Last Week Tonight With John Oliver (2014) s12e19 Episode Script
Deferred Prosecution Agreements
Welcome to "Last Week Tonight".
I'm John Oliver, thank you for
joining us. It has been a busy week.
The Corporation for Public Broadcasting
announced it would have to shut down,
Trump responded to a weak jobs report
by firing the person
in charge of labor statistics,
and this happened.
High Noon is recalling some
of its popular vodka seltzers
because they were mislabeled
as energy drinks.
The FDA says cases of High Noon's
Beach Variety 12-pack
contained cans that are labeled
as Celsius Astro Vibe Sparkling
Blue Razz flavored energy drinks.
This mistake could result in someone
accidentally drinking alcohol.
I don't know
what's actually worse there,
someone accidentally drinking alcohol
or someone trying on purpose
to drink something called
"Astro Vibe Sparkling Blue Razz",
words that'd feel more at home
on a container of discount lube,
or an unregulated edible slime
that gave '80s kids weird thyroids.
But sadly, we don't have time
to get into all that
because, to quote the least horny
message you could get on Hinge,
we need to talk about Gaza.
Which, as you probably know, is
in the midst of a devastating crisis.
The world seeing images like these,
desperate families in Gaza,
reaching through bars,
begging for food.
The Hamas-run Health Ministry
says 147 people have died
from famine and malnutrition,
88 of them children.
Today in Gaza City,
this mother carrying home
a single bowl of thin soup,
her three children then
gathering around to eat.
But Israeli Prime Minister Benjamin
Netanyahu insists there's no starvation.
There is no policy of starvation in Gaza
and there is no starvation in Gaza.
Yeah,
are you sure about that though?
Because we can all see it
right in front of us.
And it's frankly insulting to think
you can deflect our attention
with all the skill
of a shitty magician.
"Ladies and gentlemen, there is
nothing in this hat."
Fuck off, I can see its ears and it
smells like rabbit shit in here!
How stupid do you think we are?
And it is notable that, at this
point, even Trump isn't buying it.
Prime Minister Netanyahu said
there's no starvation in Gaza,
do you agree with that assessment?
I don't know.
I mean, based on television,
I would say not particularly,
'cause those children look very hungry.
Okay, describing starving children
as looking "very hungry"
is a massive understatement, right up
there with "we were just friends".
But while that was a rare moment
of Trump expressing
something resembling empathy,
he still managed to make
everything about himself,
despite something a little distracting
happening just off camera,
and see if your ears notice it.
You have a lot of starving people.
The United States recently,
just a couple of weeks ago, we gave
60 million, that's a lot of money.
No other nation gave money.
But we gave 60 million,
nobody said even thank you.
You know, thanks.
Somebody should say thank you.
Okay, before we go any further,
I love that no one thought to ask
the bagpiper to stop playing
or for Trump to stop talking.
Instead, they went
with option three:
let them both simultaneously blow
hot air through their tiny holes.
And look, I hate the bagpipes.
They sound terrible,
and anyone playing them
looks like they're giving head
to an upside-down ostrich.
But if there were ever a good time
for bagpipes to ruin a moment,
Trump making himself the victim
during a humanitarian crisis
is definitely it.
Now, he is overstating how much
the U.S. has given there,
and understating how much
everyone else has,
but regardless, experts agree
the amount of aid getting into Gaza
is still not nearly enough.
But that has less to do
with how much has been given,
and more to do
with how aid is being distributed.
Because after nearly three months
of Israel blockading all food into Gaza,
in May, they shifted aid distribution
away from the UN and other NGOs
to a new organization called
the Gaza Humanitarian Foundation,
which is "backed by the American
and Israeli governments".
It's a brand-new organization
that's never distributed aid before,
and on its watch,
the number of distribution sites
has been dramatically reduced.
Not just that, the openings
of the four sites it's operating
are often announced
with just a few minutes' warning,
and they can remain open for as little
as eight minutes at a time.
Eight minutes can seem
like an age in some contexts,
like during a pap smear,
or when Dave Matthews says
he's only going to do
one more song.
But it is not enough for thousands
of people to get food safely.
And these sites are dangerous.
The AP's reported
"more than 1,000 Palestinians
have been killed by Israeli fire"
"while seeking aid since May",
most of them near those sites.
And while Israel's recently
made a big show
of coordinating
air drops with foreign governments,
that's far less effective
than you might think.
Experts say air drops should be
considered as an absolute last resort,
because they're very expensive,
often ineffective, and not sustainable.
Journalists who've tagged along on
those drops have seen that borne out.
What you see here
are about 20 pallets of aid.
That's roughly the equivalent
to one truck entry into Gaza.
It certainly looks good,
everything matters,
but it's not nearly enough.
The World Food Programme says
they need at least 600 trucks
entering Gaza by road
every single day
if they are going to make
any dent in this crisis.
Pallets of aid were parachuted down
to the scorched earth below,
but this can also be hazardous.
Here you see Palestinians chasing
the air drops into the sea,
only to retrieve
soggy packets of food.
Yeah, air dropping aid in Gaza
is a great way to deliver food,
as long as you want it to arrive both
"not enough" and "in the ocean".
And it's not just ineffective
as a food-delivery system,
it's dangerous and demeaning.
If you order DoorDash,
you don't want the app to tell you,
"Your burrito is in
the Hudson River. Go fetch."
And Israel's explanations
for why they've shifted to this model
just don't stand up.
They've repeatedly claimed the UN
is not distributing aid,
though, as the UN points out,
that's mainly because
"Israel frequently denies or delays
its requests to bring in convoys."
They've also claimed UN aid was
routinely getting stolen by Hamas,
though two top Israeli military
officials reportedly admitted
there's no proof of that happening.
Incredibly, some in the U.S. continue
to minimize the horrors in Gaza.
When the Times appended an editor's
note to a front-page article
about a malnourished child,
acknowledging he had
"pre-existing health problems",
some pounced on that
or even questioned
whether we should believe any of
the photos of starvation our of Gaza.
You've got the New York Times,
that has a photo
of this poor Palestinian kid
who is all skin and bones,
and they're assigning the responsibility
to starvation in Palestine.
Turns out he has cystic fibrosis
and has absolutely nothing to do
with the Israelis.
Another one showed
a very emaciated child,
but it was because
he had a disease,
he was standing next to a mother who,
by any standards,
let's just say
she was very well fed.
So, somebody was eating, it may
not have been the child.
I'm always reluctant to put too much
stock in images coming out of Gaza,
that phrase, 'cause they're manipulated
and they're masters of propaganda,
and they're fine
having their own children starve
just as long
as they can put them on camera
and show them off to the world.
Fuck that shit.
For what it's worth, first,
a child can have a pre-existing
condition and be starving.
Sick children, and this is true,
also need food to live.
Second, Bad Santa, I don't think
you can disprove mass starvation
in an area with "I saw
a picture of one sturdy mom."
Third, I kind of hoped we were done
with Megyn Kelly, as a society.
And collectively,
you don't actually have to litigate
this case one photo at a time.
The UN World Food Programme
has said of Gaza,
"Nearly half a million people
are facing famine-like conditions"
"and a third of the population
is going days without food."
And there've been similar assessments
from the IPC, WHO,
Doctors Without Borders, and over
100 other agencies and organizations,
including Amnesty International,
Christian Aid, Mercy Corps and Oxfam.
And even if you distrust
the UN and those organizations,
these Israeli human rights groups
have come to the same conclusion
as has Israel's oldest
daily newspaper,
as have multiple first-hand accounts
from physicians on the ground.
What's happening in Gaza
right now is a famine.
All the information we have
points to that,
except for the word
of this fucking guy,
and a few adult junior detectives
squinting at each photo
of a skeletal child to figure out if
they're the right kind of dying.
And it's really hard not to think
that the reason aid isn't getting
into the people in Gaza
is that Netanyahu and key people
in his government don't want it to
and some have made this explicit.
Back in May,
his national security minister
called the entrance
of aid trucks into the Gaza strip
"a grave mistake
that delays our victory."
And his finance minister
has said "it may be just and moral"
to starve Gaza until
Israeli hostages are returned,
but
"no one in the world would let us",
basically complaining
that the world is cockblocking him
from committing genocide better.
And that is the argument for sustained
international pressure here.
And the country best positioned
to apply it is this one,
the one that gave Israel nearly
18 billion in military aid
during
the first year of this war alone.
Look, "Gaza is starving" is a sentence
that's objectively true.
But it's also slightly misleading
because it's too passive.
Gaza is being starved, by Israel.
And what's so frustrating
is that most humanitarian disasters
don't come with solutions
as straightforward as this one.
Hurricanes don't tend to have
kill switches that you can flip.
You can't stop a pandemic
by simply hanging
a "Do Not Infect" sign on your door.
But this famine
truly does have an off button,
as it's entirely man-made,
and we need to fucking press it.
As one expert on famines has said,
if Netanyahu "decided tonight"
"that every Palestinian child in Gaza
should have breakfast tomorrow,"
"it could undoubtedly be done."
So, it's long past time for the U.S.
to stop being complicit in this,
because
unless we actively stop him,
Netanyahu seems more than willing
to continue choking off aid
to the point that what's getting
through is, sometimes quite literally,
a drop in the fucking ocean.
And now, this.
And Now: WDKY Anchor Tyler Melito
Is a Disney Adult.
It is time for "What Day Is It"
and today,
we're embracing the magic of Disney.
Okay.
No, he would have that one.
- He would. Of course.
- 'Cause he's a Disney adult.
Pixar fans can now step inside
the fashion lab of Edna Mode.
- No capes!
- He's a Disney adult.
- Well, you're a big fan of Disney.
- I am.
Do you like
skipping the lines at Disney?
All the time.
- Have you ever had ratatouille?
- Yes.
- Did you have it in Disney?
- Yes.
Well, that's the thing now,
especially with the Disney movies,
because I have Disney+. I just
like Marvel, "Moana" all that stuff.
Do you have a favorite part
of Disney World?
Magic Kingdom.
So, that's a lot of fun
if you plan on going to Disney,
a Disney World vacation,
as Tyler often does.
- I will be going in October.
- There you go.
The new show features some
of Disney and Pixar's greatest hits,
including "Cinderella", "The Lion King",
"Toy Story," and "Wall-E".
I'm sorry. Wall-E.
Let's just keep it moving. I get it.
Starstruck.
I am starstruck.
You really are a Disney adult.
I would love to get married
in the Magic Kingdom one day.
I know it will never happen,
'cause it's too expensive,
but that's just me. Nothing?
Oh, boy.
Moving on. Our main story
tonight concerns crime.
Once again, voted number one
by "Reasons to Tiptoe" magazine.
Specifically, we're going to talk
about corporate crime,
something our current president is,
famously, not that concerned about.
Not only was he convicted on 34
counts of falsifying business records,
but long before he was president,
CNBC ran a segment about
a law banning American companies
from bribing foreign governments,
I'll let this anti-corruption activist
pick up the story up from there.
I was asked to come on CNBC and
give the anti-corruption argument.
And I remember laughing
at the time, saying,
"Is there somebody that you found"
"who's willing to give
the pro-corruption argument?"
Now, every other country
goes into these places,
and they do what they have to do.
Sad part, every other country
in the world is doing it.
We're not allowed to. So, it
puts us at a huge disadvantage.
Yeah, they clearly
got the right guy there.
I can only assume the producer
at CNBC said to their assistant,
"We need someone willing to give
the procorruption argument."
"Who's the most unethical person
you can think of?"
To which they replied,
"Easy, the Hamburglar."
To which the producer said, "No. Wait,
what? No. Like, a real person."
To which they said, "Wait,
the Hamburglar's not real?!"
To which the producer said,
"No. He's a fictional character."
To which the assistant replied,
"Well, there goes that dream."
To which the producer said,
"What dream?"
To which they said,
"Of marrying the Hamburglar!"
To which the producer said,
"I'm sorry, what?!"
To which the assistant said,
"Let's not talk about it.
How about we get Donald Trump?"
To which the producer said, "That
is a good idea! Are you crying?"
To which the assistant said,
"Yeah, sorry, this Hamburglar news
is just hitting me pretty hard."
To which the producer said,
"Did you really have
a crush on a cartoon beef thief?"
To which they replied,
"The heart wants what it wants!"
before storming off
to go cry in a bathroom stall.
Anyway. The point is,
of course they got Donald Trump
to defend corruption on live TV.
And since taking office,
his administration's halted or dropped
more than 100 enforcement actions
against corporate misconduct,
and he even issued the first-ever
pardon of a corporation,
pardoning
this cryptocurrency exchange,
which had been "sentenced
to a 100 million dollars fine"
"for violating an anti-money
laundering law."
It's frankly no wonder experts
have called this moment
"the ripest environment for corruption
by public officials"
"and business executives
in a generation."
Though, to be fair,
it's not like the environment was
un-ripe before Trump took office.
Republican and Democratic
administrations have both taken
a pretty lax approach
to corporate crime for a while now.
You might've noticed,
stories about corporate malfeasance
rarely end in executives going to jail
or the companies getting shut down.
And tonight's story is going to focus
on a key reason for that:
deferred prosecution agreements,
or DPAs.
They're an out of court settlement for
companies to avoid being prosecuted.
Essentially, the government
will come to a company and say,
"Hi company, government here.
You did a crime,"
"and we have enough evidence
to prosecute you."
But instead of then doing that,
they strike a deal
where if the company behaves itself
for a certain amount of time,
the criminal charges
eventually disappear.
Sometimes,
they'll go with an even weaker option,
a non-prosecution agreement,
or NPA,
which doesn't even
have to be filed in court.
But either way, they're terms
that tend to slide past you
whenever you hear them
on the news.
The Justice Department announcing
a deferred prosecution agreement
with Teva Pharmaceuticals.
FirstEnergy entered into what's called
a deferred prosecution agreement.
McKinsey has also entered into
a deferred prosecution agreement.
Uber has entered into
a non-prosecution agreement.
Credit Suisse close to finalizing
that deferred prosecution agreement.
What's known as a deferred
prosecution agreement.
A deferred prosecution agreement.
Every bank on Wall Street has
a deferred prosecution or an NPA.
Every bank has more than one,
most likely.
It's true. AIG has two NPAs
and a DPA,
Barclays has a DPA and an NPA,
Credit Suisse has a DPA,
J.P.Morgan has an NPA and a DPA,
Lloyds has two DPAs,
the Royal Bank of Scotland has a DPA,
Wachovia has a DPA and an NPA,
and UBS
has a DPA and two NPAs.
And just so you know,
when I say a sentence like,
"UBS has a DPA and two NPAs",
I do hear myself.
I'm fully aware that one day this
show will just be me reading
one long acronym for 40 minutes,
we'll have achieved our perfect form,
and on that day, I'll finally
be allowed to die.
But the point is, these agreements
are absolutely everywhere.
Honestly, the only things more
ubiquitous than DPAs on Wall Street
are fleece vests
and undiagnosed sociopaths.
Unfortunately, as you're about to see,
DPAs don't really do much.
In fact, sometimes, companies
that have done massive harm,
have used them to literally
get away with murder.
So given that, tonight, let's talk
about deferred prosecution agreements:
where they came from,
how ineffective they can be,
and a few amazing examples
of what they can look like in practice.
And let's start with the fact
that DPAs were never actually
intended to be used on corporations,
the concept grew out of a 1974 law
that was meant to help
firsttime and juvenile non-violent
offenders avoid prosecution
so they
could focus on rehabilitation.
But that is not
how we use them today.
And you can trace the explosion
of corporate DPAs
back to one of the most famous times
a large company was prosecuted
in this country: Arthur Andersen.
It was the accounting firm for Enron,
whose name is now synonymous
with accounting fraud.
Very basically,
with the help of Andersen,
Enron completely invented future
earnings for itself.
And when the government
tried to investigate,
Andersen undertook
a massive document purge
during which they deleted around
30,000 computer files and emails
and, at one point, shredded
more documents in three days
than they usually destroyed in a year,
something that became so famous,
it was even parodied
in a Heineken commercial,
where the documents became
snowflakes and the tag line was,
"To all those who weren't naughty
this year, happy holidays."
And just think how remarkable that is:
a beer company thought to themselves,
"We could just show off our crisp,
refreshing product in this commercial."
"But instead, let's give people
what they really want this Christmas"
"and say 'fuck you'
to an accounting firm."
The Justice Department got a lot of
blowback for prosecuting Andersen.
Because, at the time, it was a massive
firm with 28,000 employees,
many of whom felt
like they'd done nothing wrong.
I am Andersen!
After weeks of suffering in silence,
Andersen workers found their voice.
Fight! Stand tall!
Don't give up!
By the grace of God, we're gonna win
'cause we're Andersen, yeah!
Everybody you see out here is
worried about their job right now.
We're all being penalized
for something that we didn't
have anything to do with.
Yeah, Arthur Andersen's employees
felt a range of emotions
from resentment to anxiety to a level
of unbridled exuberance
best described as "'Price Is Right'
contestant who just won a Honda Civic."
And they were right
to be concerned.
Andersen being convicted of a felony
meant they lost the accounting license,
which, for an accounting firm,
is generally not great for business.
The company eventually folded,
thousands of people lost their jobs,
and many,
like this Andersen partner,
placed the blame
squarely on the government.
In the history of the world
of business, this will come out,
in my judgment, as the largest act
of corporate murder ever.
Okay, that is a wild overstatement,
because what happened to Andersen
is a lot more complicated than that.
The company had started shedding
clients long before their conviction,
and the SEC was already
investigating them.
So, the truth is, Andersen was likely
heading out of business anyway.
Saying this prosecution is what
doomed Andersen
is like saying that the ground
is what doomed the Hindenburg.
Sure, it might've been the final
issue it encountered,
but things weren't exactly smooth
sailing before then.
But after Andersen, prosecutors
became very reluctant
to risk putting
a company out of business.
And that is when
DPAs became popular.
In the decade
prior to Andersen's collapse,
DPAs and NPAs had been used
just 18 times.
But in the 14 years following,
DOJ entered into 419 such settlements.
And the argument for DPAs
is that they prevent innocent employees
from getting hurt,
dissuade future wrongdoing,
and still allow the DOJ
to go after individuals.
But there are problems
with literally all that.
For starters, nearly half
of those getting deferred
and non-prosecution agreements
paid no fine at all.
And when it comes to individuals,
in two-thirds of cases,
no employees were prosecuted.
To show you just how glaringly apparent
this system's shortcomings can be,
we're going to focus on three
companies: GM, HSBC, and Boeing.
We actually talked about GM
all the way back in our first season.
But just in case I wasted my precious
let's call it "youth"
shouting at you about things
you don't remember,
here is a quick refresher
on what the company did wrong.
Last year, GM began recalling
two and a half million cars
with ignition switches that could
suddenly shut off the engine,
cutting off the power to the airbags
and disabling the power steering
and power brakes,
causing crashes.
GM has since determined
that the switches caused accidents
that led to 124 deaths
and 273 injuries.
Yeah, it was a wild story.
GM sold cars with faulty switches
that could shut off the engine,
steering, brakes and airbags,
despite the fact that they are,
and this is true,
some of the key differences between
something being an automobile,
or a metal coffin
moving at 70 miles an hour.
And there was evidence
the company knew about the problem.
In 2008, they showed their employees
a PowerPoint encouraging them
to avoid words like "problem",
"safety" and "defect"
when writing about GM's cars.
And added, as a fun joke, that
they should also probably stay away
from terms like "Kevorkianesque",
"tomblike", "maniacal"
or "rolling sarcophagus."
And I kind of hope that
that just inspired GM employees
to use other options instead like
"The Widowmaker",
"Chitty Chitty Smash Bang",
"Final Destination: The Car"
and "The Lean Mean
James Dean Machine."
GM reached a DPA
with the government in 2015,
which meant
they didn't have to plead guilty,
just agree to a "statement of facts"
about their misconduct.
For instance, they admitted
that by early 2012,
they not only knew about the problem,
they were aware of several incidents
that may have been caused
by the defective switch.
And while the law required GM
to report such knowledge
to the government within five days,
it took them approximately 20 months,
which, fun fact, is around the length
of an elephant's gestational period.
And if writing an email takes longer
than making an elephant from scratch,
there is clearly something else
going on.
Now, as part of GM's DPA, they did
have to pay a 900 million fine,
and Mary Barra, their then,
and current, CEO,
went to great lengths to argue that
the deal was not letting them off easy.
This is a tough agreement.
It further highlights the mistakes
made by certain people in GM,
and it imposes significant
penalties and obligations.
Okay, but I don't know how
"significant" a 900 million fine was
to a company whose profits were
just under 10 billion that year.
I'm not saying it's nothing,
but 9% of one year's profits
just doesn't seem enough
for essentially marketing
the automotive equivalent
of the Titan submersible.
Also, while she said mistakes were
made by "certain people at GM",
notably, no individuals ended up
facing charges for any part of this.
And that's something extra galling
for people like Candice Anderson.
She lost control of her car
in a crash that killed her boyfriend
and when GM conducted an internal
review of the accident in 2007,
they ruled
that their car was to blame.
Unfortunately,
they never told anyone that,
instead allowing Candice to plead
guilty to negligent homicide
five months later.
Thankfully, her conviction
has since been overturned,
but the way that she sees it,
that's not nearly enough.
There's someone within General
Motors that should be held responsible.
Are you saying that you think
individuals at General Motors
should stand trial?
Yeah, I do.
They didn't have a problem
sitting by while I was charged.
Yeah, I get that. If someone
does something terrible to you,
it is understandable to want them
to get a taste of their own medicine
it's one of the many reasons
why I'd personally love to see
someone shit on a pigeon.
Yeah, not so much fun when
we do it to you, is it, pigeons?
And look, thankfully,
GM hasn't killed any more people
with its cars since then,
as of taping.
But other companies with DPAs
have shown a much greater
propensity for recidivism.
And that brings us
to our second example, HSBC.
A few years back, it got in trouble
for allowing Mexican cartels
to launder at least 881 million
in drug trafficking proceeds
and facilitating approximately
660 million in transactions
involving sanctioned regimes
like Burma, Iran, Cuba and Libya.
Here is how bad it was.
At one point, Mexican law enforcement
recorded a cartel leader on a wiretap
saying HSBC was
"the place to launder money"
and the Sinaloa cartel deposited
so much money in their bank
that "the cartel designed special cash
boxes to fit HSBC's teller windows."
Which is surprisingly
considerate in a way, after all,
who hasn't been stuck in a teller line
behind some guy trying to stuff
a blood-soaked duffel full of cash
through the window?
Finally, a cartel that thinks
about other people's time!
Now, in response, HSBC put
together a new compliance department,
but it wasn't exactly inspiring,
as this man will tell you.
His name is Everett Stern
and he once had a dream.
Tell everyone
about your dream, Everett.
Sure, I mean, my dream
was to join the CIA.
Okay, thanks, Everett. That sounds
like a really nice dream.
Unfortunately, Everett got rejected
by the CIA,
but he did get hired
as a compliance officer at HSBC.
Which he was excited about
until he got there.
I remember, like, my first day on
the job. It was a shopping center.
It wasn't like a bank building.
I was expecting to show up
at this bank building,
and I'm in this suit.
And there were all these people,
like, in jeans and T-shirts
and I didn't understand what
was going on, and when I walked in,
there are all these empty cubicles
and the walls were half painted,
and there are maybe 15 compliance
officers in the whole department.
At the time, I thought they hired me
'cause I was like this smart guy
and I had it all going
and everything.
No, they hired me 'cause I was an idiot
and I didn't know what I was doing.
Yeah!
As far as Everett could see,
HSBC was intentionally
looking to hire idiots.
And the only time that that is
an acceptable hiring strategy
is if you're casting
a baby food commercial.
We need to hire, you know,
one of those tiny idiots
who doesn't know what they're
doing. A baby! Sorry, a baby.
That's the word.
We need to hire a baby.
And while HSBC was going through
the motions of compliance publicly,
internally, they were going to egregious
lengths to avoid it altogether.
For example, the Treasury keeps
a list of sanctioned organizations
that banks aren't allowed
to do business with.
On that list is a company called TAJCO,
which has had ties to Hezbollah.
HSBC's system should've automatically
flagged transactions involving TAJCO
and yet even a self-described idiot
who didn't know what he was doing
could see that the bank was processing
thousands of dollars for them.
And I'll let him describe how he
discovered it, and what he did next.
I noticed they were putting
little dots and dashes in the actual
names in the wire filter.
So, for instance, if you had
TAJCO that was sending money
from Hezbollah
to some other organization,
instead of T-A-J-C-O,
that's the normal name for it,
in the HSBC wire filter, it would be
T-A-J-dot-C-O or T-A-J-dash-C-O.
And that's how they criminally
manipulated the wire filter
to allow money laundering
for terrorists and drug cartels.
This is why, three weeks in, I started
passing information to the CIA.
Fuck yeah, you did, Everett!
Fuck yeah, you did!
That is great news for him
and frankly terrible news
for whoever thought it was a good
idea to hire an aspiring CIA officer
to oversee your extremely lazy attempts
to launder money for criminals.
And once the government started
poking around within HSBC,
they quickly found
some pretty compelling evidence.
Internal documents show HSBC
executives knew what they were doing.
"We are allowing organized criminals
to launder their money",
wrote one executive.
It is hard to imagine how the evidence
could get more damning than that.
Unless, maybe, the email
signature included the phrase,
"Sent from my crime phone",
followed by the "shh!" emoji.
And yet, incredibly, the government
brought no charges against individuals.
The bank itself just got a DPA.
And the terms of it
seems more than a little weak.
For example, it agreed to pay
a fine of almost 2 billion dollars,
which might sound like a lot,
until you remember they made
over 13 billion in profits
that year alone.
Maybe the DOJ really thought that
a hefty but entirely manageable fine
would make HSBC change their ways.
The bank did agree to monitoring,
and apparently even issued
their U.S.-based staff certificates
with little parrots on them,
reading "I am a Changed Bird."
But were they?
Because even that monitoring program
illustrates something immensely
frustrating here.
Because DPAs
aren't criminal proceedings,
monitoring reports on whether
or not companies are complying
aren't required to be public record.
So, we don't really know what
HSBC did to clean up its act.
But the glimpses we got during
that period aren't great,
as in the bank's own annual report,
they openly admitted that their monitor
expressed significant concerns
about the pace of their progress
and instances
of potential financial crime.
But despite that, their DPA expired
as planned at the end of 2017.
And the government dropped
all charges against them.
So, they were in the clear,
until the very next month,
when this happened.
HSBC is said to have agreed
to pay 100 million dollars to resolve
a U.S. Justice Department investigation
into the rigging of currency rates.
A source tells the deal includes
a deferred prosecution agreement
and a promise to help with the criminal
case against former traders.
Yeah, they were caught again
and they got another DPA!
That is ridiculous. At this point,
it's not even
a deferred prosecution agreement,
it's more like prosecutorial edging.
I've said it before and I'll say it
again: let the government cum.
And that is the thing here,
DPAs and their associated fines
have now become a routine cost
of doing business.
Which is a real problem, because
the stakes can be incredibly high.
Which brings us to our final company,
Boeing.
Last year, we did a whole segment
about its fall from grace
and discussed
their infamous 737 MAX planes,
which have been involved in two
crashes that killed 346 people.
I won't recap the whole thing,
but suffice to say,
there were flaws
with the aircraft's design,
and they weren't exactly
a secret within the company.
The 737 MAX became Boeing's
bestselling jet ever, but in 2017,
just as the planes were taking
to the skies worldwide,
a Boeing employee sent
this message to a colleague,
"This airplane is designed by clowns,
who in turn are supervised by monkeys."
Other employees calling the design
"piss poor" and comparing the fixes
to patching a "leaky boat".
In October 2018,
Lion Air flight 610, a 737 MAX,
crashed,
killing 189 people on board.
In May of that year, as Boeing
was pursuing FAA approval
for the MAX flight simulator,
one test pilot wrote,
"I'll be shocked if
the FAA approves this turd."
Yeah, it seems like the only real
disagreement within Boeing
was on
what hilarious language to use
when describing
their catastrophic products.
"Okay, so we got piss poor,
leaky boat, turd, you know what?"
"Can someone get GM on the phone"
"and see if we can borrow
'Kevorkianesque' from them?"
"I kind of like the sound of that."
Following those crashes,
Boeing entered into a DPA in 2021,
admitting to misrepresentations
to regulators
about a key software feature
tied to the crashes.
It also agreed to pay a fine
and show three years of good behavior
in exchange
for avoiding prosecution.
It's an agreement
that many felt was toothless,
especially given one judge involved
in the case later called
what Boeing had done "the deadliest
corporate crime in U.S. history."
And following that DPA,
things didn't seem
to improve much at Boeing.
Because by the start of 2024,
just two days before their three-year
probationary period was set to end,
this happened.
What was supposed to be a short trip
from Portland to Ontario, California
for Garrett Cunningham
turned out to be
one of the most frightening
experiences of his life.
A gush of air, I look to my left,
and part of the plane is gone.
Yeah, not ideal!
It is never good when you feel
a sudden gush of air on a flight.
Even if the plane
hasn't just cracked open,
odds are it's gonna be the toddler
in the seat behind you
breathing directly on your face,
or your seatmate cracking
the lid on a tub of tuna salad
they brought with them.
There is no surprise whoosh of air that
brings good tidings in a metal sky can.
But in this case, yeah, a door plug
blew off a 737 MAX mid-flight,
an incident that was a clear
indication, according to the DOJ,
Boeing had violated its initial DPA.
But instead of then prosecuting them,
the DOJ offered them a plea deal,
which just required them
to pay another fine,
boost their spending on safety
and compliance programs,
and report to an independent monitor
overseeing their compliance.
And this, understandably,
angered some of the family
members of crash victims.
Here is the mother of one
of them, summing it all up.
It seems that, beginning of January,
just two days
before the expiration of the DPA,
"Oops! I Did it Again."
This is Boeing's song,
"Oops! I Did it Again."
Yeah, that woman's outrage
is completely justified.
It's honestly smart to cite the musical
canon of Britney Spears,
given that Boeing essentially
just plead not that innocent.
But it gets worse,
because this year,
the Trump administration downgraded
Boeing's punishment
to a non-prosecution agreement,
removing even the hypothetical chance
of prosecuting them
over this in the future.
Which is just completely
infuriating, unless, I guess,
you're this guy on CNBC, who chose
to announce the news like this.
The DOJ says it expects to file
the written agreement with Boeing
by the end of the week.
Should be viewed as good news.
I wouldn't be surprised
to see the stock move higher.
Yeah, great news, everyone!
The stock should move higher,
so I guess that's at least one thing
Boeing can keep in the fucking air.
But even if that is good news
for stockholders,
it's clearly not great
for anyone else.
Because while it means
that Boeing does have to pay out
an additional 444 million
into a crash victim's fund,
they also avoid being branded
a convicted felon
and will no longer face oversight
by an independent monitor,
but instead will hire
a "compliance consultant".
As one consumer rights
advocate puts it,
"This deal isn't a slap on the wrist,
it's barely a feather on the wrist."
Look, clearly, when it comes
to corporate accountability,
we have a problem here.
Because a company engages
in flagrant misbehavior,
even putting evidence of it in writing,
people get hurt,
they're caught red-handed,
the government fines them and says,
"You better not do that again"
then they do,
and the whole cycle restarts.
This is not sustainable.
And unfortunately,
I wouldn't expect any of that to change
for at least, say,
three-and-a-half years.
But it is worth asking,
for a hypothetical future
when we have a government that
isn't run by a pro-corruption felon,
what could we be doing better
to hold corporations accountable?
Well, we could make DPAs more
of a deterrent by making the fines
much more serious and prosecuting
executives a lot more often.
We could also bring both DPAs and
NPAs into the official legal system,
so that their monitoring
would be more transparent
and companies would build up records
of misconduct
instead of constantly
getting to wipe their slate clean.
But the hard truth here is,
if we want more accountability,
the government is going
to have to show more willingness
to prosecute repeat offenders,
even if it affects a large company's
ability to do business.
Which really doesn't seem
too much to ask.
Because you've seen tonight just how
much damage companies can do
when they operate unchecked.
And right now, we have a system
where essentially corporations can,
with very limited resistance,
sell cars with a surprise off button,
operate as a haven for blood money,
and build planes that unbuild
themselves in the sky.
I'd argue that to not make significant
changes to a system like that
would be, if I may quote GM's most
cursed PowerPoint of all time,
"fucking maniacal."
And now, this.
And Now: GB News Attempts
to Understand Gen Z.
Generation Zed,
let's have a pop at them.
They don't wash up, I think.
22% leave dirty dishes in the kitchen
sink for 3 nights before washing up.
Research commissioned
by Halfords shows
that a quarter of Generation Zed adults
would not change a light bulb
because they believe
stepladders are too dangerous.
Apparently, Gen Zed don't like to dance,
they find it really embarrassing.
Because they're a generation
of smartphones, aren't they?
So, they all film each other.
This lot really do seem quite dull.
What do they do
if they don't have a drink and they
don't socialize, what do they do?
They are online. They're
online and doing a lot of moaning.
They can't order off menus,
did you know that?
That was a story that came out.
They can't tie their shoelaces.
We also find out that Gen Zeds,
in general,
they don't do
a 9:00 to 5:00 pattern.
They don't drink alcohol
and they don't have sex.
The younger generation
don't appear to be going out
and getting blasted as much as we
used to, which seems to be a shame.
I don't like this sober Gen Zed.
I think it's good if they're having
a few drinks.
It's one thing to stop drinking.
It's another thing to never start.
Maybe they're fed up watching
their parents get drunk, too.
And I think that was a lot of it.
They looked at the lifestyle
and the attitudes.
And the sort of bordering
on alcoholism of their parents
and said, no, actually
that's not the life for us.
How do we go from that to a boy
who's lost his monkey, Nigel?
That's our show, thanks for watching.
We'll see you next week, good night!
I'm John Oliver, thank you for
joining us. It has been a busy week.
The Corporation for Public Broadcasting
announced it would have to shut down,
Trump responded to a weak jobs report
by firing the person
in charge of labor statistics,
and this happened.
High Noon is recalling some
of its popular vodka seltzers
because they were mislabeled
as energy drinks.
The FDA says cases of High Noon's
Beach Variety 12-pack
contained cans that are labeled
as Celsius Astro Vibe Sparkling
Blue Razz flavored energy drinks.
This mistake could result in someone
accidentally drinking alcohol.
I don't know
what's actually worse there,
someone accidentally drinking alcohol
or someone trying on purpose
to drink something called
"Astro Vibe Sparkling Blue Razz",
words that'd feel more at home
on a container of discount lube,
or an unregulated edible slime
that gave '80s kids weird thyroids.
But sadly, we don't have time
to get into all that
because, to quote the least horny
message you could get on Hinge,
we need to talk about Gaza.
Which, as you probably know, is
in the midst of a devastating crisis.
The world seeing images like these,
desperate families in Gaza,
reaching through bars,
begging for food.
The Hamas-run Health Ministry
says 147 people have died
from famine and malnutrition,
88 of them children.
Today in Gaza City,
this mother carrying home
a single bowl of thin soup,
her three children then
gathering around to eat.
But Israeli Prime Minister Benjamin
Netanyahu insists there's no starvation.
There is no policy of starvation in Gaza
and there is no starvation in Gaza.
Yeah,
are you sure about that though?
Because we can all see it
right in front of us.
And it's frankly insulting to think
you can deflect our attention
with all the skill
of a shitty magician.
"Ladies and gentlemen, there is
nothing in this hat."
Fuck off, I can see its ears and it
smells like rabbit shit in here!
How stupid do you think we are?
And it is notable that, at this
point, even Trump isn't buying it.
Prime Minister Netanyahu said
there's no starvation in Gaza,
do you agree with that assessment?
I don't know.
I mean, based on television,
I would say not particularly,
'cause those children look very hungry.
Okay, describing starving children
as looking "very hungry"
is a massive understatement, right up
there with "we were just friends".
But while that was a rare moment
of Trump expressing
something resembling empathy,
he still managed to make
everything about himself,
despite something a little distracting
happening just off camera,
and see if your ears notice it.
You have a lot of starving people.
The United States recently,
just a couple of weeks ago, we gave
60 million, that's a lot of money.
No other nation gave money.
But we gave 60 million,
nobody said even thank you.
You know, thanks.
Somebody should say thank you.
Okay, before we go any further,
I love that no one thought to ask
the bagpiper to stop playing
or for Trump to stop talking.
Instead, they went
with option three:
let them both simultaneously blow
hot air through their tiny holes.
And look, I hate the bagpipes.
They sound terrible,
and anyone playing them
looks like they're giving head
to an upside-down ostrich.
But if there were ever a good time
for bagpipes to ruin a moment,
Trump making himself the victim
during a humanitarian crisis
is definitely it.
Now, he is overstating how much
the U.S. has given there,
and understating how much
everyone else has,
but regardless, experts agree
the amount of aid getting into Gaza
is still not nearly enough.
But that has less to do
with how much has been given,
and more to do
with how aid is being distributed.
Because after nearly three months
of Israel blockading all food into Gaza,
in May, they shifted aid distribution
away from the UN and other NGOs
to a new organization called
the Gaza Humanitarian Foundation,
which is "backed by the American
and Israeli governments".
It's a brand-new organization
that's never distributed aid before,
and on its watch,
the number of distribution sites
has been dramatically reduced.
Not just that, the openings
of the four sites it's operating
are often announced
with just a few minutes' warning,
and they can remain open for as little
as eight minutes at a time.
Eight minutes can seem
like an age in some contexts,
like during a pap smear,
or when Dave Matthews says
he's only going to do
one more song.
But it is not enough for thousands
of people to get food safely.
And these sites are dangerous.
The AP's reported
"more than 1,000 Palestinians
have been killed by Israeli fire"
"while seeking aid since May",
most of them near those sites.
And while Israel's recently
made a big show
of coordinating
air drops with foreign governments,
that's far less effective
than you might think.
Experts say air drops should be
considered as an absolute last resort,
because they're very expensive,
often ineffective, and not sustainable.
Journalists who've tagged along on
those drops have seen that borne out.
What you see here
are about 20 pallets of aid.
That's roughly the equivalent
to one truck entry into Gaza.
It certainly looks good,
everything matters,
but it's not nearly enough.
The World Food Programme says
they need at least 600 trucks
entering Gaza by road
every single day
if they are going to make
any dent in this crisis.
Pallets of aid were parachuted down
to the scorched earth below,
but this can also be hazardous.
Here you see Palestinians chasing
the air drops into the sea,
only to retrieve
soggy packets of food.
Yeah, air dropping aid in Gaza
is a great way to deliver food,
as long as you want it to arrive both
"not enough" and "in the ocean".
And it's not just ineffective
as a food-delivery system,
it's dangerous and demeaning.
If you order DoorDash,
you don't want the app to tell you,
"Your burrito is in
the Hudson River. Go fetch."
And Israel's explanations
for why they've shifted to this model
just don't stand up.
They've repeatedly claimed the UN
is not distributing aid,
though, as the UN points out,
that's mainly because
"Israel frequently denies or delays
its requests to bring in convoys."
They've also claimed UN aid was
routinely getting stolen by Hamas,
though two top Israeli military
officials reportedly admitted
there's no proof of that happening.
Incredibly, some in the U.S. continue
to minimize the horrors in Gaza.
When the Times appended an editor's
note to a front-page article
about a malnourished child,
acknowledging he had
"pre-existing health problems",
some pounced on that
or even questioned
whether we should believe any of
the photos of starvation our of Gaza.
You've got the New York Times,
that has a photo
of this poor Palestinian kid
who is all skin and bones,
and they're assigning the responsibility
to starvation in Palestine.
Turns out he has cystic fibrosis
and has absolutely nothing to do
with the Israelis.
Another one showed
a very emaciated child,
but it was because
he had a disease,
he was standing next to a mother who,
by any standards,
let's just say
she was very well fed.
So, somebody was eating, it may
not have been the child.
I'm always reluctant to put too much
stock in images coming out of Gaza,
that phrase, 'cause they're manipulated
and they're masters of propaganda,
and they're fine
having their own children starve
just as long
as they can put them on camera
and show them off to the world.
Fuck that shit.
For what it's worth, first,
a child can have a pre-existing
condition and be starving.
Sick children, and this is true,
also need food to live.
Second, Bad Santa, I don't think
you can disprove mass starvation
in an area with "I saw
a picture of one sturdy mom."
Third, I kind of hoped we were done
with Megyn Kelly, as a society.
And collectively,
you don't actually have to litigate
this case one photo at a time.
The UN World Food Programme
has said of Gaza,
"Nearly half a million people
are facing famine-like conditions"
"and a third of the population
is going days without food."
And there've been similar assessments
from the IPC, WHO,
Doctors Without Borders, and over
100 other agencies and organizations,
including Amnesty International,
Christian Aid, Mercy Corps and Oxfam.
And even if you distrust
the UN and those organizations,
these Israeli human rights groups
have come to the same conclusion
as has Israel's oldest
daily newspaper,
as have multiple first-hand accounts
from physicians on the ground.
What's happening in Gaza
right now is a famine.
All the information we have
points to that,
except for the word
of this fucking guy,
and a few adult junior detectives
squinting at each photo
of a skeletal child to figure out if
they're the right kind of dying.
And it's really hard not to think
that the reason aid isn't getting
into the people in Gaza
is that Netanyahu and key people
in his government don't want it to
and some have made this explicit.
Back in May,
his national security minister
called the entrance
of aid trucks into the Gaza strip
"a grave mistake
that delays our victory."
And his finance minister
has said "it may be just and moral"
to starve Gaza until
Israeli hostages are returned,
but
"no one in the world would let us",
basically complaining
that the world is cockblocking him
from committing genocide better.
And that is the argument for sustained
international pressure here.
And the country best positioned
to apply it is this one,
the one that gave Israel nearly
18 billion in military aid
during
the first year of this war alone.
Look, "Gaza is starving" is a sentence
that's objectively true.
But it's also slightly misleading
because it's too passive.
Gaza is being starved, by Israel.
And what's so frustrating
is that most humanitarian disasters
don't come with solutions
as straightforward as this one.
Hurricanes don't tend to have
kill switches that you can flip.
You can't stop a pandemic
by simply hanging
a "Do Not Infect" sign on your door.
But this famine
truly does have an off button,
as it's entirely man-made,
and we need to fucking press it.
As one expert on famines has said,
if Netanyahu "decided tonight"
"that every Palestinian child in Gaza
should have breakfast tomorrow,"
"it could undoubtedly be done."
So, it's long past time for the U.S.
to stop being complicit in this,
because
unless we actively stop him,
Netanyahu seems more than willing
to continue choking off aid
to the point that what's getting
through is, sometimes quite literally,
a drop in the fucking ocean.
And now, this.
And Now: WDKY Anchor Tyler Melito
Is a Disney Adult.
It is time for "What Day Is It"
and today,
we're embracing the magic of Disney.
Okay.
No, he would have that one.
- He would. Of course.
- 'Cause he's a Disney adult.
Pixar fans can now step inside
the fashion lab of Edna Mode.
- No capes!
- He's a Disney adult.
- Well, you're a big fan of Disney.
- I am.
Do you like
skipping the lines at Disney?
All the time.
- Have you ever had ratatouille?
- Yes.
- Did you have it in Disney?
- Yes.
Well, that's the thing now,
especially with the Disney movies,
because I have Disney+. I just
like Marvel, "Moana" all that stuff.
Do you have a favorite part
of Disney World?
Magic Kingdom.
So, that's a lot of fun
if you plan on going to Disney,
a Disney World vacation,
as Tyler often does.
- I will be going in October.
- There you go.
The new show features some
of Disney and Pixar's greatest hits,
including "Cinderella", "The Lion King",
"Toy Story," and "Wall-E".
I'm sorry. Wall-E.
Let's just keep it moving. I get it.
Starstruck.
I am starstruck.
You really are a Disney adult.
I would love to get married
in the Magic Kingdom one day.
I know it will never happen,
'cause it's too expensive,
but that's just me. Nothing?
Oh, boy.
Moving on. Our main story
tonight concerns crime.
Once again, voted number one
by "Reasons to Tiptoe" magazine.
Specifically, we're going to talk
about corporate crime,
something our current president is,
famously, not that concerned about.
Not only was he convicted on 34
counts of falsifying business records,
but long before he was president,
CNBC ran a segment about
a law banning American companies
from bribing foreign governments,
I'll let this anti-corruption activist
pick up the story up from there.
I was asked to come on CNBC and
give the anti-corruption argument.
And I remember laughing
at the time, saying,
"Is there somebody that you found"
"who's willing to give
the pro-corruption argument?"
Now, every other country
goes into these places,
and they do what they have to do.
Sad part, every other country
in the world is doing it.
We're not allowed to. So, it
puts us at a huge disadvantage.
Yeah, they clearly
got the right guy there.
I can only assume the producer
at CNBC said to their assistant,
"We need someone willing to give
the procorruption argument."
"Who's the most unethical person
you can think of?"
To which they replied,
"Easy, the Hamburglar."
To which the producer said, "No. Wait,
what? No. Like, a real person."
To which they said, "Wait,
the Hamburglar's not real?!"
To which the producer said,
"No. He's a fictional character."
To which the assistant replied,
"Well, there goes that dream."
To which the producer said,
"What dream?"
To which they said,
"Of marrying the Hamburglar!"
To which the producer said,
"I'm sorry, what?!"
To which the assistant said,
"Let's not talk about it.
How about we get Donald Trump?"
To which the producer said, "That
is a good idea! Are you crying?"
To which the assistant said,
"Yeah, sorry, this Hamburglar news
is just hitting me pretty hard."
To which the producer said,
"Did you really have
a crush on a cartoon beef thief?"
To which they replied,
"The heart wants what it wants!"
before storming off
to go cry in a bathroom stall.
Anyway. The point is,
of course they got Donald Trump
to defend corruption on live TV.
And since taking office,
his administration's halted or dropped
more than 100 enforcement actions
against corporate misconduct,
and he even issued the first-ever
pardon of a corporation,
pardoning
this cryptocurrency exchange,
which had been "sentenced
to a 100 million dollars fine"
"for violating an anti-money
laundering law."
It's frankly no wonder experts
have called this moment
"the ripest environment for corruption
by public officials"
"and business executives
in a generation."
Though, to be fair,
it's not like the environment was
un-ripe before Trump took office.
Republican and Democratic
administrations have both taken
a pretty lax approach
to corporate crime for a while now.
You might've noticed,
stories about corporate malfeasance
rarely end in executives going to jail
or the companies getting shut down.
And tonight's story is going to focus
on a key reason for that:
deferred prosecution agreements,
or DPAs.
They're an out of court settlement for
companies to avoid being prosecuted.
Essentially, the government
will come to a company and say,
"Hi company, government here.
You did a crime,"
"and we have enough evidence
to prosecute you."
But instead of then doing that,
they strike a deal
where if the company behaves itself
for a certain amount of time,
the criminal charges
eventually disappear.
Sometimes,
they'll go with an even weaker option,
a non-prosecution agreement,
or NPA,
which doesn't even
have to be filed in court.
But either way, they're terms
that tend to slide past you
whenever you hear them
on the news.
The Justice Department announcing
a deferred prosecution agreement
with Teva Pharmaceuticals.
FirstEnergy entered into what's called
a deferred prosecution agreement.
McKinsey has also entered into
a deferred prosecution agreement.
Uber has entered into
a non-prosecution agreement.
Credit Suisse close to finalizing
that deferred prosecution agreement.
What's known as a deferred
prosecution agreement.
A deferred prosecution agreement.
Every bank on Wall Street has
a deferred prosecution or an NPA.
Every bank has more than one,
most likely.
It's true. AIG has two NPAs
and a DPA,
Barclays has a DPA and an NPA,
Credit Suisse has a DPA,
J.P.Morgan has an NPA and a DPA,
Lloyds has two DPAs,
the Royal Bank of Scotland has a DPA,
Wachovia has a DPA and an NPA,
and UBS
has a DPA and two NPAs.
And just so you know,
when I say a sentence like,
"UBS has a DPA and two NPAs",
I do hear myself.
I'm fully aware that one day this
show will just be me reading
one long acronym for 40 minutes,
we'll have achieved our perfect form,
and on that day, I'll finally
be allowed to die.
But the point is, these agreements
are absolutely everywhere.
Honestly, the only things more
ubiquitous than DPAs on Wall Street
are fleece vests
and undiagnosed sociopaths.
Unfortunately, as you're about to see,
DPAs don't really do much.
In fact, sometimes, companies
that have done massive harm,
have used them to literally
get away with murder.
So given that, tonight, let's talk
about deferred prosecution agreements:
where they came from,
how ineffective they can be,
and a few amazing examples
of what they can look like in practice.
And let's start with the fact
that DPAs were never actually
intended to be used on corporations,
the concept grew out of a 1974 law
that was meant to help
firsttime and juvenile non-violent
offenders avoid prosecution
so they
could focus on rehabilitation.
But that is not
how we use them today.
And you can trace the explosion
of corporate DPAs
back to one of the most famous times
a large company was prosecuted
in this country: Arthur Andersen.
It was the accounting firm for Enron,
whose name is now synonymous
with accounting fraud.
Very basically,
with the help of Andersen,
Enron completely invented future
earnings for itself.
And when the government
tried to investigate,
Andersen undertook
a massive document purge
during which they deleted around
30,000 computer files and emails
and, at one point, shredded
more documents in three days
than they usually destroyed in a year,
something that became so famous,
it was even parodied
in a Heineken commercial,
where the documents became
snowflakes and the tag line was,
"To all those who weren't naughty
this year, happy holidays."
And just think how remarkable that is:
a beer company thought to themselves,
"We could just show off our crisp,
refreshing product in this commercial."
"But instead, let's give people
what they really want this Christmas"
"and say 'fuck you'
to an accounting firm."
The Justice Department got a lot of
blowback for prosecuting Andersen.
Because, at the time, it was a massive
firm with 28,000 employees,
many of whom felt
like they'd done nothing wrong.
I am Andersen!
After weeks of suffering in silence,
Andersen workers found their voice.
Fight! Stand tall!
Don't give up!
By the grace of God, we're gonna win
'cause we're Andersen, yeah!
Everybody you see out here is
worried about their job right now.
We're all being penalized
for something that we didn't
have anything to do with.
Yeah, Arthur Andersen's employees
felt a range of emotions
from resentment to anxiety to a level
of unbridled exuberance
best described as "'Price Is Right'
contestant who just won a Honda Civic."
And they were right
to be concerned.
Andersen being convicted of a felony
meant they lost the accounting license,
which, for an accounting firm,
is generally not great for business.
The company eventually folded,
thousands of people lost their jobs,
and many,
like this Andersen partner,
placed the blame
squarely on the government.
In the history of the world
of business, this will come out,
in my judgment, as the largest act
of corporate murder ever.
Okay, that is a wild overstatement,
because what happened to Andersen
is a lot more complicated than that.
The company had started shedding
clients long before their conviction,
and the SEC was already
investigating them.
So, the truth is, Andersen was likely
heading out of business anyway.
Saying this prosecution is what
doomed Andersen
is like saying that the ground
is what doomed the Hindenburg.
Sure, it might've been the final
issue it encountered,
but things weren't exactly smooth
sailing before then.
But after Andersen, prosecutors
became very reluctant
to risk putting
a company out of business.
And that is when
DPAs became popular.
In the decade
prior to Andersen's collapse,
DPAs and NPAs had been used
just 18 times.
But in the 14 years following,
DOJ entered into 419 such settlements.
And the argument for DPAs
is that they prevent innocent employees
from getting hurt,
dissuade future wrongdoing,
and still allow the DOJ
to go after individuals.
But there are problems
with literally all that.
For starters, nearly half
of those getting deferred
and non-prosecution agreements
paid no fine at all.
And when it comes to individuals,
in two-thirds of cases,
no employees were prosecuted.
To show you just how glaringly apparent
this system's shortcomings can be,
we're going to focus on three
companies: GM, HSBC, and Boeing.
We actually talked about GM
all the way back in our first season.
But just in case I wasted my precious
let's call it "youth"
shouting at you about things
you don't remember,
here is a quick refresher
on what the company did wrong.
Last year, GM began recalling
two and a half million cars
with ignition switches that could
suddenly shut off the engine,
cutting off the power to the airbags
and disabling the power steering
and power brakes,
causing crashes.
GM has since determined
that the switches caused accidents
that led to 124 deaths
and 273 injuries.
Yeah, it was a wild story.
GM sold cars with faulty switches
that could shut off the engine,
steering, brakes and airbags,
despite the fact that they are,
and this is true,
some of the key differences between
something being an automobile,
or a metal coffin
moving at 70 miles an hour.
And there was evidence
the company knew about the problem.
In 2008, they showed their employees
a PowerPoint encouraging them
to avoid words like "problem",
"safety" and "defect"
when writing about GM's cars.
And added, as a fun joke, that
they should also probably stay away
from terms like "Kevorkianesque",
"tomblike", "maniacal"
or "rolling sarcophagus."
And I kind of hope that
that just inspired GM employees
to use other options instead like
"The Widowmaker",
"Chitty Chitty Smash Bang",
"Final Destination: The Car"
and "The Lean Mean
James Dean Machine."
GM reached a DPA
with the government in 2015,
which meant
they didn't have to plead guilty,
just agree to a "statement of facts"
about their misconduct.
For instance, they admitted
that by early 2012,
they not only knew about the problem,
they were aware of several incidents
that may have been caused
by the defective switch.
And while the law required GM
to report such knowledge
to the government within five days,
it took them approximately 20 months,
which, fun fact, is around the length
of an elephant's gestational period.
And if writing an email takes longer
than making an elephant from scratch,
there is clearly something else
going on.
Now, as part of GM's DPA, they did
have to pay a 900 million fine,
and Mary Barra, their then,
and current, CEO,
went to great lengths to argue that
the deal was not letting them off easy.
This is a tough agreement.
It further highlights the mistakes
made by certain people in GM,
and it imposes significant
penalties and obligations.
Okay, but I don't know how
"significant" a 900 million fine was
to a company whose profits were
just under 10 billion that year.
I'm not saying it's nothing,
but 9% of one year's profits
just doesn't seem enough
for essentially marketing
the automotive equivalent
of the Titan submersible.
Also, while she said mistakes were
made by "certain people at GM",
notably, no individuals ended up
facing charges for any part of this.
And that's something extra galling
for people like Candice Anderson.
She lost control of her car
in a crash that killed her boyfriend
and when GM conducted an internal
review of the accident in 2007,
they ruled
that their car was to blame.
Unfortunately,
they never told anyone that,
instead allowing Candice to plead
guilty to negligent homicide
five months later.
Thankfully, her conviction
has since been overturned,
but the way that she sees it,
that's not nearly enough.
There's someone within General
Motors that should be held responsible.
Are you saying that you think
individuals at General Motors
should stand trial?
Yeah, I do.
They didn't have a problem
sitting by while I was charged.
Yeah, I get that. If someone
does something terrible to you,
it is understandable to want them
to get a taste of their own medicine
it's one of the many reasons
why I'd personally love to see
someone shit on a pigeon.
Yeah, not so much fun when
we do it to you, is it, pigeons?
And look, thankfully,
GM hasn't killed any more people
with its cars since then,
as of taping.
But other companies with DPAs
have shown a much greater
propensity for recidivism.
And that brings us
to our second example, HSBC.
A few years back, it got in trouble
for allowing Mexican cartels
to launder at least 881 million
in drug trafficking proceeds
and facilitating approximately
660 million in transactions
involving sanctioned regimes
like Burma, Iran, Cuba and Libya.
Here is how bad it was.
At one point, Mexican law enforcement
recorded a cartel leader on a wiretap
saying HSBC was
"the place to launder money"
and the Sinaloa cartel deposited
so much money in their bank
that "the cartel designed special cash
boxes to fit HSBC's teller windows."
Which is surprisingly
considerate in a way, after all,
who hasn't been stuck in a teller line
behind some guy trying to stuff
a blood-soaked duffel full of cash
through the window?
Finally, a cartel that thinks
about other people's time!
Now, in response, HSBC put
together a new compliance department,
but it wasn't exactly inspiring,
as this man will tell you.
His name is Everett Stern
and he once had a dream.
Tell everyone
about your dream, Everett.
Sure, I mean, my dream
was to join the CIA.
Okay, thanks, Everett. That sounds
like a really nice dream.
Unfortunately, Everett got rejected
by the CIA,
but he did get hired
as a compliance officer at HSBC.
Which he was excited about
until he got there.
I remember, like, my first day on
the job. It was a shopping center.
It wasn't like a bank building.
I was expecting to show up
at this bank building,
and I'm in this suit.
And there were all these people,
like, in jeans and T-shirts
and I didn't understand what
was going on, and when I walked in,
there are all these empty cubicles
and the walls were half painted,
and there are maybe 15 compliance
officers in the whole department.
At the time, I thought they hired me
'cause I was like this smart guy
and I had it all going
and everything.
No, they hired me 'cause I was an idiot
and I didn't know what I was doing.
Yeah!
As far as Everett could see,
HSBC was intentionally
looking to hire idiots.
And the only time that that is
an acceptable hiring strategy
is if you're casting
a baby food commercial.
We need to hire, you know,
one of those tiny idiots
who doesn't know what they're
doing. A baby! Sorry, a baby.
That's the word.
We need to hire a baby.
And while HSBC was going through
the motions of compliance publicly,
internally, they were going to egregious
lengths to avoid it altogether.
For example, the Treasury keeps
a list of sanctioned organizations
that banks aren't allowed
to do business with.
On that list is a company called TAJCO,
which has had ties to Hezbollah.
HSBC's system should've automatically
flagged transactions involving TAJCO
and yet even a self-described idiot
who didn't know what he was doing
could see that the bank was processing
thousands of dollars for them.
And I'll let him describe how he
discovered it, and what he did next.
I noticed they were putting
little dots and dashes in the actual
names in the wire filter.
So, for instance, if you had
TAJCO that was sending money
from Hezbollah
to some other organization,
instead of T-A-J-C-O,
that's the normal name for it,
in the HSBC wire filter, it would be
T-A-J-dot-C-O or T-A-J-dash-C-O.
And that's how they criminally
manipulated the wire filter
to allow money laundering
for terrorists and drug cartels.
This is why, three weeks in, I started
passing information to the CIA.
Fuck yeah, you did, Everett!
Fuck yeah, you did!
That is great news for him
and frankly terrible news
for whoever thought it was a good
idea to hire an aspiring CIA officer
to oversee your extremely lazy attempts
to launder money for criminals.
And once the government started
poking around within HSBC,
they quickly found
some pretty compelling evidence.
Internal documents show HSBC
executives knew what they were doing.
"We are allowing organized criminals
to launder their money",
wrote one executive.
It is hard to imagine how the evidence
could get more damning than that.
Unless, maybe, the email
signature included the phrase,
"Sent from my crime phone",
followed by the "shh!" emoji.
And yet, incredibly, the government
brought no charges against individuals.
The bank itself just got a DPA.
And the terms of it
seems more than a little weak.
For example, it agreed to pay
a fine of almost 2 billion dollars,
which might sound like a lot,
until you remember they made
over 13 billion in profits
that year alone.
Maybe the DOJ really thought that
a hefty but entirely manageable fine
would make HSBC change their ways.
The bank did agree to monitoring,
and apparently even issued
their U.S.-based staff certificates
with little parrots on them,
reading "I am a Changed Bird."
But were they?
Because even that monitoring program
illustrates something immensely
frustrating here.
Because DPAs
aren't criminal proceedings,
monitoring reports on whether
or not companies are complying
aren't required to be public record.
So, we don't really know what
HSBC did to clean up its act.
But the glimpses we got during
that period aren't great,
as in the bank's own annual report,
they openly admitted that their monitor
expressed significant concerns
about the pace of their progress
and instances
of potential financial crime.
But despite that, their DPA expired
as planned at the end of 2017.
And the government dropped
all charges against them.
So, they were in the clear,
until the very next month,
when this happened.
HSBC is said to have agreed
to pay 100 million dollars to resolve
a U.S. Justice Department investigation
into the rigging of currency rates.
A source tells the deal includes
a deferred prosecution agreement
and a promise to help with the criminal
case against former traders.
Yeah, they were caught again
and they got another DPA!
That is ridiculous. At this point,
it's not even
a deferred prosecution agreement,
it's more like prosecutorial edging.
I've said it before and I'll say it
again: let the government cum.
And that is the thing here,
DPAs and their associated fines
have now become a routine cost
of doing business.
Which is a real problem, because
the stakes can be incredibly high.
Which brings us to our final company,
Boeing.
Last year, we did a whole segment
about its fall from grace
and discussed
their infamous 737 MAX planes,
which have been involved in two
crashes that killed 346 people.
I won't recap the whole thing,
but suffice to say,
there were flaws
with the aircraft's design,
and they weren't exactly
a secret within the company.
The 737 MAX became Boeing's
bestselling jet ever, but in 2017,
just as the planes were taking
to the skies worldwide,
a Boeing employee sent
this message to a colleague,
"This airplane is designed by clowns,
who in turn are supervised by monkeys."
Other employees calling the design
"piss poor" and comparing the fixes
to patching a "leaky boat".
In October 2018,
Lion Air flight 610, a 737 MAX,
crashed,
killing 189 people on board.
In May of that year, as Boeing
was pursuing FAA approval
for the MAX flight simulator,
one test pilot wrote,
"I'll be shocked if
the FAA approves this turd."
Yeah, it seems like the only real
disagreement within Boeing
was on
what hilarious language to use
when describing
their catastrophic products.
"Okay, so we got piss poor,
leaky boat, turd, you know what?"
"Can someone get GM on the phone"
"and see if we can borrow
'Kevorkianesque' from them?"
"I kind of like the sound of that."
Following those crashes,
Boeing entered into a DPA in 2021,
admitting to misrepresentations
to regulators
about a key software feature
tied to the crashes.
It also agreed to pay a fine
and show three years of good behavior
in exchange
for avoiding prosecution.
It's an agreement
that many felt was toothless,
especially given one judge involved
in the case later called
what Boeing had done "the deadliest
corporate crime in U.S. history."
And following that DPA,
things didn't seem
to improve much at Boeing.
Because by the start of 2024,
just two days before their three-year
probationary period was set to end,
this happened.
What was supposed to be a short trip
from Portland to Ontario, California
for Garrett Cunningham
turned out to be
one of the most frightening
experiences of his life.
A gush of air, I look to my left,
and part of the plane is gone.
Yeah, not ideal!
It is never good when you feel
a sudden gush of air on a flight.
Even if the plane
hasn't just cracked open,
odds are it's gonna be the toddler
in the seat behind you
breathing directly on your face,
or your seatmate cracking
the lid on a tub of tuna salad
they brought with them.
There is no surprise whoosh of air that
brings good tidings in a metal sky can.
But in this case, yeah, a door plug
blew off a 737 MAX mid-flight,
an incident that was a clear
indication, according to the DOJ,
Boeing had violated its initial DPA.
But instead of then prosecuting them,
the DOJ offered them a plea deal,
which just required them
to pay another fine,
boost their spending on safety
and compliance programs,
and report to an independent monitor
overseeing their compliance.
And this, understandably,
angered some of the family
members of crash victims.
Here is the mother of one
of them, summing it all up.
It seems that, beginning of January,
just two days
before the expiration of the DPA,
"Oops! I Did it Again."
This is Boeing's song,
"Oops! I Did it Again."
Yeah, that woman's outrage
is completely justified.
It's honestly smart to cite the musical
canon of Britney Spears,
given that Boeing essentially
just plead not that innocent.
But it gets worse,
because this year,
the Trump administration downgraded
Boeing's punishment
to a non-prosecution agreement,
removing even the hypothetical chance
of prosecuting them
over this in the future.
Which is just completely
infuriating, unless, I guess,
you're this guy on CNBC, who chose
to announce the news like this.
The DOJ says it expects to file
the written agreement with Boeing
by the end of the week.
Should be viewed as good news.
I wouldn't be surprised
to see the stock move higher.
Yeah, great news, everyone!
The stock should move higher,
so I guess that's at least one thing
Boeing can keep in the fucking air.
But even if that is good news
for stockholders,
it's clearly not great
for anyone else.
Because while it means
that Boeing does have to pay out
an additional 444 million
into a crash victim's fund,
they also avoid being branded
a convicted felon
and will no longer face oversight
by an independent monitor,
but instead will hire
a "compliance consultant".
As one consumer rights
advocate puts it,
"This deal isn't a slap on the wrist,
it's barely a feather on the wrist."
Look, clearly, when it comes
to corporate accountability,
we have a problem here.
Because a company engages
in flagrant misbehavior,
even putting evidence of it in writing,
people get hurt,
they're caught red-handed,
the government fines them and says,
"You better not do that again"
then they do,
and the whole cycle restarts.
This is not sustainable.
And unfortunately,
I wouldn't expect any of that to change
for at least, say,
three-and-a-half years.
But it is worth asking,
for a hypothetical future
when we have a government that
isn't run by a pro-corruption felon,
what could we be doing better
to hold corporations accountable?
Well, we could make DPAs more
of a deterrent by making the fines
much more serious and prosecuting
executives a lot more often.
We could also bring both DPAs and
NPAs into the official legal system,
so that their monitoring
would be more transparent
and companies would build up records
of misconduct
instead of constantly
getting to wipe their slate clean.
But the hard truth here is,
if we want more accountability,
the government is going
to have to show more willingness
to prosecute repeat offenders,
even if it affects a large company's
ability to do business.
Which really doesn't seem
too much to ask.
Because you've seen tonight just how
much damage companies can do
when they operate unchecked.
And right now, we have a system
where essentially corporations can,
with very limited resistance,
sell cars with a surprise off button,
operate as a haven for blood money,
and build planes that unbuild
themselves in the sky.
I'd argue that to not make significant
changes to a system like that
would be, if I may quote GM's most
cursed PowerPoint of all time,
"fucking maniacal."
And now, this.
And Now: GB News Attempts
to Understand Gen Z.
Generation Zed,
let's have a pop at them.
They don't wash up, I think.
22% leave dirty dishes in the kitchen
sink for 3 nights before washing up.
Research commissioned
by Halfords shows
that a quarter of Generation Zed adults
would not change a light bulb
because they believe
stepladders are too dangerous.
Apparently, Gen Zed don't like to dance,
they find it really embarrassing.
Because they're a generation
of smartphones, aren't they?
So, they all film each other.
This lot really do seem quite dull.
What do they do
if they don't have a drink and they
don't socialize, what do they do?
They are online. They're
online and doing a lot of moaning.
They can't order off menus,
did you know that?
That was a story that came out.
They can't tie their shoelaces.
We also find out that Gen Zeds,
in general,
they don't do
a 9:00 to 5:00 pattern.
They don't drink alcohol
and they don't have sex.
The younger generation
don't appear to be going out
and getting blasted as much as we
used to, which seems to be a shame.
I don't like this sober Gen Zed.
I think it's good if they're having
a few drinks.
It's one thing to stop drinking.
It's another thing to never start.
Maybe they're fed up watching
their parents get drunk, too.
And I think that was a lot of it.
They looked at the lifestyle
and the attitudes.
And the sort of bordering
on alcoholism of their parents
and said, no, actually
that's not the life for us.
How do we go from that to a boy
who's lost his monkey, Nigel?
That's our show, thanks for watching.
We'll see you next week, good night!