Senate gives HSBC an American nightmare Paul Thurston, who headed HSBC's Mexican operation for a year and is now global head of retail banking, wrote an email to a colleague that "this is a very serious, and high profile, case which has potential reputational damage to the HSBC Group." Mr Thurston, who made improvements to compliance during his stint in Mexico, told the hearing that Banco Internacional was a fast-growth bank with lax controls. The absence of controls allowed the bank to provide accounts in the Cayman Islands to Mexicans, 15pc of which HSBC had barely any information on. And the report shows that the culture at HSBC was frequently to put profit ahead of compliance with AML rules that the US government had toughened in the wake of the September 11 terrorist attacks and would do so again over the next decade. A snapshot of the tension is provided by an email that John Root, then head of AML for HSBC in Latin America, wrote in July 2007 to Ramon Garcia, who headed compliance in Mexico. We "just can't keep rubber-stamping unacceptable risks merely because someone on the business side writes a nice letter. It needs to take a firmer stand. It needs some cojones. We have seen this movie before, and it ends badly. It was not just in Mexico where the need to comply with America's AML laws rubbed up against the pursuit of profit, according to the report. The US has had sanctions against Iran since the hostage crisis in 1979. Until HSBC pulled out of the country in 2007, the bank harboured ambitious expansion plans in the Middle Eastern country. The report suggests a pattern of behaviour in which HSBC's European operations put pressure on their US counterparts to duck various US requirements, including one that demanded that if a wire transfer had any links to Iran it was made clear on the paperwork. An outside audit found that, between 2001 and 2007, 25,000 transactions processed by HSBC that involved Iran skirted this requirement. HSBC's pursuit in 2001 of business from Bank Belli, then Iran's largest commercial bank, appeared to prove too much for one senior executive at the bank's US division. "With the amount of smoke coming off this gun, remind me again why we should be supporting this business?," Douglas Stolberg, head of commercial and institutional banking, wrote to a colleague. The other consistent voice to emerge from the report is that of the bank's beleaguered compliance department in the US. Carolyn Wind, who ran compliance in the US between 2001 and 2007, was dismissed for complaining about a lack of resources. Between 2006 and 2009, less than 200 of HSBC's 16,500 staff in the US worked in compliance to monitor wire transfers that had soared to total $94.5 trillion in 2005. In the autumn of 2009, as US scrutiny from US authorities was beginning to emerge, HSBC hired a former US Treasury official, Wyndham Clark, to help run its US compliance. Nine months into the job, he wrote that "with every passing day I become more concerned ... if that's even possible." Two months later he quit. Although this week's hearing is over, HSBC still faces a fine from the Department of Justice that could be up to $1bn. In January, HSBC hired as its chief lawyer Stuart Levey, a former Treasury official who had been in charge of enforcing anti-money laundering laws and pursuing violations of the financial sanctions the US has in place. Levey told the committee that "being compliant and having the right controls in place is in our (HSBC's) long-term financial interest." The pressure on the British bank to prove that it means it has never been greater.