WASHINGTON — Senator Elizabeth Warren of Massachusetts continued pressuring banking regulators Thursday, criticizing them during a Senate hearing for failing to enforce tougher penalties on the nation’s largest banks.
Warren joined other members of the Senate Banking Committee in grilling regulators on corporate wrongdoing, focusing on the punishment faced by British bank HSBC after it was caught laundering Mexican drug money.
Federal regulators fined the company nearly $2 billion in December. But Warren chided them for neither forcing the bank to shut down its US operations nor prosecuting individual employees.
“If you’re caught with an ounce of cocaine, the chances are good you go to jail,” Warren said. “But evidently, if you launder nearly a $1 billion for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night. . . . I think that’s fundamentally wrong.”
Representatives from the Treasury Department, Federal Reserve, and Office of the Comptroller were unclear as to if and when they would stiffen penalties for such malfeasance. They agreed, however, that regulators must follow the Justice Department’s lead when it comes to prosecutions.
The response puts the Obama administration in a tight spot regarding financial regulation, as it came a day after Attorney General Eric Holder told the Senate Judiciary Committee that the nation’s banks had become too big to jail.
“The size of some of these institutions becomes so large that it does become difficult for us to prosecute them,” Holder said at a hearing Wednesday. “If we do prosecute — if we do bring a criminal charges — it will have a negative impact on the national economy, perhaps even the world economy.”
— DAVID UBERTI
Group backing Obama says it won’t take corporate money
WASHINGTON — Reversing course after accusations that it was selling access to the White House, a nonprofit group run by former advisers to President Obama said Thursday it would not accept corporate donations and would disclose the specific amount of money it receives from donors.
Jim Messina, the chairman of Organizing for Action, wrote in an op-ed article published Thursday by CNN.com that the group believes in being ‘‘open and transparent’’ and had decided not to accept corporate money, a move in keeping with Obama’s past campaign practices. Every donor who gives $250 or more will be disclosed on the group’s website with the exact amount on a quarterly basis, he said.
The close ties between the White House and Organizing for Action, a nonprofit that was formed from Obama’s 2012 campaign, have drawn questions about whether bundlers who raise $500,000 or more for Organizing for Action will get quarterly meetings with Obama. The group and the White House have disputed those charges.
Open-government groups have said Obama has changed course since being critical of the role of money in politics during his first campaign and the start of his presidency, and they say the nonprofit provides new ways for corporations and individuals to influence the administration.
Messina wrote in the op-ed piece that although Organizing for Action ‘‘is a nonprofit social welfare organization that faces a lower disclosure threshold than a political campaign, we believe in being open and transparent.’’
— ASSOCIATED PRESS
Obama continues his dining diplomacy with GOP leadersWASHINGTON — Punctuated with the sounds of ringing phones and clinking china, President Obama’s new legislative diplomacy has Republicans wondering what took so long.
Obama pressed ahead Thursday with his bipartisan political outreach, eliciting a cautious welcome in a capital that has been riven by gridlock and partisanship over how to lower deficits and stabilize the nation’s debt.
Obama had the Republican House Budget Committee chairman, Paul Ryan, and the committee’s top Democrat, Chris Van Hollen, to lunch at the White House, a day after he dined with a dozen Republican senators in what the White House said was an effort to find common ground with rank-and-file lawmakers.
Few were willing to guarantee that the engagement would yield results. Previous presidents have tried to develop relationships with members of Congress with varying degrees of success, though some of the biggest pieces of legislation, such as the 1964 Civil Rights Act and a Social Security deal in 1983 required cross-party efforts by Presidents Lyndon Johnson and Ronald Reagan.
‘‘We’re not naive about the challenges that we still face; they exist,’’ White House spokesman Jay Carney said. ‘‘And there are differences.’’
— ASSOCIATED PRESS