HSBC Money Laundering: Labour Demands Trade Minister Face Lords

The trade minister Lord Green is under mounting pressure after Labour demanded that he appear before the House of Lords to answer questions about the money-laundering scandal at HSBC, the bank he ran before becoming a government minister.

Ed Miliband said the leader of the opposition in the Lords would be asking Green to come before the House ahead of the start of the recess next week to explain what he knew about the situation and when he knew it.

"Lord Green certainly has some big questions to answer," the Labour leader said. "Now if this was a House of Commons minister and the House of Commons was sitting there is no question in my mind that the minister would feel it was right to come to the House of Commons.

"The House of Lords is sitting for another week. Lady Royall, Labour's leader in the Lords, will be writing to [the leader of the Lords] Lord Strathclyde to say that Green must come to the House of Lords to answer questions about his role and his involvement in the HSBC issue and frankly must answer the questions of what he knew and when he knew it.

"I hope that the prime minister will encourage him to do that because that would be the right thing for him to do as a minister in the government."

In her letter to the leader of the Lords, Royall urged Strathclyde to call Green to speak next week. "We believe that in line with the provisions of the ministerial code, and in relation to the impact of the disclosures concerning HSBC on his role as minister of trade, Lord Green should come to parliament to make a statement to the House of Lords before the house rises next week. We would urge you, as the principal government minister in the House of Lords, to make arrangements for such a statement to be given."

She also criticised Green's attendance record. "While trade ministers inevitably have to travel a great deal, so limiting their ability to be in parliament, records show that having entered the house in November 2010, Lord Green has spoken in the house a total of just five times – a debate, answering two oral questions, given one statement and spoken during one QSD," she wrote. "Previous trade ministers have managed to combine their national and international ministerial duties with their parliamentary responsibilities to a much greater degree."

The Labour peer Lord Hollick tweeted that Green "must come to the house to explain why he did not heed warnings of money laundering at his bank".

The House of Lords goes into recess on 28 July, but the chamber sits for the last time on 25 July.

Green has refused to comment since the revelations about HSBC laundering money for drug cartels, terrorists and pariah states were revealed this week during Senate hearings in the US. Green was chief executive of HSBC, Britain's biggest bank, between 2003 and 2006 and was its chairman until 2010, when he resigned to take up a position of trade minister in the coalition government.

His tenure covered the period of the damning Senate report which concluded the bank had a "pervasively polluted" culture which allowed HSBC subsidiaries to move billions of dollars around the financial system from countries such as Iran and Syria. Cash was also moved for Mexican drug cartels.

The bank is braced for a fine of $1bn or more.

Emails released as part of a US Senate investigation this week show that the former head of the bank was warned about compliance failings and potential criminal activity in money laundering for Mexican drug gangs but failed to grapple with the problem.

Green was copied in on a number of emails, including one where he was warned by the head of compliance, David Bagley – who dramatically resigned during Tuesday's appearance before senators – about breaches of rules in Burma. While changes were made to internal procedures, the rules continued to be breached.

Green is already under pressure over the Libor scandal as he was chairman of the British Bankers' Association, which publishes the benchmark rates, during the period of the problems exposed by the Barclays fine.

This article was written by Rajeev Syal and Jill Treanor, for guardian.co.uk on Thursday 19th July 2012 13.46 Europe/London