My object all-sublime,

I shall achieve in time-

To let the punishment fit the crime.

— Gilbert and Sullivan, The Mikado

It was just an unfortunate coincidence that the reports were almost juxtaposed-the reports of the punishment given Stephanie George and that given HSBC and UBS. Stephanie, of course, was not the first.

William James Rummel has been imprisoned since the late 1970s and will be there for the rest of his life. That is because he was convicted of three crimes. He used a credit card to obtain $80 worth of goods and services, a crime for which he served 3 years in jail. When he got out he passed a forged check in the amount of $23.86 which bought him 4 years in jail. He ended his career as an air conditioning repairman, charging a customer $120.75 for a repair with which the customer was not satisfied. He refused to return the money and was convicted of obtaining money under false pretenses. Since that was his third conviction he was sentenced to life in prison. In reviewing his sentence the U.S. Supreme Court said his life sentence did not constitute cruel and unusual punishment. Commenting on the Court’s finding Justice Rehnquist said: “We all of course, would like to think that we are ‘moving down the road toward human decency. . . .’ Within the confines of this judicial proceeding, however, we have no way of knowing in which direction that road lies.” Some legal cartographers could probably have helped the Justice out.

On December 12, 2012 the New York Times described the plight of Stephanie George. Her boyfriend stashed a lockbox with a half-kilogram of cocaine in her attic and when the police found it she was charged with its possession even though she claimed not to have known of its presence in her house. The judge said he thought the sentence unreasonable but he was compelled by governing statutes to sentence Ms. George to life in prison. In contemplating their fates Ms. George and Mr. Rummel (and many others) may well wonder how things could have come out differently for them. The answer is, they should have been banks. Banks don’t go to jail even though they are persons and even when their offenses involve billions of dollars.

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On the same day that Ms. George’s plight was described, HSBC agreed to pay $1.92 billion for worse things than failing to properly repair an air conditioning unit or store a bit of coke. According to the Senate Subcommittee on Investigations in a report issued in July 2012, the bank “exposed the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering controls.” The banks’ conduct enabled Mexican drug cartels to launder tainted money through the American financial system, and the bank worked closely with Saudi Arabian banks linked to terrorists.

The bank is a person for purpose of making political contributions to assorted candidates but it is not a person for purposes of being charged with criminal wrongdoing or going to jail. A criminal indictment of either the bank person or a human person, we are told, might place the institution at risk of collapse. Critics can take comfort in knowing that the bank did not get off scot-free. In addition to paying $1.92 billion to settle the charges against it, it will enter into a deferred prosecution agreement that suggests if it or a human person doesn’t mend its ways criminal charges might yet be brought. Lanny Breuer, the head of the Justice Department’s criminal division said that: “HSBC is being held accountable for stunning failures of oversight-and worse-that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries.” Having described its actions he nonetheless defended the punishment saying it was a “just, very real and very powerful result.” He’s right. $1.92 billion is a lot of money and it means that instead of HSBC having a 2011 profit of $22 billion it will only have a profit of about $20 billion.

December 19 we learned that UBS had settled with U.S. and British regulators for having manipulated LIBOR rates. (LIBOR is the interest rate banks charge each other for inter-bank loans. Depending on what time period one is examining the bank was either reporting artificially high rates or artificially low rates in order to deceive regulators and/or make money.) According to the Wall Street Journal, its review of a federal report suggests Fannie Mae and Freddie Mac may have lost more than $3 billion as a result of the manipulation of LIBOR. UBS is not facing criminal charges since they might endanger its stability. Its Japanese branch “has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including Yen Libor.” The bank is not going to jail for the same reason HSBC is not going to jail. Federal Regulators said if criminal charges were brought the bank’s stability would be threatened.

Mr. Rummel and Ms. George greatly regret the fact that they were not banks. Their incarceration has greatly affected their stability.