* HSBC sets up committee to combat financial crime, risks
* Ex-U.S. attorney general Comey to join new committee
* Move follows record fine linked to Mexico problems
By Steve Slater
LONDON, Jan 30 (Reuters) - HSBC is hiring a former U.S. deputy attorney general with a background in fighting drug cartels to help the global bank avoid a repeat of lapses in its anti-money-laundering controls that led to a $1.9 billion fine.
The penalty, the largest ever paid by a bank, followed a long U.S. investigation into HSBC's Mexican and U.S. operations that concluded last month with scathing criticism of the systems it used to stop the proceeds of organised crime passing through its accounts.
Jim Comey, who was U.S. deputy attorney general from 2003 to 2005, will join Europe's biggest bank as a non-executive director in March and will be a member of a new committee to combat financial crime.
As U.S. attorney for the southern district of New York from 2002 to 2003, Comey set up a specialised unit to prosecute international drug cartels and supervised the prosecution of executives on fraud and securities-related charges.
He will be joined by two other non-executives - Rona Fairhead and Simon Robertson - and five independent advisers, including Bill Hughes, a former head of the UK's Serious Organised Crime Agency, and Dave Hartnett, who retired last year as the permanent secretary for tax at Britain's tax authority.
HSBC said on Wednesday the Financial System Vulnerabilities Committee would help Chief Executive Stuart Gulliver simplify its business activities and enhance risk management and control by improving standards across the bank.
It will help HSBC meet tax transparency and compliance standards, the prevention of terrorist financing and association with illegal drugs activities.
HSBC said the committee would identify areas where the bank could be exposed to financial crime or system abuse, or where its bankers might "abuse their participation in the system by undertaking transactions or activities that are reputationally damaging to HSBC, even if not actually illegal".
Comey is the latest big American name hired by the bank to improve its controls and structure.
Stuart Levey, a former undersecretary for terrorism and financial intelligence in the U.S. Treasury, joined last year as chief legal officer. Bob Werner, who had headed sanctions action against drugs traffickers and money launderers, became head of financial crime compliance, a new role.