Something for Nothing Britain

Bankers-or-Us-a-Derivative-MessBy John S Warren

What may be said of Rona Fairhead’s (HSBC’s Chairman of the Audit and Risk Committee) performance at the Public Accounts Committee (PAC) on March 9? Well, she wore a very elegant three-strand pearl necklace at the Select Committee.

Three HSBC executives appeared at the Select Committee session; Stuart Gulliver, the current CEO; Chris Meares, a retired executive board member; and Fairhead, who, it seems, is paid £513,000 per year part-time, to take full responsibility for absolutely nothing at all. This in itself, I suppose is success of a kind.

The PAC questioning of the HSBC executives on the tax and Swiss bank account scandal that has enveloped the Geneva subsidiary of the bank, at times appeared to suggest to the Committee that it was confronted by the Three Wise Monkeys, but the laughter both in the committee and gallery that accompanied some of the HSBC answers, soon enough suggested that the Select Committee was actually faced by nothing more than the three stooges.

At times the PAC session seemed to turn into little more than an elaborate HSBC game of “pass the parcel”, but not by passing it to each other, and without even a parcel; a strange ritual dance that bafflingly for outsiders seemed both obtuse and bereft of meaning. I did not realise until today how difficult the words “full” or “direct” were to understand; confronted by the binary option of a simple “yes” or “no” answer to move forward the PAC interrogation at all, completely defeated the combined intellectual resources of three highly paid masters of the universe.

The explanations of the HSBC corporate organisation structure offered by the three executives, in the period under review by the PAC, often turned on the term “federated”: which required an observer to grapple with the newly presented mysteries of the significance of this 130 year old federation, which seemed to suggest the 257,000 HSBC workforce were, in consequence of being “federated”, operating like ‘atoms in the void’; matter in motion, meeting, agitating, colliding but remaining throughout entirely separate entities. It became difficult to understand just how such a company could even devise a simple organisation chart. It is a big bank; there are big salaries; there were big job titles, with big terms like “CEO” or “Global something-or-other”; but the precise nature of what used to be called ‘line responsibility’ in the organisation remained exasperatingly elusive throughout the PAC session.

In 2012 HSBC found itself in trouble with the American regulatory authorities for activities in Mexico, and was fined:

“HSBC Holdings Plc agreed to pay a record $1.92 billion in fines to U.S. authorities for allowing itself to be used to launder a river of drug money flowing out of Mexico and other banking lapses. Mexico’s Sinaloa cartel and Colombia’s Norte del Valle cartel between them laundered $881 million through HSBC and a Mexican unit” (; 11th December, 2012).

We may reasonably believe this would have put HSBC audit on high alert thereafter. Now in 2015 problems relating both to tax avoidance and tax evasion have been raised by regulators at the Geneva subsidiary in Switzerland:

“Europe’s largest lender is in regulators’ sights after details about how its Swiss private bank allegedly helped wealthy clients evade taxes were leaked to the media and published last week” (reuters, reported in the Telegraph; 18th February, 2015)

According to Fairhead’s vigorously defended view, it is the HSBC “frontline” staff who should carry the can for any failures. These staff operated a long, long way down the federated hierarchy from the lofty, almost saintly role of the non-executive, non-involved perspective of the scrupulously distant Fairhead Audit Committee; or, Fairhead argued, it was, first and foremost, the unscrupulous tax-evading customers who should carry the can: while Fairhead and the Audit Committee spent their time kicking a quite different can (called “process”, although nobody on the PAC seemed to understand quite what that can had to do with reality) deftly down the road. As best and as fairly it seems possible to understand Fairhead’s own case, she was entitled only to consider issues that came to her committee, and it seemed even then it was not incumbent on Fairhead to be pro-active or sceptical about the information supplied. For the rest, this relied on the application of “process”; which was the responsibility, presumably, of someone else.

Alternatively, John Crace in the Guardian briskly summarised his interpretation of Fairhead’s argument:

“What the committee had to understand, Fairhead continued, was that people at her level in HSBC were not paid to be actually personally responsible for anything and it was entirely unreasonable for anyone to expect her to know anything about anything” (Guardian; March, 10; p.13).

The PAC Chairman Patricia Hodge MP suggested that the fairly obvious weaknesses of Fairhead’s HSBC audit committee leadership (given the unravelled outcome in Geneva), whether through naivety or incompetence, simply did not seem to attempt persistently or forensically enough to investigate the Geneva subsidiary, which was growing profits by 50%+ in the relevant period, but which “routinely allowed clients to withdraw bricks of cash, held accounts for drug dealers and colluded with wealthy clients to conceal undeclared ‘black accounts’” (Guardian report; March, 10; p.4); and including outcomes that may have cost HMRC £135m in tax evaded, according to Hodge. Hodge concluded that this should lead Fairhead to consider her position at her other, but major role in British public life, as Chair of the BBC Trust. The acute and forensic barrister Stephen Phillips MP, on the other hand thought Fairhead should resign from HSBC.

Generally, resigning is not the way responsibility works in Cameron’s Britain; taking personal responsibility, we must understand, is something suited only to those ordinary folk who regularly take their seat at the dinner of life, some distance below the salt. It is a kind of inverse squares equation – the higher the position attained in Britain the less responsibility anyone is expected to accept for anything at all that actually happens, save only collecting the salary, any bonuses that may be available, public esteem, other lucrative job offers, and perhaps a gong; or even a seat in the House of Lords.

Dress well, speak softly, ensure you have an impeccable metropolitan network, above all do nothing but always do it assiduously, demonstrate only that you can waffle effortlessly and endlessly, or are even just surprised and helplessly inarticulate under pressure; these are the hallmark traits of success, and establishes the appropriate order of priorities to succeed in this culture.

The smart move, however is simply not to attend PAC meetings; but this seems to require more clout than the three stooges could deploy. Clearly they only possess a ‘B’ list network. Meanwhile it appears that Conservative MPs have blocked or even “vetoed” the PAC’s attempt to call to account the Conservative Peer, past HSBC Chairman, recent Conservative Party Trade Minister and long-time associate of David Cameron, Lord Green (; March, 10). This was reported as an “accusation” against Tory MPs by the Guardian on 9th March, and front-page headlined as “Tory MPs ‘let ex-HSBC boss off the hook’” on 10th March. However it happened, that is how to do it in modern Britain; rely on a good network and say nothing at all.

To think; Johann Lamont was right after all; people are receiving something for nothing in Britain; she was just looking in the wrong place.

Comments (19)

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  1. ex-expat says:

    I am well old enough to know better, but while reading this article I had a moment of rage when I felt that it would be worth a prison sentence to heave a brick at the three stooges. Helpless rage. How many other people felt the same urge, I wonder. All we have at the moment is the ballot box. While I think it would be best used to hit useless candidates over the head with, all we can do is vote.

  2. Clive B Scott says:

    Excellent summation of the mutually appointed self styled “great and good” of the half witted, morally bankrupt, intellectually incoherent numpties in positions of power, influence and privilege in broken Britain. Hopefully a large contingent of SNP MP’s will head to Westminster in May and shine a searching light on ghastly people such as Rona Fairhead and precipitate their long overdue and longed for downfall.

  3. bringiton says:

    Perhaps it should be known as the Hide Savings Bank for Crooks.
    When “low” paid part-time MPs see their very important equivalents in the private sector being paid vast sums for doing nothing,it must rankle.

  4. emmylgant says:

    More of the same. So how exactly do we stop the pillage and the theft of our children’s future when no one is listening? Hand wringing and tsk-tsking doesn’t bring about change. Neither does voting in a dead democracy.
    Now what?

  5. Richard Harris says:

    I can see it, you can see it, anyone watching with half an eye can see it – the Emperor is not just naked but he is cheerfully waving his D*%k in our faces. And nothing will change because this is the norm and the accepted. If these people are self serving, venal and deeply corrupt they are not exceptional, they performing to type in a system whose sole rationale and function is now to gain that system. In every sphere of life, from banking to politics to media to academia. With the current fraud enquiry into the BoE “crisis” lending activies we now see that even the state is gaining the state. The circle is complete.

    Welcome to the Hotel Abyss

  6. Legerwood says:

    You talk of ‘networks’. Ms Fairhead’s network, or part thereof, was to the fore on This Week last night.

    Michael Portillo in his ‘moment of the week’ chose to mount an attack on Margaret Hodge for her interrogation of Ms Fairheasd and for calling into question Ms Fairhead’s fitness to be head of the BBC trust. Mr Portillo did say at the start of his remarks that he knew Ms Fairhead but that could not, in my opinion, excuse him abusing his position on the show and thus access to the airwaves to mount an attack on Ms Hodge. Particularly so since she was not there to defend herself and the HSBC affair did not seem to feature to any great extent, if St all, in the programme.

    Given what HSBC has been up too it was a strange way to behave.

    Networks indeed.

  7. The ordinary Joe votes these people in…why? The rich are 1%…1% why don’t the 91% grow a back bone. You can’t complain when you vote these people into places where they are going to abuse………you allow it.

  8. FrankM says:

    The previous excellent comments have summed up very well how I also feel about this situation.
    However, now we know that the HSBC Chairman (person?) part-time on £513,00 per year, is also Chair of the BBC trust. Quelle surprise!!!!! Who would have thought that the BBC had such a person at the top end?
    If investigated widely enough, I wonder where all the links would lead.
    That is why the panic is on just now in British politics. They will not want ‘outsiders’ to see any of the books.

    Ask yourself why we need a House of Lords, or should that be a House of Rewards?
    Britain is corrupt to the core and always has been. The bigger the entity and the more departments inside it, the easier it is to hide corruption.
    I believe that is another reason why they do NOT want the Union broken up.

    I have to say ‘bringiton’ – I do like your renaming of this bank! Very apt.
    We could have a re-naming competition for many of the others as well.
    I feel the “helpless rage” coherently described by ex-expat and agree with Clive that a large contingent of SNP MP’s will “shine a searching light” on such people and, hopefully bring about their downfall.

    It is disappointing to note that severe, unwarranted and disgusting attacks are taking place each day on the SNP. It is a symptom of the wolves being forced into a corner. They and their allies in Westminster are scared that the ‘truth will out’.
    However, I am encouraged by the dignified approach to politics by the SNP, who move forward with considered argument. The people of Scotland are beginning to waken up. The first dominoes have fallen and the rest will follow.

    Saor Alba!

  9. John Page says:

    I wonder how long we need to wait for a post that implies that this is an exaggeration, that Britain is not really “broken”, that Holyrood isn’t perfect, that Britain has been an exemplar around the world in bringing “values” to lesser developed societies and that you guys are only taking this view from a twisted sense of unpleasant Scottish nationalism………..have you forgotten that you lost the Referendum?

  10. Darien says:

    The anti-Scots London media bandwagon rolleth. Come May the inevitable red + blue tory alliance will render Scots representation at Westminster an even bigger joke than it is now. EVEL = De facto independence.

  11. gonzalo1 says:

    I see Glasgow City Cooncil’s main wummin, Maureen McKenna OBE, has awarded hersel a 60 grand bonus. At the same time her cooncil is cuttin staff in the schools and downsizing Special Needs schools. No sense of irony, obviously. Just the same as the Tories these people. Still, when her retirement comes next year she will get a bit more.

  12. Anton says:

    I think we have to be a little bit cautious in condemning others. Let’s not forget that during the period in question the Scottish Government was calling for not more, but lighter, regulation of the banking and financial services sector.

    It all depends on where you think the blame lies – the banks or the regulators.

    1. John Page says:

      Ah you’re right….it was Alex Salmond’s fault entirely. He encouraged them to facilitate good customer relations with the cartels and to have ready supplies of cash bricks in Zug
      I’ve changed my mind I think I will vote Labour in May because Ed Balls is the man……..

      John Page

      1. Anton says:

        I didn’t say that. Why do you pretend I did? Zero marks for relevance.

    2. Darien says:

      Any blame lies with Joe Public, for putting up with such a crooked ‘elite’ for so long, and especially those voting ‘No’ last Sept for more of the same from our corrupt elite please! Someone send for a psychiatrist.

  13. Alastair says:

    I couldn’t find a link to the session even though the BBC covered it. Anybody help.

    1. The link is:

      Incidentally, the PAC has made the following statement on 11th March:

      “A statement from the Public Accounts Committee:

      In response to recent articles in the Guardian newspaper regarding discussion in the Public Accounts Committee about calling Lord Green, the Committee makes the following statement:

      There was no vote. The Committee reached a cross-party consensus and came to the view not to call Lord Green at this time. The Committee always reserves the right to call witnesses in light of further information.”

  14. Dean Richardson says:

    Shouldn’t the MP referred to be Margaret Hodge? (I believe she’s also known as Mags Hodge Tax Dodge, as her family’s business practises tax avoidance on an industrial scale.) Patricia Hodge is an English actress.

    1. You are of course right. Mea culpa. Patricia Hodge did in fact play Margaret Thatcher, but I don’t think I can work that into an excuse! No, no excuse that I can see. Should I offer my resignation from this thread?

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