard to picture a family driving back from the food bank – poverty is also at all-time highs in America, by the way – chanting “three cheers for Alcoa! Let’s hear it for Caterpillar!” Americans, no matter how patriotic, don’t pull out the pom-poms when it’s a good quarter for Cisco.   We just wait quietly for the riches to trickle down, for the companies to start hiring and for the rest of us to feel rich.

That trickle-down is not happening, and we know it’s not happening.  Companies are sitting on $1.4tn of cash, according to the Federal Reserve. “That number, a record high, equates to almost 9% of US GDP,” wrote JP Morgan strategist Michael Hood in December. “The cash stockpile has not risen enormously over the past year but it is roughly double the amount from 10 years earlier.”

Hood explains: it’s not that companies are hoarding money; it’s that they are making so much money there aren’t enough places to spend it.  American companies are in a golden age of profitability, even as the unemployment crisis continues and many ordinary Americans find it difficult to either save or borrow money.  That hasn’t changed for three years, and there’s no reason to believe it will.

There are other reasons not to get too excited about the Dow.  The most important is that the Dow is not “the market”, no matter what you may read.  The Dow is composed of 30 stocks; they’re not the biggest or most significant 30, so you won’t see Google or Apple or Amazon there.  They’re also picked to give a sickly-sweet picture of health.  The Dow stocks are not representative of both good and bad; when they start to stumble or go through big corporate changes, like Kraft, AIG and Citigroup did, they get kicked out of the index.

The stock market is much larger than that, and a better measure of its health is the S&P 500 Index.  The S&P 500 doesn’t tell the same story as the Dow.  It is struggling a bit more.  It is like a tightly coiled spring, in the words of ConvergEx Group chief market strategist Nicholas Colas.

Colas argues that the markets are “sleepwalking”, aided by investors who have been “lured into a quiescent state thus far in 2013”.  He worried in a research note this week that the rally in the markets is based on a certain level of delusion, a wilful ignorance of potential shocks from the European crisis as well as the fact that corporate earnings aren’t growing fast enough to justify the huge jumps in stock prices.  The fiscal cliff, the Italian elections, and the sequester have all passed with barely more than a sigh from major stock market indices like the S&P 500.  That demonstrates that the “market” is not paying attention – and when it does, watch out.

There’s another reason to take the Dow’s move upward with a grain of salt:  what goes up, must come down.  Historically, just when the Dow looks to have hit its most enthusiastic highs, a crash is around the corner.

The last time the Dow hit a high, in 2007, the Federal Reserve and the European Central Bank were already collaborating on a global economic bailout, and Bear Stearns collapsed six months later.  Before that, the high was in January 2000, only about three months before the market started a long, ugly downward slide in the wake of the tech boom.  Go back further, in 1987, when the Dow hit a temporary high before the recession of the late 1980s and early 1990s hit.  In 1966, the Dow hit 1,000 and by 1967 the economy began a long downward slide into the stagflation of the 1970s and the recession of the early 1980s.

None of that, however, beats the Dow’s high in September 1929, just weeks before the giant crash that ushered in the Great Depression.  The Dow cannot defy gravity. The higher it rises, the harder it will fall.

So when the Dow is high, you should smile – briefly. Then duck.

Article below by Penelope Trunk (from her blog http://blog.penelopetrunk.com):

I’m at my son’s cello lesson, thinking about this week’s Time magazine.  Sheryl Sandberg’s on the cover.

I never used to write about women on my blog.  I wrote for three national magazines about careers before I even acknowledged that I was a woman aside from saying

1. I got the column because I was a woman running tech companies. (Rare back then.)

2. I got a promotion because I leveraged the sexual harassment my boss dished out in order to climb the ladder (around him).

Other than that, I tried very hard to not mention women.  I could see that women who had kids got very little respect at the office and I stayed away from them.  I only hired men. Even after I had kids, I only worked with men.

Now I’ve downshifted, and I’m home with my kids. I tried to make it not a big deal that I downshifted. I kept saying that I was going to launch a new startup.  But then I found myself literally scared to death of going back to 100-hour weeks.

I write that: 100-hour weeks, and I almost don’t believe it.  Because it would mean that I was literally never with my kids.  But it’s true.

One of the nannies I had during that period still sees my oldest son.  She is one of those professional nannies—she always works for women with huge jobs, and she couldn’t stay with me after I cut back to 60 hours a week.

She and my older son are still very close.  I was having ice cream with the two of them and she started talking about a family that had a bunny and the bunny was lonely and needed a friend, but they couldn’t just buy another bunny.  You have to introduce the new bunny to the old bunny to see if they are friends.

So I said, “Did it work out?”

She said, “What? Don’t you remember?  It was your house!  The bunny was eating the carpet and right before we brought the second bunny, your bunny died.”

I don’t remember.  I do remember that we had a five-bedroom house that I didn’t have time to furnish so we bought animals for each room:  the bunny room, the cat room, the ferret room, etc. (You can see why I ended up with a farmer.)

What I am trying to tell you is that you really do not see your kids if you have a very big job.

So I’m sitting in a cello lesson taking notes on measure sixteen even though I don’t read music.  And I’m terrified every time my son finishes a song ahead of schedule because it means we’re one day closer to having to make the eight-hour trip to cello lessons three days a week instead of two.

I can’t stop thinking about Time magazine.  Sheryl Sandberg is such an incredibly aberrant example of women at work that I just don’t get how she’s on the cover.  She is great.  Smart. Driven.  I get it.  I am doing a life that she would hate.  I thought I was a high performer, but Sheryl Sandberg has no time for people like me.  I spent so many years working hard to get to the top, but the truth is that I’m not even close.  I was never in the running. I am nothing like Sheryl Sandberg.

My friend sent a link to me about Yahoo CEO Marissa Mayer.  Actually, it’s about Jacqueline Reses. Mayer runs products and services at Yahoo.  Reses runs everything else.  So the edict for no telecommuting came down at Yahoo signed by both of them.  Reses lives in New York City with her husband, Matthew Apfel, who has a big job at CORE Media Group, and her three, school-aged kids. And she commutes to Yahoo’s offices in California. Sunday night she goes to California and Friday she flies home.  No telecommuting for her.

Which drives home to me that the women at the very top all do not see their kids.  We just don’t hear about it.  Why would we?  Why would they talk about about it?  It doesn’t help their career and it doesn’t help their kids.

I can’t get angry about these women.  I just need to remember that I am not close to being able to compete with them.  The high performers in corporate life are so much more focused than everyone else in the workforce that it’s time we stopped selling a false bill of goods; almost no one can be so singularly focused to get to the top of anything.  Including corporate America.  Yet we keep talking to kids and each other like anyone can do it.

Most kids cannot have huge jobs.  They will be the workplace equivalent of intramural basketball players.  When they grow up, they will find work that is fine, just like it’s fine to play on a team with the kid across the hallway even though he misses too many lay-ups.

Sheryl Sandberg gives up her kids like movie stars give up food: she wants a great career more than anything else.

You know all the stuff people write about how really skinny women in magazines makes girls feel anxious and not worthy?  Do you know how women lose weight for the Oscars?  They want to have a great Hollywood career more than anything else.  That’s what seeing Sheryl Sandberg on the cover of Time magazine does to me.  Do you know what I want more than anything else?  For people to think I’m doing well.  In my career.

You can kill me now.  Because I hate when I coach women who tell me they want the world to see them as a successful in their career.  I tell them, “Well, you’re not doing all that well, because you made choices that did not get you a very good career.  But you have other things.”

I tell people this so easily on a coaching call.  And many women cry.  I understand.  Respect is always relative.  It’s like money, there’s always someone who gets more.  There’s always someone who makes the amount you have look like nothing.

Most women are past the idea that they measure themselves by money.  But women are instead using respect as our measuring tool, which is just as dangerous.  Because respect is relative, we don’t control it completely, and it doesn’t come along with choosing the job of raising kids.

Comment from thebrackpipe:  Are you kidding me?  Marissa Mayer built a nursery in her office so she could bring her new son to work but she denied the entire rest of the company the ability to work from home!!!  This woman is out of control!

Article below from the Daily Mail:

Yahoo CEO Marissa Mayer built a nursery in her office so she could bring her baby to work, which has angered some stay-at-home employees following her demand that all remote workers report back to the office.

The former Google Inc. executive took the demanding top job at Yahoo! when she was five months pregnant and stirred up controversy when she took only two weeks of maternity leave after giving birth last fall. 

But at her own expense, Mayer built a nursery adjacent to her office to be closer to her son.

‘I wonder what would happen if my wife brought our kids and nanny to work and set em up in the cube next door?’ the husband of one remote-working Yahoo employee asked in an interview with AllThingsD‘s Kara Swisher.

Many employees are upset because they don’t have the money or clout to build their own nurseries at work.  And many assume Mayer has a whole team of people, from nannies to cooks and cleaners, helping her raise her son – after all, she does have a $5 million penthouse atop the Four Seasons hotel in San Francisco in addition to her $5.2 million 5-bedroom home in Palo Alto. 

But Mayer has demanded that all remote employees report to office facilities by June 1.

‘Speed and quality are often sacrificed when we work from home,’ read the memo to employees announcing the change. ‘We need to be one Yahoo!, and that starts with physically being together.’

The move will only impact a small percentage of the company’s workforce, primarily customer service representatives or staffers who work in cities where Yahoo does not have an office.

The order is described as harsh since it requires employees to ‘either comply without exception or presumably quit.’

‘Many such staffers who wrote me today are angry, because they felt they were initially hired with the assumption that they could work more flexibly.  Not so, as it turns out,’ Swisher wrote in a blog posting about the change expected to impact several hundred workers.

Yahoo! declined to comment for this story, saying it won’t discuss personnel matters.

One Yahoo! employee said she worries that Mayer’s actions could set a damaging standard for working mothers across all industries.

‘When a working mother is standing behind this, you know we are a long way from a culture that will honor the thankless sacrifices that women too often make,’ a Yahoo! staffer told Swisher.

Some former Yahoo! employees agree with Mayer’s new policy, however, arguing that some stay-at-home workers were trying to ‘milk’ the system.

‘I agree with what she did,’ a former online editor at Yahoo! told Huffington Post on the condition of anonymity.  ‘Many workers were milking the company… There was a ton of flexibility, and I remember several times going to ask my manager a question — and he was nowhere to be found.’

Another former Yahoo! employee recalled a similar situation at the Internet company in an interview with Business Insider.

‘For what it’s worth, I support the “no working from home” rule,’ a former online engineer told the news site.  ‘There’s a ton of abuse of that at Yahoo…  people slacking off like crazy, not being available, spending a lot of time on non-Yahoo projects.’

The company headquarters is located in Sunnyvale, California, near San Jose.  The public corporation employs 11,500 people in more than 20 countries across the globe.

The 37-year-old Silicon Valley whiz kid was appointed the head of Yahoo in July 2012.

She was brought to the internet giant to re-energize the tech company founded by Jerry Yang and David Filo in 1995.

Though Yahoo!, which stands for Yet Another Hierarchical Officious Oracle, is one of the most visited websites on the Internet, it had started to lose its way as a company before she was brought on the team.

The upbeat blonde was seen as a breath of fresh air and morale booster.

She instituted free lunches at the company headquarters and started giving out smartphones to employees.

‘I want Yahoo to be the absolute best place to work, to have a fantastic culture.  We’re working really hard right now to remind people about all the opportunities that are there,’ she said shortly after she was hired at a Fortune magazine event in November.

With all the hype over her hiring, it came as a bit of a shock when she revealed that she was pregnant the day she was appointed head of Yahoo.

Much in the vein of Facebook COO Sheryl Sandberg, Mayer has unabashedly said that her job is not her number one priority in life.

She boldly revealed that her most significant concerns were ‘God, family, and Yahoo! – in that order.’

Given that she has stated she personally prioritizes her faith and family before her job, some see it as hypocritical that she has pulled the plug on flexible working arrangements which provides work-life balance for many.

Tech companies are noted for offering creative work arrangements and were pioneers in offering the option for staff to check in remotely.

Richard Branson, head of Virgin Group, said the move by Yahoo! undermined the trust that staff would get their work done wherever, without supervision, as working is no longer 9-5.

‘This seems a backwards step in an age when remote working is easier and more effective than ever,’ Branson wrote in a blog on the Virgin website.

‘If you provide the right technology to keep in touch, maintain regular communication and get the right balance between remote and office working, people will be motivated to work responsibly, quickly and with high quality.’

Britain’s BT Group, one of the first UK companies to adopt teleworking, said about 69,000 of its 89,000 staff were equipped to work flexibly of which about 9,400 are home workers.

The company said this led to benefits like accommodation savings, increased productivity and reduced sick absence, adding 99 per cent of women returned to BT after maternity leave.

‘Our flexible working policies can also achieve a better balance between work and family commitments, which can be especially important for those with young families or caring responsibilities,’ a BT spokesman said.

Now some wonder if Yahoo! has learned a lesson and that the work from home option was too good to be true.

It remains to be seen if other tech firms will similarly yank the flexible work arrangement, which may leave many employees in the lurch who have grown accustomed to that lifestyle.

Read more: http://www.dailymail.co.uk/news/article-2284828/Yahoo-boss-Marissa-Mayer-angers-employees-building-nursery-baby-office.html#ixzz2N42gNbwW
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Comment from thebrackpipe:  Taking a two week maternity leave?  Seriously?  Hey Marissa, that’s a great example for a CEO to set – sacrifice everything or be fired.  Well, it’s really too bad for Macallister (Marissa’s baby), as he will certainly end up in counseling for most of his adult life.

Article below by Lisa Belkin of the Huffington Post:

What others see as the future of the workplace, and what parents see as a most important tool for juggling home and work, Marissa Mayer apparently sees as disposable.

The CEO of Yahoo!, who made news when she took the position last summer while five months pregnant, announced through the company’s human resources arm yesterday that employees will no longer be permitted to work remotely.

“Speed and quality are often sacrificed when we work from home,” says the memo from HR director Jackie Reses, and reprinted by Kara Swisher on allthingsd.com last night.  “We need to be one Yahoo!, and that starts with physically being together.”

No. It doesn’t.

It did 40 years ago, when work and home were separate realms and workers had the luxury of taking care of one at a time.  More accurately, men had the ability to take care of work because they knew that women had it covered at home.

It did 20 years ago, when the tools of work were all in the office — all the files and paperwork; the office phone, with the office number, and the cord that didn’t reach beyond the cubicle wall.

It did before there were studies showing that flexibility improves worker productivity, and morale andhealth.

I had hope for Marissa Mayer.  I’d thought that while she was breaking some barriers — becoming the youngest woman CEO ever lead a Fortune 500 company, and certainly the first to do it while pregnant — she might take on the challenge of breaking a number of others.   That she’d use her platform and her power to make Yahoo! an example of a modern family-friendly workplace.  That she would embrace the thinking that new tools and technology deserve an equally new approach to where and how employees are allowed to work.

Instead she began by announcing that she would take just a two week maternity leave, which might have been all she needed, but which sent the message that this kind of macho-never-slowed-down-by-the-pesky-realities-of-life-outside-the-office was expected of everyone.

And now there’s this.  Rather than championing a blending of life and work , she is calling for an enforced and antiquated division.  She is telling workers — many of whom were hired with the assurance that they could work remotely — that they’d best get their bottoms into their office chairs, or else.

Yes, there are some jobs that can not be done remotely.  But a case by case approach, identifying not only which positions CAN be flexible, but also having managers work with employees on a clear plan of what’s expected from those positions, makes far more sense than a blanket ban.  Instead, Yahoo! is cracking down not only on those who work from home full-time, or those who need flexibility because they are parents; everyone is being warned that their lives don’t matter.

“For the rest of us who occasionally have to stay home for the cable guy,” Reses writes, “please use your best judgment in the spirit of collaboration. “I’d argue that it’s Mayer and Yahoo! who need to use their best judgment, and, in the spirit of collaboration should come to exactly the opposite conclusion.  Putting employees back into a box is not good for Yahoo!.  It is not good for workers.  And it is very bad business.

Article below by Matt Taibbi:

The deal was announced quietly, just before the holidays, almost like the government was hoping people were too busy hanging stockings by the fireplace to notice.  Flooring politicians, lawyers and investigators all over the world, the U.S. Justice Department granted a total walk to executives of the British-based bank HSBC for the largest drug-and-terrorism money-laundering case ever.  Yes, they issued a fine – $1.9 billion, or about five weeks’ profitbut they didn’t extract so much as one dollar or one day in jail from any individual, despite a decade of stupefying abuses.

People may have outrage fatigue about Wall Street, and more stories about billionaire greedheads getting away with more stealing often cease to amaze.  But the HSBC case went miles beyond the usual paper-pushing, keypad-punching­ sort-of crime, committed by geeks in ties, normally associated­ with Wall Street.  In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.

For at least half a decade, the storied British colonial banking power helped to wash hundreds of millions of dollars for drug mobs, including Mexico’s Sinaloa drug cartel, suspected in tens of thousands of murders just in the past 10 years – people so totally evil, jokes former New York Attorney General Eliot Spitzer, that “they make the guys on Wall Street look good.”  The bank also moved money for organizations linked to Al Qaeda and Hezbollah, and for Russian gangsters; helped countries like Iran, the Sudan and North Korea evade sanctions; and, in between helping murderers and terrorists and rogue states, aided countless common tax cheats in hiding their cash.

“They violated every goddamn law in the book,” says Jack Blum, an attorney and former Senate investigator who headed a major bribery investigation against Lockheed in the 1970s that led to the passage of the Foreign Corrupt Practices Act.  “They took every imaginable form of illegal and illicit business.”

That nobody from the bank went to jail or paid a dollar in individual fines is nothing new in this era of financial crisis.  What is different about this settlement is that the Justice Department, for the first time, admitted why it decided to go soft on this particular kind of criminal.  It was worried that anything more than a wrist slap for HSBC might undermine the world economy.  “Had the U.S. authorities decided to press criminal charges,” said Assistant Attorney General Lanny Breuer at a press conference to announce the settlement, “HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized.”

It was the dawn of a new era. In the years just after 9/11, even being breathed on by a suspected terrorist could land you in extralegal detention for the rest of your life.  But now, when you’re Too Big to Jail, you can cop to laundering terrorist cash and violating the Trading With the Enemy Act, and not only will you not be prosecuted for it, but the government will go out of its way to make sure you won’t lose your license.  Some on the Hill put it to me this way:  OK, fine, no jail time, but they can’t even pull their charter?  Are you kidding?

But the Justice Department wasn’t finished handing out Christmas goodies.  A little over a week later, Breuer was back in front of the press, giving a cushy deal to another huge international firm, the Swiss bank UBS, which had just admitted to a key role in perhaps the biggest antitrust/price-fixing case in history, the so-called LIBOR scandal, a massive interest-rate­rigging conspiracy involving hundreds of trillions (“trillions,” with a “t”) of dollars in financial products.  While two minor players did face charges, Breuer and the Justice Department worried aloud about global stability as they explained why no criminal charges were being filed against the parent company.

“Our goal here,” Breuer said, “is not to destroy a major financial institution.”

A reporter at the UBS presser pointed out to Breuer that UBS had already been busted in 2009 in a major tax-evasion case, and asked a sensible question.  “This is a bank that has broken the law before,” the reporter said. “So why not be tougher?”

“I don’t know what tougher means,” answered the assistant attorney general.

Also known as the Hong Kong and Shanghai Banking Corporation, HSBC has always been associated with drugs.  Founded in 1865, HSBC became the major commercial bank in colonial China after the conclusion of the Second Opium War.  If you’re rusty in your history of Britain’s various wars of Imperial Rape, the Second Opium War was the one where Britain and other European powers basically slaughtered lots of Chinese people until they agreed to legalize the dope trade (much like they had done in the First Opium War, which ended in 1842).

A century and a half later, it appears not much has changed.  With its strong on-the-ground presence in many of the various ex-colonial territories in Asia and Africa, and its rich history of cross-cultural moral flexibility, HSBC has a very different international footprint than other Too Big to Fail banks like Wells Fargo or Bank of America.  While the American banking behemoths mainly gorged themselves on the toxic residential-mortgage trade that caused the 2008 financial bubble, HSBC took a slightly different path, turning itself into the destination bank for domestic and international scoundrels of every possible persuasion.

Three-time losers doing life in California prisons for street felonies might be surprised to learn that the no-jail settlement Lanny Breuer worked out for HSBC was already the bank’s third strike.  In fact, as a mortifying 334-page report issued by the Senate Permanent Subcommittee on Investigations last summer made plain, HSBC ignored a truly awesome quantity of official warnings.

In April 2003, with 9/11 still fresh in the minds of American regulators, the Federal Reserve sent HSBC’s American subsidiary a cease-and-desist­ letter, ordering it to clean up its act and make a better effort to keep criminals and terrorists from opening accounts at its bank.  One of the bank’s bigger customers, for instance, was Saudi Arabia’s Al Rajhi bank, which had been linked by the CIA and other government agencies to terrorism.  According to a document cited in a Senate report, one of the bank’s founders, Sulaiman bin Abdul Aziz Al Rajhi, was among 20 early financiers of Al Qaeda, a member of what Osama bin Laden himself apparently called the “Golden Chain.”  In 2003, the CIA wrote a confidential report about the bank, describing Al Rajhi as a “conduit for extremist finance.”  In the report, details of which leaked to the public by 2007, the agency noted that Sulaiman Al Rajhi consciously worked to help Islamic “charities” hide their true nature, ordering the bank’s board to “explore financial instruments that would allow the bank’s charitable contributions to avoid official Saudi scrutiny.” (The bank has denied any role in financing extremists.)

In January 2005, while under the cloud of its first double-secret­-probation agreement with the U.S., HSBC decided to partially sever ties with Al Rajhi.  Note the word “partially”: The decision­ would only apply to Al Rajhi banking and not to its related trading company, a distinction that tickled executives inside the bank.  In March 2005, Alan Ketley, a compliance officer for HSBC’s American subsidiary, HBUS, gleefully told Paul Plesser, head of his bank’s Global Foreign Exchange Department, that it was cool to do business with Al Rajhi Trading.  “Looks like you’re fine to continue dealing with Al Rajhi,” he wrote.  “You’d better be making lots of money!”

But this backdoor arrangement with bin Laden’s suspected “Golden Chain” banker wasn’t direct enough – many HSBC executives wanted the whole shebang restored.  In a remarkable e-mail sent in May 2005, Christopher Lok, HSBC’s head of global bank notes, asked a colleague if they could maybe go back to fully doing business with Al Rajhi as soon as one of America’s primary banking regulators, the Office of the Comptroller of the Currency, lifted the 2003 cease-and-desist order: “After the OCC closeout and that chapter is hopefully finished, could we revisit Al Rajhi again?  London compliance has taken a more lenient view.”

After being slapped with the order in 2003, HSBC began blowing off its requirements both in letter and in spirit – and on a mass scale, too. Instead of punishing the bank, though, the government’s response was to send it more angry letters.  Typically, those came in the form of so-called “MRA” (Matters Requiring Attention) letters sent by the OCC. Most of these touched upon the same theme, i.e., HSBC failing to do due diligence on the shady characters who might be depositing money in its accounts or using its branches to wire money.  HSBC racked up these “You’re Still Screwing Up and We Know It” orders by the dozen, and in just one brief stretch between 2005 and 2006, it received 30 different formal warnings.

Nonetheless, in February 2006 the OCC under George Bush suddenly decided to release HSBC from the 2003 cease-and-desist­ order.  In other words, HSBC basically violated its parole 30 times in just more than a year and got off anyway.  The bank was, to use the street term, “off paper” – and free to let the Al Rajhis of the world come rushing back.

After HSBC fully restored its relationship with the apparently terrorist-friendly Al Rajhi Bank in Saudi Arabia, it supplied the bank with nearly 1 billion U.S. dollars.  When asked by HSBC what it needed all its American cash for, Al Rajhi explained that people in Saudi Arabia need dollars for all sorts of reasons.  “During summer time,” the bank wrote, “we have a high demand from tourists traveling for their vacations.”

The Treasury Department keeps a list compiled by the Office of Foreign Assets Control, or OFAC, and American banks are not supposed to do business with anyone on the OFAC list.  But the bank knowingly helped banned individuals elude the sanctions process.  One such individual was the powerful Syrian businessman Rami Makhlouf, a close confidant of the Assad family.  When Makhlouf appeared on the OFAC list in 2008, HSBC responded not by severing ties with him but by trying to figure out what to do about the accounts the Syrian power broker had in its Geneva and Cayman Islands branches.  “We have determined that accounts held in the Caymans are not in the jurisdiction of, and are not housed on any systems in, the United States,” wrote one compliance officer.  “Therefore, we will not be reporting this match to OFAC.”

Translation: We know the guy’s on a terrorist list, but his accounts are in a place the Americans can’t search, so screw them.

Remember, this was in 2008 – five years after HSBC had first been caught doing this sort of thing. And even four years after that, when being grilled by Michigan Sen. Carl Levin in July 2012, an HSBC executive refused to absolutely say that the bank would inform the government if Makhlouf or another OFAC-listed name popped up in its system – saying only that it would “do everything we can.”

The Senate exchange highlighted an extremely frustrating dynamic government investigators have had to face with Too Big to Jail megabanks: The same thing that makes them so attractive to shady customers – their ability to instantaneously move money around the world to places like the Cayman Islands and Switzerland – makes it easy for them to play dumb with regulators by hiding behind secrecy laws.

When it wasn’t banking for shady Third World characters, HSBC was training its mental firepower on the problem of finding creative ways to allow it to do business with countries under U.S. sanction, particularly Iran.  In one memo from HSBC’s Middle East subsidiary, HBME, the bank notes that it could make a lot of money with Iran, provided it dealt with what it termed “difficulties” – you know, those pesky laws.

“It is anticipated that Iran will become a source of increasing income for the group going forward,” the memo says, “and if we are to achieve this goal we must adopt a positive stance when encountering difficulties.”

The “positive stance” included a technique called “stripping,” in which foreign subsidiaries like HSBC Middle East or HSBC Europe would remove references to Iran in wire transactions to and from the United States, often putting themselves in place of the actual client name to avoid triggering OFAC alerts. (In other words, the transaction would have HBME listed on one end, instead of an Iranian client.)

For more than half a decade, a whopping $19 billion in transactions involving Iran went through the American financial system, with the Iranian connection kept hidden in 75 to 90 percent of those transactions.  HSBC has been headquartered in England for more than two decades – it’s Europe’s largest bank, in fact – but it has major subsidiary operations in every corner of the world. What’s come out in this investigation is that the chiefs in the parent company often knew about shady transactions when the regional subsidiary did not. In the case of banned Iranian transactions, for instance, there are multiple e-mails from HSBC’s compliance head, David Bagley, in which he admits that HSBC’s American subsidiary probably has no clue that HSBC Europe has been sending it buttloads of banned Iranian money.

“I am not sure that HBUS are aware of the fact that HBEU are already providing clearing facilities for four Iranian banks,” he wrote in 2003.  The following year, he made the same observation. “I suspect that HBUS are not aware that [Iranian] payments may be passing through them,” he wrote.

What’s the upside for a bank like HSBC to do business with banned individuals, crooks and so on? The answer is simple: “If you have clients who are interested in ‘specialty services’­ – that’s the euphemism for the bad stuff – you can charge ’em whatever you want,” says former Senate investigator Blum.  “The margin on laundered money for years has been roughly 20 percent.”

Those charges might come in many forms, from upfront fees to promises to keep deposits at the bank for certain lengths of time.  However you structure it, the possibilities for profit are enormous, provided you’re willing to accept money from almost anywhere.  HSBC, its roots in the raw battlefield capitalism of the old British colonies and its strong presence in Asia, Africa and the Middle East, had more access to customers needing “specialty services” than perhaps any other bank.

And it worked hard to satisfy those customers.  In perhaps the pinnacle innovation in the history of sleazy banking practices, HSBC ran a preposterous offshore operation in Mexico that allowed anyone to walk into any HSBC Mexico branch and open a U.S.-dollar account (HSBC Mexico accounts had to be in pesos) via a so-called “Cayman Islands branch” of HSBC Mexico.  The evidence suggests customers barely had to submit a real name and address, much less explain the legitimate origins of their deposits.

If you can imagine a drive-thru heart-transplant clinic or an airline that keeps a fully-stocked minibar in the cockpit of every airplane, you’re in the ballpark of grasping the regulatory absurdity of HSBC Mexico’s “Cayman Islands branch.”  The whole thing was a pure shell company, run by Mexicans in Mexican bank branches.

At one point, this figment of the bank’s corporate imagination had 50,000 clients, holding a total of $2.1 billion in assets.  In 2002, an internal audit found that 41 percent of reviewed accounts had incomplete client information.  Six years later, an e-mail from a high-ranking HSBC employee noted that 15 percent of customers didn’t even have a file.  “How do you locate clients when you have no file?” complained the executive.

It wasn’t until it was discovered that these accounts were being used to pay a U.S. company allegedly supplying aircraft to Mexican drug dealers that HSBC took action, and even then it closed only some of the “Cayman Islands branch” accounts.  As late as 2012, when HSBC executives were being dragged before the U.S. Senate, the bank still had 20,000 such accounts worth some $670 million – and under oath would only say that the bank was “in the process” of closing them.

Meanwhile, throughout all of this time, U.S. regulators kept examining HSBC.  In an absurdist pattern that would continue through the 2000s, OCC examiners would conduct annual reviews, find the same disturbing shit they’d found for years, and then write about the bank’s problems as though they were being discovered for the first time.  From the 2006 annual OCC review: “During the year, we identified a number of areas lacking consistent, vigilant adherence to BSA/AML policies. . . . Management responded positively and initiated steps to correct weaknesses and improve conformance with bank policy. We will validate corrective action in the next examination cycle.”

Translation: These guys are assholes, but they admit it, so it’s cool and we won’t do anything.

A year later, on July 24th, 2007, OCC had this to say: “During the past year, examiners identified a number of common themes, in that businesses lacked consistent, vigilant adherence to BSA/AML policies.  Bank policies are acceptable. . . . Management continues to respond positively and initiated steps to improve conformance with bank policy.”

Translation: They’re still assholes, but we’ve alerted them to the problem and everything’ll be cool.

By then, HSBC’s lax money-laundering controls had infected virtually the entire company.  Russians identifying themselves as used-car salesmen were at one point depositing $500,000 a day into HSBC, mainly through a bent traveler’s-checks operation in Japan.  The company’s special banking program for foreign embassies was so completely fucked that it had suspicious-activity­ alerts backed up by the thousands.  There is also strong evidence that the bank was allowing clients in Sudan, Cuba, Burma and North Korea to evade sanctions.

When one of the company’s compliance chiefs, Carolyn Wind, raised concerns that she didn’t have enough staff to monitor suspicious activities at a board meeting in 2007, she was fired.  The sheer balls it took for the bank to ignore its compliance executives and continue taking money from so many different shady sources­ while ostensibly it had regulators swarming­ all over its every move is incredible.  “You can’t make up more egregious money-laundering that permeated an entire institution,” says Spitzer.

By the late 2000s, other law enforcement agencies were beginning to catch HSBC’s scent.  The Department of Homeland Security started investigating HSBC for laundering drug money, while the attorney general’s office in West Virginia snooped around HSBC’s involvement in a Medicare-fraud case.  A federal intra-agency meeting was convened in Washington in September 2009, at which it was determined that HSBC was out of control and needed to be investigated more closely.

The bank itself was then notified that its usual OCC review was being “expanded.”  More OCC staff was assigned to pore through HSBC’s books, and, among other things, they found a backlog of 17,000 alerts of suspicious activity that had not been processed.  They also noted that the bank had a similar pileup of subpoenas in money-laundering cases.

Finally it seemed the government was on the verge of becoming genuinely pissed off.  In March 2010, after seeing countless ultimatums ignored, they issued one more, giving HSBC three months to clear that goddamned 17,000-alert backlog or else there would be serious consequences. HSBC met that deadline, but months later the OCC again found the bank’s money-laundering controls seriously wanting, forcing the government to take, well . . . drastic action, right?

Sort of! In October 2010, the OCC took a deep breath, strapped on its big-boy pants and . . . issued a second cease-and-desist order!

In other words, it was “Don’t Do It Again” – again. The punishment for all of that dastardly defiance was to bring the regulatory process right back to the same kind of double-secret-probation­ order they’d tried in 2003.

Not to say that HSBC didn’t make changes after the second Don’t Do It Again order. It did – it hired some people…

Read the rest of the article at – http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214#ixzz2MMBGVL1E 

Follow us: @rollingstone on Twitter | RollingStone on Facebook

Comment from thebrackpipe.com:  Joe Biden is a true American idiot.  

Article below by Karen Workman of Digital First Media:

Vice President Joe Biden is leading White House’s task force to reduce gun violence, so it’s not surprising that video of him advising people to “buy a shotgun” is drawing a lot of attention.

Biden, in a live town hall with Parents Magazine on Tuesday, ends one of his answers with the simple advice: “Buy a shotgun. Buy a shotgun.”

Biden was responding to a question from a reader named Kate about whether law abiding citizens would be a greater target for criminals if certain weapons and high capacity magazines are banned.

“Kate, if you want to protect yourself, get a double barrel shotgun, have the shells, a 12- gauge shotgun,” Biden responds.

He also talks about how he’s advised his wife to “fire two blasts” with the shotgun on their home’s balcony if she ever suspects trouble.

“You don’t need an AR-15,” Biden says. “It’s harder to aim. It’s harder to use. And, in fact, you don’t need 30 rounds to protect yourself.”

Biden was being interviewed by Michael Kress, the executive editor of Parents.com

.
The town hall was hosted on the magazine’s Facebook page and the full replay is available from the White House.