Eric Hovde’s Senate Bid Faces Scrutiny Over Bank’s Deal with Controversial Mexican Financial Institution
Eric Hovde, a Republican Senate candidate in Wisconsin, has come under fire from Democrats over a business deal involving his bank, Sunwest Bank, and Mexico’s Banco Azteca. Concerns have been raised about Banco Azteca’s history of compliance issues and alleged ties to criminal organizations, putting Hovde’s business practices in the spotlight as the 2024 Senate race intensifies. According to a recent report by the Milwaukee Journal Sentinel, Hovde’s bank accepted millions of dollars from Banco Azteca as part of a currency conversion deal known as “repatriation” .
Banco Azteca, the tenth-largest bank in Mexico, has been linked to various controversies over the years, including allegations of ties to Mexican drug cartels. Although no charges have been brought against Hovde or Sunwest Bank, Democrats have seized on the issue, questioning whether it reveals a pattern of Hovde placing profit over ethical considerations. Arik Wolk, a spokesperson for the Democratic Party, expressed deep concern about the connection, saying that “Hovde is willing to do anything to enrich himself, even flying cash across the border for a bank suspected of working for criminal groups.” Despite these allegations, Wolk clarified that there is no evidence that Hovde or his bank have engaged in illegal activity.
Business Defense and Controversy
Hovde, who serves as Sunwest Bank’s chairman and CEO, has firmly defended his bank’s transactions with Banco Azteca, emphasizing that the deal was legal and compliant with anti-money laundering regulations. Hovde explained that the funds involved were generated by tourism in Mexico and were subject to strict documentation requirements to prevent any form of money laundering. “Sunwest has an incredibly strong compliance and anti-money laundering program which is vetted and takes this area very seriously,” Hovde stated in response to the allegations.
He also noted that the U.S. government has updated policies to ensure that financial institutions can engage in business with foreign banks while maintaining high compliance standards. Sunwest Bank is one of only a few U.S. financial institutions currently working with Banco Azteca, a bank that has struggled to maintain correspondent banking relationships with U.S. institutions due to past regulatory concerns.
A Decade of Compliance Issues for Banco Azteca
Banco Azteca has a history of being under regulatory scrutiny. In 2012, U.S. regulators began investigating its ties to organized crime, particularly drug cartels. Over the years, news outlets have reported allegations that Mexican gangs used banks like Banco Azteca to launder illicit money from drug sales and other criminal activities. In one instance, a 2023 Reuters report detailed how Mexican drug cartels allegedly used remittances to transfer funds, often using couriers on motorcycles to collect cash outside Banco Azteca branches .
Despite these reports, Banco Azteca continues to operate and has denied any involvement in illegal activities. The bank maintains that it adheres to strict international standards to combat money laundering and other illicit financial activities. Representatives from Banco Azteca have criticized the politicization of their business relationships, arguing that the institution goes above and beyond to ensure compliance with U.S. and international regulations.
Political Fallout and the Road Ahead
With Hovde seeking to unseat Democratic Senator Tammy Baldwin in the upcoming election, the deal between Sunwest Bank and Banco Azteca has become a key issue in the race. Democrats have framed the transaction as evidence of Hovde’s willingness to engage in business deals that raise ethical questions, while Hovde’s team insists the deal is lawful and above board. The controversy over Banco Azteca is unlikely to go away soon, with opponents using it to highlight broader questions about Hovde’s judgment as both a businessman and a Senate candidate.
Hovde has dismissed the criticisms as politically motivated, stating that “Remittances are a different business line than the wholesale banknote repatriation business conducted by Sunwest.” He reiterated that neither he nor his bank had been accused of wrongdoing.
As the election season progresses, the scrutiny of Hovde’s business dealings will likely continue, adding further complexity to an already high-stakes Senate race.
