The Catbird Seat

THE CATBIRD SEAT

To see where Greed and Evil meet, climb into the catbird seat.

Part II - THE NESTS

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I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country . . . corporations have been enthroned and an era of corruption in high places will follow, and the money of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.

— Abraham Lincoln

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When the notorious criminal Willie Sutton was asked why he robbed banks, his famous response was, ‘cause banks is where the money is.

More recently, we have amongst us another crooked Willie — but instead of sitting in jail, this Willie formerly resided in the White House. Ask this slick Willie where the money is and he may answer, “it depends on what your definition of is, is.”

If asked in confidence by one of his attorney cronies, however, he would probably say: “Hey, that’s a no-brainer! Goldman Sachs (his largest campaign contributor), or Citigroup, the Bank of New York, American International Group, the U.S. Treasury, the World Bank, the International Monetary Fund, the Export-Import Bank, State Treasuries, Housing Authorities,” or any number of other entities that have check-writing authority for the public’s money.

These “banks” also include employee pension plans and similar federally-regulated “safe” depositories for your money and mine.

In these pages we will attempt to shine a light into some of the dark caverns where these financial bats nest and hide our money. You’ll get to see just how these nocturnal creatures legally — or illegally — slip millions into their individual nests under the guise of respectability and under the cover of financial institution secrecy laws.

You will also get a glimpse of some gargantuan nests that have taken numerous generations to build, such as the Committee of 300, Triads and the Yakuza.

You’ll also get a closer look at some huge nests of more recent construction, such as Wall Street and the United Nations.

And you’ll even see some new nests that have only been “officially” around for less than a decade, yet are just as gargantuan and ugly -- such as the Red Mafiya and the World Trade Organization.

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So, if you’ve taken your daily dose of Valium, or had a few glasses of Thunderbird, then you may be up to taking our tour of THE NESTS . . .

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Akin, Gump, Strauss, Hauer & Feld - One of the largest nests of Lobbyists in the world.

In 1998, this firm declared total lobbying income of $11,800,000. Among their clients are the likes of Alliance of American Insurers; America Online; American Express; American Financial Group; Apollo Advisers; AT&T; Biotechnology Industry Organization; Boeing Co.; Capital Gaming International; CBS Corp; Citigroup; Korean International Trade Assn; Miller & Chevalier; National Hockey League; Pfizer; PG&E Corp; Pharmaceutical Rsrch & Mfrs of America; Philip Morris; Pohang Iron & Steel; Samsung Electronics; Sri Lanka Apparel Exporters Assn; Time Warner; and Warner-Lambert, just to mention a few.

See in Part I: George Bush; George W. Bush, Jr; Robert Rubin

Allstate Insurance - From Conspirators’ Hierarchy:

. . . The English companies controlled by the British royal family are Eagle Star ... and the Prudential Insurance Company, which own and control most American insurers, including Allstate Insurance. . . .

American Cell Technology - From Derailing Democracy: . . . Weird Science -

Few people in the U.S. are aware that a truly “watershed achievement in biotechnology” occurred in Nov of 1998, according to British media sources, when “American Cell Technology (ACT), a leading private biotechnology company cloned the first human embryo and let it develop for 12 days before destroying it.”

This remarkable, though rather dubious, achievement was accomplished “using a cell from a man’s leg and a cow’s egg,” and is believed to be only the first of many “human embryos that have been created and destroyed since November.”

Already there is a competitor in the field as well, as “another U.S. company, Geron, is also reported to be attempting to clone human embryos.”

You might think that these would be newsworthy events, particularly in the country pursuing this research, but you would be mistaken. You might also think that human cloning was banned in the U.S., but again you would be mistaken. As it turns out, “Therapeutic cloning of humans is illegal in Britain, though not in the United States,” where it is also apparently not a matter for public debate. [Another “Don’t Ask, Don’t Tell” policy?]

These are not, mind you, actual people that are being created and destroyed, but “therapeutic clones.” Therapeutic clones are grown ... as a source of tissue in an attempt to create human “stem cells,” or “master cells,” for use in transplantation and treatment of disease.

So these are actually just collections of human embryonic tissue that roughly approximate the shape of an actual human. Besides, the clones are only grown for 12 days and ACT’s Director of Tissue Engineering assures us that “the embryo cannot be seen as a person before 14 days,” that being the age at which the embryo would implant itself onto the wall of its mother’s womb.

Some people believe that life begins at conception, while others believe it begins at birth. But now we know that life actually begins at 14 days, and we know this because no less an authority than the Director of Tissue Engineering has said it is so.

And, of course, there is no reason to doubt the company’s sincere assurances that it actually is destroying all their little creations, though one is prone to wonder exactly whose leg it is that provided the cellular material being utilized to create these clones. . . .

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From Associated Press Aug 23, 2000: WASHINGTON - U.S. to Allow Research on Embryo Cells . . .

President Clinton today touted new federal guidelines allowing scientists to conduct federally funded research on cells taken from human embryos, saying they offer “potentially staggering benefits.”

The guidelines for the research are vehemently opposed by anti-abortion groups. The guidelines set out the criteria the National Institutes of Health will use to consider applications for federal grants to study embryonic stem cells . . .

Experts believe the cells could be invaluable in treating many serious diseases, such as diabetes and Alzheimer’s. But some oppose the research on grounds that to get the cells, scientists must destroy human embryos. . . .

Clinton said it would deal only “with those embryos that are collected in in-vitro fertilization.”

The research involves what are called pluripotent stem cells, the foundation cells that give rise to all of the other cells, tissues and organs in the body.

Opponents threatened to stop the effort.

“I don’t think that they, by law, should be allowed to do this,” Rep. Jay Dickey, R-Ark., told the newspaper.

“We’re talking about dismembering a living being, according to our interpretation,” said Dickey, who has introduced legislation banning the destruction of human embryos.

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From The New York Times, 8/24/00:

New Rules on Use of Human Embryos in Cell Research - The National Institutes of Health issued long-awaited rules yesterday that would permit federally financed researchers to work on human embryonic stem cells, cells derived from the very early embryo. . . .

Opponents of abortion have objected to federal approval of such research because the embryos, which they consider to be capable of life, are destroyed in the process. . . .

In an attempt to sidestep the abortion issue, the National Institutes of Health would allow its researchers to use only cells that were obtained by private firms. The agency’s researchers themselves would not be allowed to extract the cells from discarded embryos.

The cells may legally be derived by anyone who does not receive federal financing. Human embryos are created by mixing eggs and sperm in fertility clinics. . . .

President Clinton, in a press conference yesterday, referred to the “potentially staggering benefits of this research.”

“I think we cannot walk away from the potential to save lives and improve lives, to help people literally get up and walk, to do all kinds of things we could never have imagined,” the president said, “as long as we meet rigorous, ethical standards.” . . .

Senator Sam Brownback, Republican of Kansas, the Senate’s leading critic of the agency’s policy, said in a statement yesterday that human embryonic stem cell research was “illegal, immoral and unnecessary.”

Mr. Brownback said the research was prohibited by a Congressional ban on financing research that led to the destruction of human embryos, that sought to benefit by taking human life, and that would lead to treatments that can be developed by other means: the use of adult stem cells.

One new issue that has been raised in recent months comes from the finding that a different kind of stem cells found in the organs of adults are far more versatile than supposed. The opponents of financing embryonic stem cells have argued that the promised health benefits could be obtained just as well from a patient’s own adult stem cells. . . .

Use of a patient’s own stem cells would avoid both the ethical problems of embryonic stem cells and the threat of immunological rejection. . . .

Last week a scientific committee recommended to the British government that researchers should be allowed to embark on therapeutic cloning, in which an ordinary body cell is taken from a patient and inserted into a human egg cell whose own nucleus has been removed.

In principle, the inserted nucleus can then direct the egg to grow into an entire adult organism. This is the process that was used to clone Dolly the sheep . . .

A human egg cell with an introduced adult cell nucleus would presumably be a viable embryo, but inserting it into a uterus would be a criminal offense in Britain. For therapeutic cloning, the egg would instead be cultured in laboratory glassware and exposed to signals that would convert it into the type of tissue that the patient needed to have replaced. . . .

In the United States therapeutic cloning could legally be undertaken by private researchers but no-one is known to have done so, Dr. Lana Skirboll, director of science policy at the National Institutes of Health said. . . . [Apparently she didn’t read the British newspaper report about American Cell Technology.]

Therapeutic cloning is specifically prohibited for federally financed researchers by the guidelines issued today. . . .

See in Part III: The Unborn

American Express Bank International - From The Laundrymen:

. . . Over the years, the Justice Department has become more adroit at digging deeper into a bank’s affairs and rooting out the laundrymen . . .

At the end of 1994, the government’s wrath was directed at the American Express Bank International, after two of its senior officers were indicted in Houston for helping to wash $40 million belonging to Mexican drug trafficker Juan Garcia Abrego. . . .

A Mexican gas station owner named Ricardo Aguirre Villagomez ... was Abrego’s primary laundryman. Under Villagomez’s supervision, drug money collected on the streets of Texas was sent through exchange houses and banks along the Mexican border to Switzerland.

From there is was wired to a holding company in the Cayman Islands established for Villagomez by Antonio Giraldi and Maria Lourdes Reategui at the Beverly Hills branch of AMEX. Some of his money was invested in a Blockbuster Video franchise . . .

But the lion’s share went into American real estate. Giraldi and Reategui accepted $29 million as collateral for $19 million worth of property loans, reputedly making Villagomez the bank’s biggest customer — at least until U.S. Customs identified and froze the funds in the Caymans.

Giraldi and Reategui both pleaded not guilty to several charges, including money laundering, but a Brownsville, Texas jury found otherwise. He was sentenced to 10 years, and she got 3 ½. The government then went after the bank, fining it $7 million.

American Express Bank International also had to forfeit $40 million of Villagomez’s laundered money and assets, and was obliged to spend $3 million on employee training. . . .

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From Conspirators’ Hierarchy: . . . Others on the board of Xerox are Howard Clark of the American Express Company, one of the main conduits for moving drug money through “travelers checks” . . .

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See also: Manuel Noriega.

Banco Nazionale de Lavoro - From Diplomacy by Deception: . . . In 1981, Iraq asked the Banco Nazionale de Lavoro (BNL) in Brescia, Italy, for a line of credit to buy weapons from an Italian company. That company later sold land mines to Iraq. Then in 1982, President Ronald Reagan removed Iraq from the list of countries that sponsor terrorism in response to a State Department request.

In 1983, the U.S Agricultural Dept provided Iraq with loans amounting to $365 million, ostensibly to purchase agricultural products, but subsequent events disclosed that the money was used to purchase military hardware. In 1985, Iraq approached the BNL branch in Atlanta, Georgia, with a request that the bank process its loans from the U.S. Agricultural Dept’s Commodity Credit Corporation. . . .

It was not until 1987 that President Bush made a number of public references supporting Iraq, one in which he said: “The U.S. must build a solid relationship with Iraq for the future.” Shortly thereafter, BNL’s Atlanta branch secretly agreed to a $2.1 billion commercial loan to Iraq. In 1989, hostilities between Iraq and Iran came to an end. . . .

For more GO TO > > > A Flock of Elephants; The Elephants Nests

Bank of America - From The Buying of the President (1996): . . . While the interstate [banking] bill was moving through conference, on Aug 23, 1994, Clinton and [Hugh] McColl (president of NationsBank) were present at the White House Community Development bill signing, and the president declared, “Today, I’m proud to announce commitment from two of the nation’s leading banks to help us in this effort--$25 million from NationsBank and $50 million from Bank of America over the next four years.”

Five weeks later the interstate banking bill was law; the $3.5 million loan to the DNC came two weeks afterwards.

Bank of Boston - From The Laundrymen: . . . Despite peace initiatives in Northern Ireland, the Irish Republican Army (IRA) continues to ride shotgun on shipments for international traffickers, deal drugs, run protection rackets, and rob banks and post offices on mainland Britain. ...

Cash-rich, they wash their money through pubs and drinking clubs, construction firms, taxi companies, and private security services. Once they’ve laundered it, they invest their money in such places as the London Stock Exchange.

Nearly $5 million a year is sent to the IRA from the United States through NORAID. Considering the large Irish population in Massachusetts, it’s hardly surprising the Bank of Boston has been used as a sink for a cell of the Provisional IRA. In the early 1970s, an ad hoc coalition was formed between active members of that cell and local Mafia dons.

Organized crime wanted marijuana, the Provo sympathizers became the importers. The middleman, Joe Murray, ... ran a towing company in nearby Charlestown. ... Murray smuggled tons of drugs into the Boston area on fishing boats. The cash he received for his efforts, laundered through the Bank of Boston, was spent on arms, which those same boats then transported to Northern Ireland.

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The Bank Secrecy Act of 1970 attempted to force banks, savings and loans, and other financial institutions to report all cash transactions over $1,000 to the IRS. But the ceiling proved to be too low. . . . Because there weren’t enough people to process them, most of those forms wound up decomposing in a Detroit warehouse.

Although forty-three ... banks, including Chase Manhattan and Bank of America were penalized for a total of $20 million, the currency-reporting requirement was still widely disregarded until 1985. That’s when the government decided to call time. It accused the Bank of Boston of gross and flagrant violation of the Bank Secrecy Act, alleging that the bank had failed to report 1,163 cash transactions amounting to $1.22 billion.

Among the companies the Bank of Boston had supposedly exempted from cash reporting was the law firm of F. Lee Bailey. More ominously, the bank had given dispensation to a pair of real estate agencies controlled by a local organized crime boss. In the face of overwhelming evidence, the Bank of Boston pleaded guilty, admitting to an additional $110 million worth of violations, and was fined a then-record $500,000. . . .

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Bank of Boston has since been purchased by Credit Suisse Bank. . . .

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Bank of Credit and Commerce, Inc. (BCCI) - From The Laundrymen:

Banco Ambrosiano was the greatest banking collapse in Europe since the end of World War II. It was shortly to be followed by the greatest banking collapse in the history of banking. . .

In 1988, the Justice Department launched Operation C-Chase, the letter C standing for currency. Posing as drug dealers, undercover agents put out the bait that they had loads of currency to launder. And BCCI fell for it. . . .

A costly and complicated five-year operation— involving agents from Customs, the IRS, the DEA, and the FBI— C-Chase produced more than twelve hundred conversations and nearly four hundred hours of clandestinely recorded videotape. By assisting drug dealers to wash $34 million, the Justice Department was able to indict, and in 1990 to convict, several BCCI bankers and dozens of other individuals. In one blow, the Americans had unknowingly pulled the bottom out from under a gargantuan house of cards.

The man who built that house was Agha Hasan Abedi. ... president of Pakistan’s United Bank Limited from 1959 to 1972 . . . Abedi, who had spent years building up a network of wealthy Arab clients and friends, now appealed directly to them, and with their deep pockets started his own bank . . .

Abedi’s main backer was Sheikh Zayed Bin Sultan Al-Nahayan, ruler of Abu Dhabi and president of the United Arab Emirates. Also behind Abedi were various members of the Saudi royal family, as well as officials from the Bank of America, then the largest bank in the world. Bringing the Bank of America on board was an enormous coup because it gave Abedi’s venture instant credibility. . . .

His skill in setting up what he claimed would be the first multinational bank for the Third World was astounding. To begin with, he deliberately registered the holding company in Luxembourg so that he could hide behind the Grand Duchy’s strict banking secrecy codes. A year later, Abedi opened BCCI branches in four Gulf states and in Asian neighborhoods in several British cities. Then, in 1975, he registered the bank in the Cayman Islands, but moved his top management to London, where the Bank of England gave BCCI additional credibility by awarding it a sound bill of health every year for the next fifteen years. . . .

By 1977, Abedi was bragging that BCCI was the world’s fastest-growing bank, with 146 branches in 32 countries and total assets of $2.2 billion. Although he had 45 offices in the United Kingdom, the grand prize, as Abedi saw it, was a banking network in America.

To help him get that, he had turned to Jimmy Carter’s friend, and slightly disgraced former budget director, Bert Lance. Initially, Abedi hired Lance as a BCCI consultant. Shortly thereafter, when Lance needed to sell his shares in a Georgia bank, Abedi came up with a willing buyer named Gaith Pharaon, a Saudi businessman ...

Abedi also helped Lance pay back a $3.4-million loan. Such kindness gave Abedi access to Carter, whom he proudly declared to be one of his closest friends. . . .

Three years after his initial foray into the U.S., Abedi expanded into Panama, where General Noriega soon became on of his largest clients. A year later, Abu Nidal, the Middle Eastern terrorist, began chaneling funds through BCCI. Nidal was soon followed by members of the Medellin cartel.

By 1988, Abedi controlled 417 branches in 73 countries and reported assets of $20 billion. And, all this time, the Bank of England maintained that everything was just dandy.

Clearly, it had somehow missed a few vital points. . . .

An affidavit lodged in a U.S. court in 1978 showed that Bank of America, then holding a 30% share in BCCI, wasn’t pleased with the way Abedi’s managers were lending money. . . .

BCCI’s treasury posted such huge losses from its irregular practices that Abedi became desperate to find fresh cash, and turned to Latin America. He’d already opened an outpost in Columbia. Now he added seven branches, five in Medellin alone ...

It’s hardly surprising the Medellin offices were awash with cash. One of their major depositors was Jose Gonzalo Rodreguez Gocha, known even in those days as a cartel kingpin. Establishing an important presence in Columbia was a logical extension of BCCI’s corporate culture. Abedi exerted such severe pressure on his employees to bring in deposits, putting their jobs and lifestyles on the line, that no one much cared where those deposits were coming from.

BCCI Miami was another noteworthy base, constantly accepting cash deposits in excess of $10,000 and then not reporting them to the IRS. In some cases, the bank’s private jets would fly the cash to branches in Panama or the Caymans, deposit it there, then wire it to BCCI in Luxembourg, where it disappeared. . . .

On the heels of the Bank of Boston affair in 1985, BCCI shifted a lot of its laundry work to Canada. Abedi also opened extensive networks in the United Arab Emirates (UAE) and in Hong Kong. He explained BCCI’s success by saying that he’d found small, lucrative niches that other banks weren’t willing to exploit. ...

But the UAE operation was put in place to serve drug traffickers who dealt in heroin from the Golden Crescent, and the Hong Kong operation catered to the Golden Triangle crowd.

BCCI also did remarkably lucrative business in Nigeria, despite the world oil glut that had depressed the local economy, and became the most important sink for the massive heroin trade being developed in black Africa. Knowing his clients, Abedi quickly expanded BCCI’s operations throughout the Caribbean — opening branches in marijuana-rich Jamaica, Barbados, Curacao, and Trinidad, and finally the Bahamas — where he also set up strings of shell companies to facilitate the movement of dirty money.

But the faster he opened banks, the faster leaks started to spring. In 1986, Abedi stole $150 million from a staff pension fund to plug holes in his balance sheet. Now fearful that the Bank of England was on to him, he decided to take the treasury out of Britain.

The following year, auditors Ernst & Young reviewed the books of the holding company and informed Abedi that they were worried about “excessive management power” and serious weaknesses in BCCI’s systems and controls. Meanwhile, in Basel, those bank supervisors were so unhappy with BCCI they forced Abedi to appoint one auditor— for the entire international network.

Then came the indictments in Florida. BCCI was fined $15.3 million for its money laundering activities. . . . official investigations were launched in Canada, France, Luxembourg, Brazil, Singapore, Bermuda, the Caymans, Cyprus, and even Nigeria. . . .

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In the States, one investigation went back ten years, to the time when BCCI was romancing Bert Lance and owned Financial General Bankshares, a financial holding company in Washington, D.C. . . .

In 1982, Financial General was renamed First American Bankshares, a new entity totally independent of BCCI. . . . the National Bank of Georgia and the Independence Bank of Encino, California, both supposedly owned by Pharaon, had been surreptitiously funded by Abedi through a $500 million loan from BCCI. As collateral, Pharoan had signed over the shares of the two banks.

And although Abedi later arranged for First American Bankshares to buy the National Bank of Georgia, he had effectively, albeit illegally, gained control of three U.S. Banks. . . .

Being a staunch believer in the doctrine that “credibility is contagious,” Albedi and his cronies installed prominent Americans on First American’s board.

Clark Clifford ... one of the most respected attorneys in Washington, was named chairman. Robert Altman, who was married to TV’s “Wonder Woman,” Lynda Carter, became the bank’s president. . . .

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By March 1990, the Governors at the Bank of England had their eyes forced open by the British intelligence services, which had produced evidence that Abu Nidal was among the many dubious account holders at BCCI . . . Eight months later, a report to the Governors compiled from private files seized from Abedi’s right-hand man, BCCI’s chief executive Swaleh Naqvi, detailed extensive fraud throughout the bank.

Among the practices outlined by the Naqvi files were diverted deposits, phantom loans to Abedi’s friends, and totally fictitious loans laundered through other banks to obliterate the money trail. Two months after that, in January 1991, the Governors were informed that BCCI had amassed some $600 million in unrecorded deposits.

On March 4, 1991, almost as if they had run out of excuses at last, the Governors ordered an audit of the bank.

It was only when that report was finished in July that the Governors shut down BCCI.

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Back in New York, Morgenthau and Moscow had indicted several people, among them Clifford, Altman, Abedi, and Naqvi. The first two were ordered to stand trial, although the case against them subsequently petered out. The second two became the subject of extradition warrants. A separate warrant was issued for Gaith Pharaon. Among other things, they wanted him to explain his dealings in the failed Florida savings and loan CenTrust.

It seems that in 1989...[Abedi] conspired with Pharaon to buy CenTrust. So the prosecutors allege. Pharaon secretly acquired 5% of CenTrust on behalf of BCCI. By the time federal banking regulators closed down CenTrust, Abedi and/or Pharaon and/or BCCI owned, and never declared, at least 28% of it.

The government claimed Abedi and Pharaon used CenTrust not only to launder BCCI funds but to funnel various political donations through CenTrust, mainly to Democratic campaign funds, including a $50,000 gift from Pharaon to the Carter Presidential Center.

In May 1994 ... Swaleh Naqvi was extradited to the U.S. from Abu Dhabi. A month later, a court in Abu Dhabi convicted twelve BCCI officials in absentia. Naqvi was sentenced to 14 years in jail. Abedi, who by that time was bedridden in Pakistan, was sentenced to 8 years.

With very little left to gain, Naqvi pleaded guilty in America to conspiracy, wire fraud, and racketeering charges. He was sentenced to 11 years in prison and ordered to pay $255 million. Pharaon’s assets in the States, valued at more than $37 million, were frozen.

Although the Pakistani government never formally replied to the U.S. application for Abedi’s extradition, the chief minister of the Sindh province ... repeatedly told inquiring journalists that he would never consider such a request.

It became a moot point when Agha Hassan Abedi died in Karachi in Aug 1995. He was 73.

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With as much as $9.5 billion believed to be missing worldwide from BCCI’s books ... it would be unfair to say that there was just one culprit. It took a lot of people a lot of time, and a lot of people to turn a blind eye, for that much money to disappear.

It’s true that the CIA had amassed damning information about Abedi and BCCI that should have been passed along to other federal agencies, and wasn’t. It’s also true that various U.S. law enforcement agencies made bad decisions, which delayed any direct action against BCCI. But if only one damning finger is to be pointed, it must be at the Bank of England. . . .

The role of the intelligence services in the BCCI debacle will not be revealed in Britain for at least thirty years, if ever, although it should eventually come to light in the U.S., thanks to the Freedom of Information Act. When it does, both the American and British intelligence services are expected to have a lot of questions to answer.

One of them is, Why did the U.K. security services insist that the Bank of England delay closure of BCCI for perhaps as long as fifteen months?

Another is, Why did the Bank of England comply?

Both answers lie in the fact that BCCI had a working relationship with Saddam Hussein.

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The National Security Council used BCCI to launder funds for the Iran-Contra affair. The CIA maintained accounts with BCCI in order to wash money destined for Afghan rebels. The Defense Intelligence Agency also kept a slush fund with BCCI.

One of Abedi’s front men in the U.S. was Kamal Adham, the former chief of Saudi intelligence, who was allowed to pay a $105 million fine to avoid a jail sentence. Through him, it has been suggested, the British M.I.6 found BCCI to be a convenient channel as well.

It is known that BCCI was involved in the transfer of North Korean Scud-B missiles to Syria. It is known that BCCI helped to broker and then to finance the sale of Chinese Silkworm missiles to Saudi Arabia. And it is known that BCCI acted as middleman when the Saudis needed Israeli guidance systems for those missiles.

Whether or not the Bank of England was doing the bidding of the intelligence services a) to protect an ongoing intelligence operation, b) to allow the intelligence services time to cover themselves, or c) both, people living in a democracy have an inalienable right to know what is being done in their name and why. . . .

What’s more, there’s no reason to believe that the lessons of BCCI have been learned by any of the banking regulatory bodies around the world. . . .

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And in Part I: George Bush; Hillary Clinton; William Clinton

Bank of Hawaii - From Pacific Business News, 2/14/00: Bad Daewoo Loans Force Bank of Hawaii to “Learn Its Lesson” in Asia . . . At the time, the decision seemed like a no-brainer to Pacific Century Financial Corp officials.

The bank would lend money to a massive Korean “chaebol,” a company with many subsidiaries, a worldwide presence and government backing so strong the company “looked sometimes like an instrument of government policy,” according to David Houle, Pacific Century’s CFO. . . .

Then came the crisis. In 1997 and 1998, Asian currencies collapsed en masse, foreign investors fled and government credit dried up.

Korea’s famed chaebols suddenly seemed very much alone— none more so that Daewoo, Pacific Century’s debtor, which flirted with collapse. Daewoo is billions of dollars in debt and is still struggling to arrange payments to creditors.

This struggle has hit Pacific Century’s balance sheets. In the fourth quarter of 1999, the bank “charged off,” or canceled, $19.5 million of its $30.2 million in outstanding loans to Daewoo. The other $10.7 million are “on nonperforming status,” according to Pacific Century’s fourth- quarter report . . .

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From Pacific Business News, 8/7/00: Bank of Hawaii Stock Plummets . . . As if 5-year stock lows, profits down 83 percent and hundreds of millions of dollars in bad loans aren’t enough, Pacific Century Financial Corp is now facing tough, incisive questions from analysts and institutional investors disappointed in the bank’s recent performance. Such uncertainty has fueled the recent plummeting of Pacific Century’s stock . . .

Analysts are asking Pacific Century, owner of Hawaii market leader Bank of Hawaii, to reconsider its basic strategies for doing business. Among their comments:

● Pacific Century has loaned too much money to too few individual businesses, according to Rosalind Looby, bank analyst for New York securities firm Donaldson Lufkin and Jenrette. Looby says she is “surprised at the size” of some of the bad loans the bank made to national companies.

● The bank’s lending standards appear to have been looser than those of Hawaii peers, and it appears to have more frequently made poor lending choices . . .

On July 26, Pacific Century stock dropped to its lowest split-adjusted level in five years. It set another 5-year low on July 27, and Monday’s low price, $13.56 per share, was the lowest since 3/10/95. . . .

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From The Honolulu Advertiser, 8/22/00: Pacific Century Chief Quits . . . Lawrence Johnson, chairman and chief executive of one of Hawai’i’s largest and most storied companies, announced yesterday he is stepping down amid mounting pressure from shareholders.

The announcement by Johnson, 60, the long-serving chief executive of Pacific Century Financial Corp, the parent of Bank of Hawai’i, comes in the wake of stunning losses from risky loans earlier this year and a stock price falling to five-year lows. . . .

Bank of Honolulu - From Pacific Business News, 3/8/99:

FDIC warns Bank of Honolulu — The Federal Deposit Insurance Corp. has told Bank of Honolulu to clean up its management and cease violations of federal banking laws, or it may face closure. . . .

The action stems from an FDIC inspection in November that found “hazardous” lending procedures and “lax” collection practices. . . .

The inspection came after former chairman Sukarman Sia was charged with writing $8 million in bad checks to Las Vegas hotels and casinos. . . .

See in Part I: Sukarman Sia

Bank of New York - On 09/22/99, James A. Leach, Chairman of the U.S. House of Representatives’ Committee of Banking and Financial Services issued this Press Release at the conclusion of the first two days of money laundering hearings concerning the Bank of New York:

The meaning of today’s testimony is than money-laundering has gone to the tome of the Russian political structure with the confirmation that President Yeltsin’s son-in-law is the beneficiary of two accounts in the Cayman Island’s branch of a reputable New York bank. . . .

Second, the Bank of New York confirmed $7.5 billion in questionable money flowed through eight accounts controlled by one figure over a three-year period. . . .

Third, the CEO of the Bank of New York acknowledged that his bank has correspondent relationships with 160 Russian banks and that on an average day $3.5 billion flows through those accounts. This figure is particularly noteworthy given prior testimony before the Committee that many Russian banks are mob-influenced and serve more as money-laundering platforms than providers of traditional banking services.

For more, GO TO > > > Behind the blinds at The Bank of New York

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From the 02/17/00 on-line edition of The New York Times:

. . A former executive of the Bank of New York and her husband told a federal judge yesterday that they helped a group of small but politically connected Russian banks create an elaborate money laundering scheme that moved billions of dollars out of Russia through the American bank. . . .

After more than 18 months of investigation, federal authorities delivered Lucy Edwards, a former Bank of New York vice president, and her husband, Peter Berlin, to the U.S. District in Manhattan. They described how between 1996 and last year, more than $7 billion left Russia illegally and flowed through a network of front company accounts at the Bank of New York that were controlled by Mr. Berlin. From there, the money was transferred to offshore accounts.

The network, according to the couple, was designed by Russian bankers to whisk money electronically between Russia and the United States for three broad purposes: to evade Russian taxes on money from legitimate business transactions, to avoid Russian customs duties on imports, and to “wash” the profits of outright criminal enterprises through legitimate banks, including a $300,000 ransom payment in 1998 to the kidnappers of a businessman in Russia.

The couple, who said they were paid nearly $2 million for their services, said the scheme allowed Russian bankers to conduct illegal banking activities in the U.S. that circumvented the scrutiny of federal banking regulators and law enforcement officials. . . .

The couple agreed to plead guilty to a series of federal crimes, which carry sentences of up to 10 years in prison and heavy fines, and to cooperate with investigators in a plea bargain that federal authorities hope will produce more charges. . . .

* * *

“More than one or two people had to turn the other way,” an investigator said, “You don’t transfer $7 billion through the spanking new Eastern European division without somebody knowing.” . . .

* * *

Ms. Edwards, Mr. Berlin and three companies controlled by Mr. Berlin — Benex, Bec International and Lowland — pleaded guilty to laundering money to promote criminal activity and defraud the Russian Government; conducting unlicensed banking operations; establishing an unauthorized branch of a foreign bank; operating an illegal money transmitting business; bribing a bank employee; receiving illegal payments as a bank employee and laundering those payments abroad; tax evasion; and fraudulently obtaining visas for hundreds of Russians to enter the United States. . . .

* * *

Ms. Edwards ... said she was first approached in late 1995 by representatives of DKB, a Russian bank whose full name is Depozitarno-Kliringovy Bank, who were interested in using the Bank of New York’s offices and technology to illegally move money out of Russia. During the following years, Ms. Edwards said, those activities came to include money laundering and the other schemes to which she pleaded guilty. . . .

Russian banking during the 1990's has been a notoriously freewheeling affair, with allegations of extensive involvement in the banks by organized criminals.

Ms. Edwards noted in her testimony that DKB’s Moscow employees told her in 1998 that they were afraid to leave the bank’s headquarters because “customers with machine guns were waiting for them.” . . .

For more GO TO > > > The Donkeys Nests

Bank of Nova Scotia - See: Canadian Institute for International Affairs.

Banker’s Trust - From Corporate Crime Reporter, 3/15/99:

. . . Bankers Trust was fined $60 million for its role in a scheme by high-ranking bank officials to enhance the bank’s financial performance by falsely recording approximately $19.1 million unlawfully recorded as the bank’s income and reserves to their rightful owners.

Bankers Trust’s plan to return the remaining balance of the $19.1 million will be supervised by the Federal Reserve Bank of New York. Three Bankers Trust executives were indicted in the case. . . .

“Bankers Trust’s guilty plea should send a strong signal to all companies that negative consequences will flow from putting pressure on their executives and employees to generate revenues and meet expense targets with any means necessary,” said U.S. Attorney Mary Jo White.

“While a corporation, especially a financial institution — naturally expresses concern and interest in the bottom line, it must at the same time ensure that it fosters a corporate culture requiring strict compliance with all applicable legal and ethical obligations.”

Barclay’s Bank - Barclays PLC is a UK-based financial services group engaged primarily in banking and investment banking businesses.

From Conspirators’ Hierarchy: . . . Banks large and small in the thousands are in the Committee of 300 network, including ... Barclays Bank . . .

Eagle Star is more than a major “front” for MI6, it is also a Front for major British banks, including Hill-Samuels, N.M. Rothschild and Sons (one of the gold price “fixers”who meet daily in London), and Barclays Bank (one of the funders of the African National Congress - ANC).

* * *

From The Laundrymen: . . .

BRINKS-MAT MELTDOWN. Shortly before dawn on Saturday morning, Nov 26, 1983, armed hoodlums broke into the heavily fortressed Brinks-Mat warehouse at Unit 7 of the International Trading Estate. . . .

With great expertise, they neutralized the guards ... Then, with gruesome brutality, they terrorized the guards— pistol whipping them, pouring gasoline over them, and holding lit matches close enough to make them believe they were going to be torched.

The gang threatened carnage unless the guards barked out the combinations for the locks that would open the underground vaults.

One hour and forty-five minutes later, the gang was gone. With them went 6,500 gold bars. Three and a half tons worth.

The price of gold on the London market had closed the night before at about $357 an ounce, valuing the booty at just under $40 million. The following morning, when word of the size of the haul got out, gold prices jumped $18, giving the thieves an additional paper profit of $2 million.

Although Scotland Yard never established whether there were six men in the gang or eight, it arrested four of them within two weeks.

A year later, three of those four were in jail. One was Mickey McAvoy, a 38-year-old professional thug ... Another was 41-year-old Brian Robinson, a professional criminal ... As the reputed masterminds, and for the depth of their barbarity, they were both sent away for 25 years.

The only thing they had to look forward to was the gold.

A year after the largest heist in British history, the police still hadn’t found a single ounce.

* * *

Brian Perry ran a minicab agency in east London . . . John Lloyd ... lived with an archetypal gangster’s moll— a woman named Jeannie Savage . . . They were the ones McAvoy trusted to make sure his share would be waiting for him when he got out.

To help, Perry and Lloyd brought in a crony of theirs called Kenneth Noye . . . most of the time he dealt in watches and jewelry, and, unlike Perry and Lloyd, did have a record— for receiving stolen goods, shoplifting, assaulting a police officer, and gun licensing violations.

One of his pals was John Palmer, a 34-year old jeweler who some years before set up a gold bullion dealership in Bristol called Scadlynn Ltd. Noye brought Palmer in to use Scadlynn.

Now [Noye] began transporting McAvoy’s gold to Scadlynn— taking exactly eleven resmelted bars per journey . . .

Scadlynn, meanwhile, sold the resmelted gold at the going scrap rate, plus a valued-added tax (VAT), which stood at 15%. For its trouble, it would keep the undeclared VAT. The money from the scrap was deposited at a local branch of Barclays Bank, then withdrawn as cash, stuffed into black garbage bags, and trucked to London. Over the next five months, Scadlynn paid Noye, Perry, and Lloyd in excess of $15 million.

Using a false passport bearing the name Sydney Harris, Noye deposited his share at a Bank of Ireland office in south London, where it was wired immediately to a Dublin branch. McAvoy’s girlfriend, Kathy Meacock, did the same thing on alternate days. So did Jeannie Savage.

If anyone at Barclays or the Bank of Ireland was in the least suspicious, they apparently weren’t troubled enough to tell the police about it.

* * *

Brian Perry also had a buddy named Gordon John Parry . . . Parry in turn brought in Michael Relton, a crooked lawyer who’d defended him on a drug trafficking charge. . . .

With Relton’s help, Parry deposited $1,190,250 from Scadlynn into a Bank of Ireland branch in southwest London. The money was then wired offshore to the bank’s office in Douglas, on the Isle of Man. Next, Parry convinced his wife’s cousin to help, and she used the bank to send $750,000 to the Isle of Man.

Other deposits followed, bringing the total washed through that branch to $2.25 million. To confuse anyone who might attempt to follow the paper trail, Parry brought some of the money back from the Isle of Man, redeposited it, and sent it offshore to yet another bank. And all this time, Noye continued to deliver gold to Scadlynn— eleven bars per journey— while Scadlynn kept melting it down, selling it as scrap, and sending cash to London.

* * *

In early August 1984, Relton helped Parry open an account at the Hong Kong and Shanghai Bank in Zurich. Although they later claimed it was nothing more than coincidence, each of them opened accounts at the same branch of the Hong Kong and Shanghai Bank. Between them, they deposited a total of $735,000, bringing their Zurich holdings to just under $1.5 million.

* * *

Scadlynn was proving to be a cash cow beyond anyone’s wildest imagination. It got to the point where they were moving so much money that Barclays had to bring in extra tellers just to deal with Scadlynn’s business. . . .

* * *

Tipped off by the Jersey police, Scotland Yard put Noye under surveillance. After observing him in the frequent company of Brian Reader— a wanted criminal whom they’d believed had been hiding in Spain— they brought in C-11, a specialist unit used exclusively for top-secret, close-target reconnaissance.

On a cold and dark Saturday evening in Jan 1985, two officers scaled the perimeter wall of Noye’s house and positioned themselves to spend the night on the grounds. One of those officers was John Fordham, a nine-year veteran of C-11. One of Noye’s rottweillers discovered Fordham. Two more dogs joined the commotion. That’s when Noye arrived, possibly with Reader, carrying a four-inch knife.

Fordham’s body was recovered with eleven stab wounds, mostly in his back.

Noye was immediately arrested, Reader was picked up a few miles away, and the two were charged with murder. Noye pleaded self-defense. Reader claimed he wasn’t involved at all. To the utter astonishment of the police, ten months later a jury acquitted both of them.

However, a small cache of gold bars was found at Noye’s house— enough to link them with the Brinks-Mat gold. Noye and Reader were charged with conspiracy to handle stolen goods. Within three days, the police also arrested Palmer and moved in on Scadlynn. . . .

* * *

[Some catcalls: And where did the money go from Barclays Bank? Of course only royalty and Robert Rubin may really know, but — Barclays Bank is the 4^th largest institutional investor in Goldman Sachs; the 4^th largest in Marsh & McLennan; the 6^th in Chubb Group; the 2^nd in Citigroup; the 6^th in Lockheed Martin; the 4^th in Raytheon Company; the 5^th in Columbia/HCA; the 2^nd in Merrill Lynch; the 4^th in Riscorp, Inc.; the 3^rd in Conseco, Inc.; the 6^th in Trump Hotel/ Casino; the 7^th in Mirage Resorts, Inc.; the 5^th in Boyd Gaming Corp.; the 6^th in Harrah’s Enterprises; the 2^nd in Bank of America; the 4^th in American Express; the 3^rd in CBS Corp; the 2^nd in America Online, Inc; the 4^th in Time Warner, Inc.; the 5^th in Wilmington Trust; the 3^rd in PNC Bank; the 3^rd in Allstate Insurance; the 2^nd in American International Group (AIG); the 4^th in Xerox Corp; and the #1 institutional investor in The Walt Disney Company — just to name a few possibilities.]

* * *

The sixth largest institutional investor in Barclays is Citigroup, Inc. The tenth largest is Bank of America.

Beatrice Foods - See Bishop Estate; Goldman Sachs; Watermark Communities.

Bedford Property Investors, Inc. - From a Bedford Properties press release: Bedford Property Investors, Inc. announced the appointment of Scott R. Whitney as Sr. V.P. and CFO.

Whitney, 45, has been serving as Sr. VP/CFO of WCI Communities of Naples, Florida since 1995. Before joining WCI Communities, Whitney was with Equity Group Investments, Inc. Prior to joining Equity Group Investments, Whitney worked with Balcor/American Express, Inc. as V.P. Banking and Sr. Controller.

Bilderberg - From the website: Bilderberg - Corporate Europe’s Power Elite:

. . . Bilderberg is a lobbying organisation that attempts to present plans for globalisation of world markets as a consensus and invites powerful guests along in an attempt to get them “on board” the project. Bilderberg is not a conspiracy in itself, but the attempt to keep its deliberations out of the public eye is. . . .

Bishop Estate - The bizarre story of the looting of this historic estate is too monumental to fully explore here.

For more, GO TO > > > Broken Trust: The Book; Dirty Money, Dirty Politics & Bishop Estate

For news archives, GO TO The Honolulu Star Bulletin

California Public Employees’ Retirement System (CalPERS) - The nation’s largest public pension fund with over $175 BILLION in trust assets. (Compare that to approximately $6 billion in assets for the nation’s wealthiest charitable trust, Bishop Estate.)

See in Part I: George W. Bush, Jr.

Canadian Institute for International Affairs - From Conspirators’ Hierarchy: . . . Like its American counterpart, the Canadian Institute of International Affairs is a child of the Royal Institute for International Affairs (RIIA) and runs Canadian politics. Its members have filled the position of Secretary of State ever since it was founded in 1925. The Institute for Pacific Relations, the body that fostered the attack on Pearl Harbor, was welcomed in Canada after Owen Lattimore and his fellow members had their treasonous activities exposed in 1947 and left the United States before they could be charged. . . .

The Canadian Institute for International Affairs is connected with the Rank Organization through Sir Kenneth Strong, who was second in charge of MI6 at the end of the Second World War. As a member of the Order of St. John of Jerusalem, Strong is the number two man in Canada for Rank and the British Crown’s commercial interests. He is on the board of one of the most prolific drug banks in the world after the Hong Kong and Shanghai Bank -- the Bank of Nova Scotia, through which proceeds of the Canadian heroin trade are handled. . . .

At the top of British Crown control of Canada was Walter Gordon. A former member of the Queen’s hands-on oversight committee, also known as the Privy Council, Gordon sponsored the Institute for Pacific Relations via the Canadian Institute of International Affairs. As a former minister of finance, Gordon was able to place Committee of 300 selected accountants and lawyers inside the three main chartered banks: the Bank of Nova Scotia, the Canadian Imperial Bank and the Toronto Dominion Bank. . . .

Through these three “Crown banks” a network of Committee of 300 agents responsible to Gordon oversaw the world’s second largest dirty drug money laundering operation, with a direct open door to China.

Before his death, Gordon controlled James Endicott, Chester Ronning and Paul Linn, identified by MI6 as Canada’s top “China Specialists.” All three men worked closely with Chou-En-lai, who once told Gamal Abdul Nasser that he would do to Britain and the USA what they had done to China, i.e., turn them into a nation of heroin addicts.

Chou-En-lai made good on his promise, starting with American GI’s in Vietnam....

For more, GO TO > > > Air America; The Secret Nests: The CIA; Songs of the Drug Vultures

Carlyle Group - a Washington-based merchant bank that is chaired by Frank Carlucci, the former Secretary of Defense in the Reagan Administration.

Among Carlyle’s partners are numerous former Reagan and Bush administration notables, including Richard Darman, economic adviser to President Bush, and James Baker III, the former White House Chief of Staff, Secretary of State, and Bush-Quayle campaign chairman.

* * *

For more GO TO > > > A Flock of Elephants; The Elephant Nests

For news archives, GO TO: CT Now

Central Pacific Bank - A Hawaii bank controlled, until recently, by Japan’s Sumitomo Bank.

From Pacific Business News, October 13, 1997: Central Pacific Bank is leading a group of 10 Taiwanese bankers to provide an $85 million construction loan for a Nauru Tower sister project. . . . This is the first substantial loan involving a Taiwan consortium and the largest since the Japanese-investment craze ended earlier this decade. . . .

The loan is for Nauru Phosphate Royalties Development (Honolulu) Inc.’s construction of Hawa’iki Tower residential condominium near Ala Moana Center. . . .

Central Pacific Bank, the fourth-largest bank in Hawaii with $1.4 billion in assets, is the co-lead lender for the loan. The other co-lead lender is International Commercial Bank of China.

A second Hawaii organization, Hawaii Carpenter’s Financial Security Fund, and a Mainland investor, The Union Labor Life Insurance Co., are also part of the loan agreement.

Central Pacific Bank was introduced about a year ago to the Taiwanese bankers through an ally, Mellon Mortgage Co. of California, a firm with $14 billion in assets and relationships with lenders worldwide . . .

Nauru Trust was created in 1968 to administer certain trust funds for the citizens of the Republic of Nauru, a small phosphate-rich South Pacific island. The funds placed in the trust are primarily from a portion of the royalties payable to the republic for phosphate mining on the island. . .

For more, GO TO > > > Behind the Blinds at Central Pacific Bank

China Resources Enterprise - From The Progressive Review: Clinton Scandal Clips Part 15 -- Four of Panama’s ports are controlled by a company partially owned by Hutchinson-Whampoa Ltd., which in turn is owned by Li Ka-Shing, a billionaire so close to the Chinese power structure that he was offered the governorship of Hong Kong.

Another owner of the Panamanian ports is China Resources Enterprise, which has been called an “agent of espionage” by Senator Fred Thompson.

CRE is also a partner of the Lippo Group, owned by the Riady family that has played a central if mysterious role in the rise of William Clinton. According to congressional testimony by ex-JCS chief Admiral Thomas Moorer, Hutchinson-Whampoa has the right to pilot all ships through the Panama Canal, including US Naval vessels.

Chubb Corporation - Chubb is a holding company whose subsidiaries are engaged in two industries: property & casualty insurance and real estate.

The second largest institutional investor in Chubb is Putnam Investment Management, a subsidiary of the world’s largest insurance broker, MMarsh & McLennan.

The third largest institutional investor in Chubb is Citigroup, which was formed through the mega-merger of Citicorp and Travelers Insurance Company.

Citigroup is co-headed by Robert Ruben, the former U.S. Treasury Secretary and former co-chairman of Goldman Sachs. A leading institutional owner of Goldman Sachs is Hawaii’s wealthy Bishop Estate.

The broker for Bishop Estate is Marsh & McLennan. Marsh & McLennan placed the estate’s Directors & Officers Liability insurance policy in Federal Insurance Company, a Chubb subsidiary.

Federal Insurance Company provided the excess liability insurance policy for Bill Clinton that defended him in the Paula Jones lawsuit.

Just one big happy flock.

* * *

From the RICO lawsuit: Harmon v. Federal Insurance Co, et al.:

Defendant Federal Insurance Company, Inc. (Federal), a member of The Chubb Group, conducts business in the United States and was, at all times, registered with the Insurance Commissioner, State of Hawaii, as an admitted foreign insurance company. Federal conducts business through insurance brokers as well as through licensed general agents of the company. In Hawaii, one of Federal’s licensed general agents is Marsh & McLennan, Inc. (M&M).

On or about October 27, 1995, Plaintiff, in his capacity as Risk/Insurance & Safety Manager for Kamehameha Schools Bishop Estate (KSBE), caused Federal, through its agent M&M, to bind coverages under an Association Liability Insurance policy. . . .

Plaintiff alleges that the failure of Federal, and its agent, M&M, to provide defense coverage to Harmon in Civil No. 97-0512-02 constitutes mail fraud, wire fraud, misrepresentation and fraudulent inducement to purchase this insurance. . . .

As detailed in Plaintiff’s complaint, there was collusion among the Defendants, the primary purpose of which was to increase their profits through the awarding of non-bid insurance contracts to Federal and its agent, M&M.

Profits were further enhanced by Federal through reduction in their claims payments by means of fraudulently “back-dating” an exclusion endorsement in their Association Liability Policy in order to wrongfully deny defense coverages to Plaintiff . . .

* * *

For full RICO Case Statement, GO TO > > > RICO Lawsuit - Harmon v. Federal Insurance

* * *

NOTE > > > On Sep 21, 2000, a settlement agreement in the Bishop Estate case was filed in Hawaii Probate Court, with Federal Insurance Company agreeing to pay $20.1 million to the estate, up to $4 million for the ex-trustees legal fees, and $1.3 million to the Hawaii Attorney General’s Office to cover costs it incurred in the suit against the ex-trustees.

* * *

For more GO TO > > > The Chubb Group; Confessions of a Whistleblower; RICO in Paradise

CITIC/CITIFOR - China International Trade and Investment Company owns 37 companies including CITIC Hong Kong (Holdings) Ltd., the Ka Wah Bank, Ltd in Hong Kong and those in the U.S., Canada, Australia and Germany. CITIC has also opened its representative offices in Tokyo, New York and Frankfurt.

CITIFOR Inc is CITIC’s wholly-owned Canadian sister company, located in Seattle, WA. Founded in 1984, CITIFOR’s business is primarily concentrated in the timber industry with investments in timber and timberlands in Washington, Oregon, Alaska, Chile and Russia.

The head of CITIC Hong Kong is Larry Yung, the son of China’s vice-president.

* * *

For more, GO TO > > > A Flock of Donkeys; The Donkey Nests

Citigroup - From Conspiracy Newsline, 11/3/97:

Federal Reserve Bank of New York Melted Down,
Reissued NAZI GOLD

The Federal Reserve Bank of New York melted down $23 million worth of Nazi gold bars in the 1950s, replacing the swastika with a U.S. seal on the reissued bars. The New York Times cited recently-released Federal Reserve memos which indicated that the U.S. Treasury knew that the Nazis had looted the bars from Belgium and the Netherlands.

The gold was sold on the world markets by the Swiss National Bank during World War II. According to the Times, the Fed melted down the bars after the National City Bank (now known as Citibank) urged that they be reissued and used as collateral to help Spain purchase a new phone system from ITT....

The documents did not indicate whether the Treasury or the Federal Reserve knew or suspected that the gold had come from Holocaust victims. But a federal report issued this year concluded that jewelry and gold fillings taken from concentration camp victims were melted together with gold the Nazis took from the central banks of Europe.

A Citicorp spokesman defended Citibank’s actions by explaining, “this all happened in an era when there wasn’t as much introspection about this kind of transaction.”

* * *In March, 1998, Citicorp and Travelers Group pioneered the merger of the banking and insurance industries with the announcement of a $74 billion merger that ranks as the largest transaction in the history of the financial services industry.

At the time of the merger, Citicorp was the second-largest bank in the U.S. with assets of almost $311 billion and more than 3,200 offices in 100 countries. Travelers, after completing the acquisition of Salomon Inc. (Salomon Smith Barney) was the largest U.S.-based insurance company with $387 billion in assets at year-end 1997. Combined assets of Citigroup total nearly $700 billion!

Wall Street loved the deal! The merger announcement propelled the DJIA above 9,000 in April 1998. Travelers closed up about 18% at $73, while Citicorp shares stormed up almost 27% to $182 upon announcement of the news.

Afterwards, however, both stocks went south, with Citicorp reaching a low of around $83 and Travelers dropping to $37 in Sept, 1998 — around the time the merger was formally approved. The first week of Oct, 1998 saw the new Citigroup stock drop to around $33.

In the merger arrangement, Citicorp merged with Travelers, and Travelers applied to the Fed for permission to become a bank holding company. Under regulations in effect at the time of the merger, Citigroup would be allowed to continue in its existing lines of business for only two years, after which it could apply for three one-year extensions — at which point Citigroup would be restricted from the insurance underwriting business.

For more, GO TO > > > Citigroup: Vampires in the City; Transylvania Travelers in St. Paul; A Flock of Donkeys; The Donkey Nests; Broken Trust; CITIGROUP: The Mating Dance of Dinosaurs; Citibank Investigation; Concerns About Proposed Citicorp/Travelers Merger; Why the Merger of Travelers Group and Citicorp Should NOT BE APPROVED!; Federal Reserve Rubber Stamps Citicorp Merger; Citigroup Pays Execs Big

Coca-Cola Co. - From AFL-CIO Executive Pay Watch:

. . . In the wake of sagging profits and a European health scare that forced Coke into the biggest product recall in its history, [CEO Douglas] Ivester recently announced 6,000 layoffs, including 2,700 workers outside the U.S. The company downsized an astonishing 40% of its Atlanta headquarters staff alone. . . .

Coke faces a lawsuit alleging that the company discriminated against African American employees in promotions, pay and performance evaluations. Black employees were asked to waive their rights to sue the company in exchange for enhanced severance benefits. After a benefit’s manager in Coke’s human resources department complained on behalf of black workers, he was fired....

See in Part I: Douglas Ivester

Columbia/HCA - Columbia/HCA, together with its subsidiaries, operates hospitals and related health care entities. As of 6/99, they operated 204 hospitals and 81 outpatient surgery centers.

From the internet posting Columbia/HCA; Corporate Imbalance Sheet:

Columbia/HCA - Wall Street Health Care

● $216,000 - Amount of PAC money Columbia/HCA’s Good Government Fund contributed in Florida in 1994, making it Florida’s largest PAC

● 24 - Columbia/HCA lobbyists employed to repeal 1992 Florida state legislation requiring the corporation to disclose its physician-investors.

● 6 - Number of lobbyists Columbia/HCA shares with the tobacco industry in three southern states.

● $19.9 billion - Revenue in 1996.

● 18 - Hospitals closed since 1994

● 2,000 - Layoffs and positions eliminated since 1995.

● $70,000 - Total fines paid for two separate patient “dumping” violations in Florida, including one for $55,000 (the highest penalty ever paid by a hospital).

● $19 million - Money that would go into pockets of Blue Cross/Blue Shield of Ohio’s board members and an outside council, if Columbia/HCA deal goes through.

● $116 million - Tax breaks over 10 years for Columbia/HCA to move its headquarters from Kentucky to Tennessee.

● $30,000 - Amount Florida Senator Genny Brown-Waite received as a consultant to Columbia/HCA while serving on the Senate Health Care Committee.

● 30% - Hospitals in Florida owned by Columbia/HCA.

● 4 - Attorneys General who have sued to block deals involving Columbia/HCA.

● $25,000 - Fine for failing to have enough nurses on duty to ensure patient safety at Columbia Women’s Hospital in Indianapolis.

● $3.5 billion - Amount Columbia/HCA has said it is prepared to spend to set up a network in the Northeast.

● 3 - Days notice Columbia/HCA gave town Destin, Florida before it closed the hospital in 1994.

● $1.1 billion - Net worth of Columbia/HCA Vice-Chair Thomas Frist, who made the Forbes 400 list of richest Americans.

● $13.9 million - Columbia/HCA stock held in 1995 by US Senator Bill Frist (TN), brother of Thomas Frist.

● 20% - Profit goal per hospital.

● $40 million - Estimated cost of Columbia/HCA’s recent ad campaign to build its image as a national brand name.

● $87 million - Amount of taxes Columbia/HCA owed in partial settlement with the IRS.

● $600 million - Amount of taxes IRS says Columbia/HCA still owes.

* * *

From the FBI, Salt Lake City web posting: Crime in a White-Collar World — . . . Recently, the Salt Lake City Division spearheaded the investigation of the Columbia HCA network of hospitals and healthcare providers. As a result of this operation, many key players, including a few high-level officials of Columbia, are under federal indictment for Medicare fraud.

* * *

From BLB&G Columbia/HCA web posting: . . . Bernstein Litowitz Berger & Grossmann LLP, acting for the benefit of the New York State Common Retirement Fund and the California Public Employees’ Retirement System (CalPERS) and 10 other institutional investors and individual plaintiffs, filed this derivative action on behalf of Columbia/HCA Healthcare Corp against members of the Columbia Board of Directors and former senior executives of the Company.

This derivative action seeks to hold the defendants responsible for subjecting Columbia to the largest health care fraud investigation in history, extensive nationwide litigation and potential massive fines and penalties. . . .

On March 19, 1997, officials from the FBI, IRS, and HHS executed search warrants on Columbia’s offices in El Paso, Texas, as part of a long-term, on-going investigation into allegations of potential health care fraud. A fourth federal agency, the DOD’s Criminal Investigation Service later joined in the investigation.

The federal investigations uncovered illegal billing practices, illegal referrals, and illegal acquisition practices. By the middle of the summer the agents raided 35 additional facilities in six more states: Tennessee, Florida, Utah, Oklahoma, Georgia and North Carolina . . .

In late July, 1997, a federal grand jury in Florida indicted three Columbia executives, two from Florida and one from the corporate office in Tennessee, on five counts including charging the executives with conspiracy to defraud the government by falsifying cost reports used for reimbursements by Medicare and Champus. . . .

In addition to Columbia’s systematic violations of the SSA, the HIPPA, the FCA, the antitrust laws, as well as other federal and state laws, the complaint alleges that certain of Columbia’s senior level officials sold their shares of Columbia’s stock to the unsuspecting public with full knowledge that public disclosure of the investigations would have adverse consequences to Columbia’s publicly traded stock prices. . . .

* * *

On 08/14/97, CNNfn reported: For Columbia/HCA Healthcare Corp., things are going from bad to worse: This time, the new chief executive and six other officials stand accused of illegal insider trading. . . .

A lawsuit filed late Wednesday by New York State Comptroller Carl McCall accuses newly named chairman Thomas Frist of selling 3.7 million shares of Columbia stock in 1996 and 1997 for $138 million. McCall filed the suit on behalf of the New York State Retirement Fund, which owns 2.4 million shares of Columbia stock. . . .

* * *

Before Columbia and HCA merged, George W. Bush supporter Richard Rainwater put in about $125,000 in Columbia and $15 million in HCA.

On 11/17/97 the Columbia/HCA board approved an internal operating reorganization plan and Goldman Sachs assisted the company in its evaluation of restructuring alternatives. Hawaii’s giant charitable trust, Bishop Estate, became a major investor in Columbia/HCA.

* * *

From: Nurse Week/Health Week 05/10/99:

...Fraud trial begins for four Columbia/HCA executives: Several years after its investigation started, the government is trying four executives of Columbia/HCA Healthcare Corp on charges they filed false healthcare claims in an attempt to cheat the government out of $2.8 million. . . .

The case, being heard in a Tampa, Fla., federal court, is the first to reach trial in the FBI’s largest healthcare investigation ever. . .

This trial is part of a larger fraud case against Columbia. That investigation has led to raids on Columbia facilities in several states and a management shakeup. The company also is facing a number of lawsuits, including seven whistle-blower fraud suits. . .

* * *

On 5/18/00, Columbia/HCA announced that it has reached a tentative agreement to pay the federal government $745 million to settle a billing fraud investigation involving Medicare and other federal programs. The civil settlement with the Justice Dept, which still needs to be approved by several other federal agencies, is far less than the $1 billion analysts had expected.

* * *

[A Catbird Musing: Remember Clinton’s earlier failed Health Care initiatives? Well, beware my chicks, the lame duck (and a future sitting duck, if Al Gore is elected) are back pushing new legislation. Better to build the wealth of the HMO’s and insurance companies with???]

* * *

MUST SEE > > > Michael Moore’s movie “SiCKO”