Regulator Doesn't Rule Out Riggs Charges

[seemslikeadream]

Posted on Thu, Jun. 03, 2004

MARCY GORDON

Associated Press


WASHINGTON - A top banking regulator didn't rule out the possibility of criminal charges in the case of Riggs Bank as he accepted blame Thursday for failed oversight that allowed deficiencies in monitoring suspicious transactions to continue at the bank for seven years.

Comptroller of the Currency John Hawke repeatedly acknowledged in testimony to the Senate Banking Committee that his Treasury Department agency failed to act quickly or forcefully enough in the face of repeated lapses and allowed bank officials leeway for years because they appeared to be cooperative.

"It is clear to me that there was a failure of supervision," Hawke said. "We did not probe as soon or as deeply as we should have. ... We gave them too much latitude over too long a period of time."

The banking agency fined Riggs a record $25 million last month for alleged violations of laws to prevent money laundering in its handling of millions of dollars in foreign-held accounts.

Riggs, a midsize Washington bank with a near-exclusive franchise on business with the capital's diplomatic community, was accused of failing to report to the government suspicious transactions in accounts controlled by diplomats from Saudi Arabia and officials of Equatorial Guinea. The FBI and Treasury regulators have investigated the Saudi transactions - which included cash withdrawals of as much as $1 million - for possible connections to terrorism financing.

more
http://www.thestate.com/mld/thestate/business/8830468.htm

[seemslikeadream]

1. A little background from my friend DulceDecorum

Show me the money

Take Teodoro Nguema Obiang Mbasogo, a member of the same dictatorial ruling family that has ruled Equatorial Guinea since its independence from Spain in 1968. The dictatorship has been in power for about as long as Saddam held sway over Iraq. But Obiang is sitting on top of huge oil revenues and he is in tight with Bush's, Cheney's, and Condoleezza Rice's Exxon Mobil, Hess, and Marathon oil buddies in Houston and Dallas. Equatorial Guinea's oil revenues, estimated at $700 billion in 2003, keep Obiang in power. His son, Teodorino, spends a lot of time in Paris and Washington, where his dad just spent $3.5 million for two mansions courtesy of mortgages from Riggs Bank, where the African kleptocracy keeps much of its ill-gotten oil revenue.

It does not matter to the Bush regime that Obiang keeps his political prisoners in dark dungeons that would have made Saddam envious, or that Obiang executes opponents he finds particularly distasteful. Nor does it matter to Bush that Equatorial Guinea's children are dying from malaria, intestinal worms, and malnutrition because the Obiang dictatorship does not provide the country with adequate sanitation or medical care. The country's state radio recently pronounced that Obiang was God and that therefore he could kill anyone without accounting to anyone. It sounds a lot like Saddam. But in Obiang's case, he has the full support of Bush because Obiang is turning over his country's oil to the United States with himself getting enough money to buy Rolls Royces, Bentleys, Ferraris, Lamborghinis, and diamond-studded Rolex watches. Like Saddam with his son, Qusay, Obiang has designated his son, Teodorino, as his heir apparent.
http://www.newsinsider.org/madsta/saddam_is_captured_long_live_america...

In June, Tony Blair is to host a transparency conference in London aimed at tackling the corruption that surrounds the exploitation of natural resources in developing countries. Equatorial Guinea is the only oil-producing country to have refused to attend, notes the piece. Equatorial Guinea has become a major oil and gas producer in the past 10 years, yet the 500,000-strong population remains in poverty.

Details of the Riggs Bank account have emerged after the country's ambassador, Teodoro Biyogo Nsue, who is President Obiang's brother-in-law, unwisely mentioned that oil revenue was held at Riggs during a presentation late last year at the Center for Strategic and International Studies in Washington.

An investigation by the Los Angeles Times alleged that President Obiang is the account's sole signatory and more than $300 million of the country's energy earnings has been deposited in the account by oil companies active in Equatorial Guinea, including ExxonMobil and Amerada Hess. Alejandro Evuna Owono, a Guinean aide, denied to the LA Times that the government was secretive about oil revenue. "The IMF and the World Bank know national production figures, but we can use the money as we see fit," he said.
http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,date:05-12-2003~menuP...

Simon P. Kareri, Vice President and Senior International Banking Manager, was promoted to Senior Vice President and Senior International Banking Manager. Kareri joined Riggs in 1994 as Vice President and African Caribbean Embassy Manager.
http://www.riggsbank.com/Discover_Riggs/jan25_01.html

Malabo has been abuzz with rumours of a coup for the past few weeks and the authorities here are convinced that the US intelligence service, the CIA, was aware of the rumours. They say that this might explain why, as we exclusively reported in our last issue, the Washington-based Riggs Bank told Obiang to close his account with the bank when he visited it in late February. One of the bank’s senior vice-president and senior international banking manager, the Kenyan-born Simon Kareri, who handled the account — which had $300m — was subsequently fired. Curiously, all the African-Americans who were associated with Kareri at the bank were also dismissed. A number of people were quizzed by the FBI who wanted to know all manners of things about Equatorial Guinea and especially about the country’s First Family, which minister was related to Obiang and which companies he owns.

FBI officers had also raided Kareri’s home Washington. They asked his Senegalese wife a lot of questions on Equatorial Guinea which she could not answer. The FBI officers made it clear to her that they were not after her husband but were interested in any files on Equatorial Guinea that he may have left at home. They then took away all the computers that were in Kareri’s home. At the time Kareri was in Malabo. Curiously, when he returned to Washington after the failure of the coup attempt he contacted the FBI expressing his willingness to be interviewed by him but they declined, saying that they saw no need to interview him. No court charges have been brought against him and he is believed to be seeking legal counsel and may sue Riggs Bank.

Malabo authorities find it ‘awfully suspicious’ that for the past two weeks, the bank had refused to unfreeze Equatorial Guinea’s funds. Apparently, they had recently decided that if there were to be a coup in Malabo they would freeze Obiang and his government’s accounts. This was not done with the Haitian government account when Haitian President Jean Baptiste Aristide was ousted the first time. He was able to have access to his government’s funds with the same bank.
http://217.199.168.239/040.html

The unmasking of the coup plot may also embarrass Spanish Prime Minister Jose Maria Aznar, who has had several meetings with Moto recently, and was said by military sources to have been aware of the plot. Aznar is due to stand down ahead of national elections in the next few weeks.

The affair will also be a test case for South Africa's anti-mercenary legislation, given that much of the planning for the coup happened there and that most of the mercenaries were former South African soldiers.

President Obiang will doubtless try to use the failed coup to his advantage. His position has seemed to weaken in recent months, with the succession battle heating up and rifts developing within the country's tiny ruling clique. The latest blow to Obiang came late last month when he visited Washington D.C. in an attempt to resolve problems with his government's account at Riggs Bank. Obiang is the sole signatory on that account, which had a balance of more than US$600 million. The account has recently been investigated by the Federal Bureau of Investigation and an official at Riggs Bank has been interrogated by US agents.
http://africa-confidential.com/latestissue.asp

Tony Worthington:
At one time, America had little interest in Africa, but increasing amounts of oil are coming from it. We are in a new version of the great game in which the powers are struggling for resources. The Americans are trying to get out of reliance on Saudi Arabia and west Africa is the middle of an oil boom. I was astonished by the figures: 7 billion of an estimated 8 billion barrels of oil discovered last year were found off the west coast of Africa. West Africa now sends almost as much oil to the United States as Saudi Arabia. With that change comes military interest as well, but I do not have time to speak about that.

Nigeria is the worst case of a country discovering oil and experiencing misery. Following the discovery of huge oilfields, per capita income fell by 23 per cent. since 1975. I watched with interest when democracy took over in Nigeria, but I have seen no further signs of transparency. When we went to Nigeria, it was hard for politicians to find out what was going on. In Angola, more than $1 billion—about a third of state income—disappears each year and cannot be accounted for.

My favourite example of the relationship between the United States, its oil companies and African states is that of Equatorial Guinea. It is a tiny country of about 500,000 people—about a third the size of Northern Ireland—but it sits on oil. In Washington, almost within sight of the White House, there is a place called Dupont circle. There one will find Riggs bank, in which, it is alleged by the Los Angeles Times and corroborated by Global Witness, there is a bank account holding between $300 million and $500 million in the name of the President of Equatorial Guinea. That amount of money can only have come from Equatorial Guinea's oil resources, because oil represents 90 per cent. of its income. The dominant oil companies are Exxon and Chevron—American companies that reveal no information about their payments to that country. If they did, we would know about the route that the money followed. The President of Equatorial Guinea is

4 Nov 2003 : Column 758

therefore accused of huge money laundering in President Bush's neighbourhood bank, but there has been no sign of any attempt to find out whether that is the origin of the money.
The magazine, New Internationalist, ranks the world's regimes from one star to five star. Five star is "excellent"; one star is "appalling". It gives Equatorial Guinea one star, saying that all power rests in the presidency and that the president has no political vision beyond self-enrichment, self-aggrandisement and ruthless repression. No one in this place would achieve that record. We used to treat Equatorial Guinea as a pariah state. It is said that around one third of its people have fled. When it had elections last year, the leaders of the three opposition parties were locked up in jail and President Obiang got 99 per cent. of the vote. That gives us a clue that something is wrong. Even the US Department of Energy reports strong evidence of Government misappropriation of the oil funds that represent 90 per cent. of the country's income.
http://www.parliament.the-stationery-office.co.uk/pa/cm200203/cmhansrd...

And now, equal time with Mbob Mbodelango.

Madrid.- Feb. 26, 2004 .- The F.B.I. is investigating Teodoro Nsue Biyogo, former Ambassador of Equatorial Guinea in Washington and brother-in-law of President Obiang Nguema Mbasogo.
http://www.guinea-ecuatorial.org/modules.php?name=News&file=print&sid=...

There are daily flights between Dallas in Texas and Malabo. This is possibly the highest frequency of direct airline flights between the United States and Africa. These are commuter flights that bring drilling workers from Dallas.

The oil companies pay a hefty fee to Mbassogo for drilling oil. This is paid into Mbassogo’s personal bank account in the Riggs Bank in Washington, DC owned by Mbassogo. The citizens of Equatorial Guinea have no idea how much money is deposited in that bank account.

Ultimately the wealth is shared between the Mbassogo family and his cronies and the oil companies. The rest of the citizens of Equatorial Guinea are living in abject poverty.

Why is the Mugabe regime trying to show off? They have invited reporters into the seized jet. The Home Affairs Minister has made several press statements on the matter.

In fact, the entire ZANUPF machinery has climbed onto the bandwagon on blitzing the world with information about this case. Mugabe’s foreign minister Mudenge said the mercenaries should face even the capital punishment. As it turned out, the mercenaries are to be tried for lesser crimes.

The lawyer for the mercenaries has already been allowed to go and see the so-called mercenaries. The lawyer later said the men were being well cared for. He said their only complaint is they are being given TOO MUCH FOOD.
http://actzim.com/lfamar15.html

Thank you very much for your input, Mr. Mbodelango.
I am sure we will have occasion to call on you again.

Jonathan J. Bush (Jonathan James Bush) (1931- ) is an uncle to President George Walker Bush.
May 31, 2000: Riggs Bank N.A. today announced that the Board of Directors of RIMCO, a wholly owned investment management subsidiary, has elected Jonathan J. Bush President & Chief Executive Officer and a Director, replacing Philip Tasho who resigned. In addition, Henry A. Dudley, Jr. was elected Chairman.
"Mr. Bush will continue as Chairman and Chief Executive Officer of J. Bush & Co., an investment management company he founded in 1970, which Riggs acquired in 1997. Mr. Dudley, a 24-year veteran of Riggs, will continue to be responsible for all of Riggs Bank's investment management, trust and private banking business.
http://www.disinfopedia.org/wiki.phtml?title=Jonathan_J._Bush

According to several of those sources and others familiar with the account, more than $300 million of the country's energy earnings has been deposited in the account by international oil companies active in Equatorial Guinea, including ExxonMobil Corp. and Amerada Hess Corp. The money is under the direct control of Obiang, the sources say.
The arrangement has raised concerns at the International Monetary Fund, where officials have refused to provide assistance to Equatorial Guinea until Obiang accounts for his country's oil money and have urged him to transfer it to its home treasury.
http://www.globalpolicy.org/security/natres/oil/2003/0122gui.htm

From what I have been given to understand, the Riggs Bank may very well experience considerable difficulty in coming up with $300 million CASH. It is at times like these that an uncle might call on his nephew for assistance.

[seemslikeadream]

2. Feds missed problems at Riggs for decades

By Washington Post
Jun 03, 2004 - 07:55:16 am PDT


WASHINGTON -- Federal examiners found shortcomings in Riggs Bank's anti-money-laundering compliance as far back as 1997 but did little to remedy them until years later, a top federal bank regulator said Wednesday.

Daniel Stipano, deputy chief counsel of the office of the Comptroller of the Currency (OCC), told a House subcommittee Wednesday that the OCC made "errors of judgment" with respect to Riggs' compliance with the Bank Secrecy Act (BSA), the law requiring banks to monitor and report on suspicious customer activity.


Riggs was fined $25 million last month after a yearlong OCC investigation found that numerous, multimillion-dollar transactions in the bank's embassy banking group should have been reported to law enforcement agencies as suspicious but were not. Both the Senate and House banking committees have called hearings on Bank Secrecy Act enforcement and have been sharply critical of regulators for failing to catch Riggs' problems sooner.

Of particular concern, said Rep. Sue Kelly, R-N.Y., is whether regulators are ensuring that banks are on the lookout for possible terrorist financing.

"We find a regulator that was slow to act, even after the September eleventh terrorist attacks inside our borders made the threat posed by terror funding networks all too clear," said Kelly, who heads the subcommittee on oversight and investigations, which held Wednesday's hearing.
http://www.tdn.com/articles/2004/06/03/biz/news03.txt

[seemslikeadream]

3. The Saudi Connection

That's too bad, because, a few months ago, Saudi Arabia was referred to as "the epicenter of terror financing" by a former Treasury official in congressional hearings. Even the Saudi government's English-language weekly, Ain-al-Yaqeen, bragged that the royal family and the Saudi Kingdom have spent more than $70 billion over the last twenty years "to spread Islam to every corner of the earth." However, what they spread, is Wahabbism, the Saudi version of Islam, which, according to former CIA Director R. James Woolsey, "is the soil in which anti-Western and anti-American terrorism grows." Wahhabist clerics virulent calls against all infidels now provide the legitimacy to murder non-Muslims who work in Saudi Arabia (as we saw happen this past weekend) and may ultimately bring down the House of Saud, which allowed the incitement to go on for decades.

According to a report submitted to the president of the U.N. Security Council in December 2002, "One must question the real ability and willingness of the Kingdom to exercise any control over the use of religious money in, and outside, the country."

However, the U.S. administration and the Saudi government assure us that the Saudis are our allies in the war on terror, even while we learn that the Saudi National Guard facilitated al Qaeda's attack last May on a housing compound in Riyadh that killed 35 people and injured 200; or that the Saudi embassy in Washington, D.C., transferred tens of millions of dollars that are suspected to have gone to terrorists through Riggs Bank.

Saudi Foreign Minister Prince Saud al Faisal recently denied publicly the Kingdom's contributions to Hamas. The prince may be hard-pressed then to explain the tens of millions of dollars raised and provided by Saudi Interior Minister Prince Naif to families of Hamas suicide bombers, and additional tens of millions of dollars that Saudi charities such as WAMY and the IIRO sent to Hamas's fronts in the West Bank and Gaza.

more
http://www.nationalreview.com/comment/ehrenfeld200406010834.asp

[Snazzy]

4. Executive At Riggs Was Bank's Examiner

Executive At Riggs Was Bank's Examiner
Vice President's Conduct As Regulator Under Examination
By Kathleen Day and Terence O'Hara
Washington Post Staff Writers
Friday, June 4, 2004; Page E01


The federal bank examiner responsible for overseeing Riggs Bank during the years it repeatedly violated anti-money-laundering rules joined Riggs as a vice president just weeks after he left the government in 2002, regulators acknowledged yesterday.



Comptroller of the Currency John D. Hawke Jr., whose agency is one of the two main regulators of U.S. banks, has known for several weeks that R. Ashley Lee, the "examiner in charge" of Riggs from 1998 to 2002, went to work for the bank after leaving the agency, said Robert M. Garsson Jr., a spokesman for Hawke.

In response to questions yesterday, Hawke's office said he is investigating Lee's conduct to determine whether "inappropriate influence" by the bank delayed regulatory action against Riggs while Lee worked for the government. Neither Hawke nor his aides mentioned Lee or the internal investigation during two congressional hearings this week into Riggs, which last month was fined a record $25 million for failing to report suspicious transactions -- particularly those connected to embassy accounts for Saudi Arabia and Equatorial Guinea.

"We don't know whether Lee's employment at the bank had any bearing on the problems we've discovered," said Garsson. "In hindsight we believe that we should have brought this relationship to the attention to Congress, and we regret that we did not."

....

http://www.washingtonpost.com/wp-dyn/articles/A14012-2004Jun3.html

[seemslikeadream]

5. NOT just distractions!

Hi Snazzy

I'm so desperate for Riggs news, here's some thoughts from "Luke"


by Luke

For instance, the World Bank says they oppose this war, and some of their employees from abroad even marched against it. World Bank bosses, however, wanjt in on the rebuilding contracts and the future of Iraq even if they don't wanjt to particip
This split, if we can drive a big enough wedge, could leasd to the formation of two trading and military blocs: One dominated by the US, Citibank, Riggs, etc and another dominated by Europe, the UN, and the global financial institutions. Every Third World nation would then be able to bid then against one another for a better deal and treat each as a counterweight to the other.

If we can DIVIDE the ruling class, we can later CONQUER it. If we let them divide US, than it is WE who will be conquered!

http://216.239.41.104/search?q=cache:6E9OewZXNd8J:dc.indymedia.org/newswire/get_comments/index.php%3Flimit_start%3D21790+Riggs+bank+khashoggi&hl=en

[Snazzy]

6. It's amazing

maybe (ok, I'm pretty jaded and cynical by now) that this is still flying under the radar. At least it's a big biz story in DC and WaPo is on it everyday. Not sexy enough for cspan somehow.

You have a national landmark of a bank dissolving due to money laundering for African oil bribes on the one hand, and funding several aspects of 9/11 on the other. One Bush owns a division. Another (Jeb) probably enabled the money laundering in Florida. Another bank is going down from that (BAC, which links to Nicaragua, Bush/CIA stomping grounds). CEO is a Bush Pioneer.

That last WaPo story is great--the usual fox guarding the henhouse: former regulator joins bank. FED knew about problems since '97 but didn't act until '03, and a wrist slap so far.

This is the heart of the beast. This is follow the money.

You know Halliburton and all the bribery for oil stuff is just one investigative reporter away from jumping into this money laundering gumbo. Too bad we don't have one.

[Snazzy]

7. Leap off here for some massive revelations--SEC filings

like this:

3. Embassy Banking/International Private Banking Relationships

Extensive and frequent suspicious cash, monetary instrument, and wire activity at Riggs occurred within the accounts held by the government of a foreign country, politically exposed persons of that country, and the companies owned by such persons, where very little monitoring of activity was performed by the bank. Within this relationship, there were a number of transactions that exhibited classic indicators of suspicious activity, or at a minimum lacked any reasonable business or economic purpose, but were never identified and reported. These transactions included:

• aggregate cash withdrawals from the accounts of the government, politically exposed persons, and government employees that totaled tens of million of dollars over a 2-year period, the majority of which were conducted through PUPID transactions;

• dozens of sequentially numbered international drafts drawn from a politically exposed person’s account on 3 dates over a 2-month period, totaling millions of dollars, and made payable to the account holder, which were returned to Riggs for crediting back to the account; and

• dozens of sequentially numbered cashier’s checks purchased from the same above-listed account on 3 different dates over a period of six months, totaling tens of millions of dollars, and made payable to the account holder, half of which were returned to Riggs for deposit back into the account.

http://www.sec.gov/Archives/edgar/data/350847/000095013304002061/w97547exv99w5.htm

http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000350847&owner=include

[Snazzy]

8. that sounds like it's about Princess Bandar not EG n/t

[seemslikeadream]

10. cash withdrawals of as much as $1 million !

If my husband gets paid in cash from a job we can't even put it in the bank without feeling like criminals.


The midsize Washington bank with a nearly a franchise on business with the capital's diplomatic community was accused of failing to report to the government suspicious transactions in accounts controlled by diplomats from Saudi Arabia and officials of Equatorial Guinea. The FBI and Treasury regulators have investigated the Saudi transactions — which included cash withdrawals of as much as $1 million — for connections to terrorism financing.
http://washingtontimes.com/business/20040603-102828-1533r.htm

[seemslikeadream]

9. Senators Raise Doubts About Banks' Antiterror Measures

By TIMOTHY L. O'BRIEN
Published: June 4, 2004

Doug Mills/The New York Times
Senator Richard C. Shelby questioned effectiveness of regulators.


"I don't get a sense of urgency in dealing with this matter," Mr. Sarbanes said, adding that recent compliance problems at banks like the Riggs National Corporation "could well go to some basic issue of our nation's security."

Federal investigators are examining whether Saudi Arabian and Equatorial Guinean accounts at Riggs were used for money laundering or financing terrorist activities. The Comptroller of the Currency recently fined Riggs $25 million for a series of compliance problems involving those accounts. No criminal charges have been filed against the bank.

John D. Hawke Jr., who regulates national banks as comptroller, conceded that his agency was aware of compliance problems at Riggs as early as 1997 but did not begin serious action against the bank until last year. While defending the abilities and dedication of his examiners, he said his agency waited too long to crack down on abuses at Riggs and described the situation at the bank as "deeply troubling."

Senator Shelby questioned Mr. Hawke about possible problems with Riggs accounts from other countries, including Cuba, Iran, Iraq, Nigeria, Sudan and Syria. Mr. Hawke replied that all of Riggs's accounts are under review.

Riggs was not the only bank identified. Senators raised doubts about how well the Federal Reserve has monitored Swiss banking giant UBS. The Fed, in a joint action with Swiss regulators, fined UBS $100 million last month for violating dollar trading restrictions with Cuba, Iran, Libya and the former Yugoslavia. The illicit trading, involving about $4 billion to $5 billion, went on for eight years undetected by Fed examiners who audited UBS's activities in Zurich.
The Fed has said that UBS employees lied to their superiors and to Fed examiners about their trading, making detection difficult. UBS, which cooperated with the investigation, has not been charged with any crimes.

more
http://www.nytimes.com/2004/06/04/business/04bank.html?ex=1087012800&en=908c1117979acdb5&ei=5062&partner=GOOGLE

[Snazzy]

11. Senate Banking Chairman Seeking Details on Former Federal Examiner ....

Senate Banking Chairman Seeking Details on Former Federal Examiner Who Went to Work at Riggs

By Marcy Gordon The Associated Press

Published: Jun 4, 2004

WASHINGTON (AP) - The Senate Banking Committee chairman is asking for details about the federal examiner who oversaw Riggs Bank during a period of deficiency and later became a Riggs vice president.

R. Ashley Lee was the lead examiner for Riggs in the Office of the Comptroller of the Currency, a Treasury Department agency, from 1998 until he retired in October 2002 and went to work for the bank two weeks later, officials said, confirming a report in Friday's Washington Post.

Panel chairman Sen. Richard Shelby, R-Ala., and Rep. Sue Kelly, R-N.Y., who heads a House oversight committee, were not told of the examiner's status when they questioned Comptroller of the Currency John Hawke and an aide about Riggs in separate hearings this week.

Shelby plans to send Hawke a letter asking for information related to Lee, said his spokesman, Andrew Gray. "We were not aware of this, and he (Shelby) felt that it's something that should have been brought up," he said.

....

http://ap.tbo.com/ap/breaking/MGBOSBBU2VD.html

[seemslikeadream]

12. Too bad this story isn't available

US bank regulator issues money laundering warning
Forbes - 6 hours ago
... after the OCC came under fire from members of Congress for being slow to spot and act on violations of anti-money-laundering laws at Riggs Bank in Washington ...

found on google