Senate Report: HSBC allowed money laundering that benefited terrorists and drug cartels.

A “pervasively polluted” culture at HSBC allowed the bank to act as financier to clients moving shadowy funds from the world’s most dangerous and secretive corners, including Mexico, Iran, Saudi Arabia and Syria, according to a scathing U.S. Senate report issued on Monday.

The report [link to PDF here] which comes ahead of a Senate hearing on Tuesday, said large amounts of Mexican drug money was likely to have passed through the bank.

HSBC’s U.S. division provided money and banking services to some banks in Saudi Arabia and Bangladesh believed to have helped fund al-Qaida and other terrorist groups, according to an Al-Jazeera story on the report.

HSBC admits to having lax oversight and has apologized, and it’s likely that HSBC will end up paying fines to settle the claims that they transferred billions of dollars from Mexican operations to the US; amounts that could only be the result of drug operations.