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 also: AOL; Bishop Estate; Citigroup; Enron; Goldman Sachs; Miller & Chevalier; The Lobbyists
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. . . .
See also: Committee of 300; Prudential 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: Xerox Corp
For more, GO TO > > > American Express
American Financial Group — From The Buying of the President: . . . Finally, we come to the No. 3 soft-money patron of the Republican party in the 1990s.
What would it take to get the U.S. government to go to bat for your company before an international trade organization even if there were virtually no American jobs at stake? Only about $4.5 million and some friends in high places.
Don’t believe us? Ask Carl Lindner, the founder of American Financial Group, Inc., a holding company specializing in insurance that in 1998 posted more than $4 billion in revenue. Lindner’s company and family have been among the biggest political donors ever, giving more than $1 million in soft money to the Democratic party and nearly $3.5 million to the Republican Party from 1991 through June 1999. . . .
Lindner’s biggest coup came in May 1999, when the World Trade Organization ruled in favor of the United States and several Latin American countries that had brought a complaint against the European Union for unfair tariffs on bananas.
In mid-1993, when the European Union imposed a tariff on bananas not coming from former European colonies in the Caribbean, Lindner’s Latin American-based Chiquita felt the crunch. He immediately turned to the U.S. government for help, even though 39,000 of Chiquita’s 45,000 employees are in Latin America.
Linder met with then-U.S. Trade Representative Michael Kantor on Jan 13, 1994 to discuss the issue ... In August 1994, Dole and 11 other Senators urged Kantor to intervene and on Nov 17 Dole, Gingrich, and House Democratic Leader Richard Gephardt wrote to the President asking for similar assistance. . . .
By April 1996, Kantor announced that he would bring the U.S.— that is, Lindner’s — case before the World Trade Organization. In May 1999, the WTO awarded the United States more than $190 million in punitive tariffs based on European violations of free-trade principles.
Lindner’s money had bought him access, and the access had bought him action. . . .
For more GO TO > > > The Elephant Nests, The Donkey Nests
See also: The Democratic Party; The Republican Party; World Trade Organization.
American International Group - From The Washington Weekly, Mar. 17, 1997:
THE BARBADOS CONNECTION -- CORAL REINSURANCE: . . . The link between the Arkansas Development Finance Authority (ADFA) and AIG goes beyond $5 million. An AIG affiliate has managed over one billion dollars worth of ADFA’s bonds, according to the Arkansas Democrat Gazette. An allegation that ADFA launders money for U.S. intelligence has repeatedly surfaced but without any direct documentary evidence to date . . . .
Apart from ADFA, where does AIG get its money to fund, among other things, lobbying on behalf of the Chinese government? The answer is not clear, though some indications are available. (1) In 1995, AIG became the first company to be licensed to sell insurance in China. (2) AIG is a client of Kissinger & Associates.
It was Henry Kissinger, the former Secretary of State, who advised against harsh sanctions after the Tienanmen Square massacre. . . . (3) AIG has also been the focus of SEC and BCCI investigator, Manhattan DA Robert Morgenthau’s attention . . . to explore its ties to the BCCI. (4) And finally, AIG is headed by Maurice Greenberg, one-time chairman of the NY Federal Reserve Bank, and in 1995 a candidate to head the CIA.
Greenberg is chairman of the US-China Business Council and lobbied hard (and successfully) for the Clinton administration to sever the link between China’s human rights record and renewal of China’s Most-Favored-Nation trade status.* * *
Whatever AIG is, it appears to be tied into that big, bipartisan, ugly network of intelligence, money laundering, Arkansas, and Communist China.
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On Feb 10, 2000, American International Group reported that its net income for 1999 increased 18.1% to $5.06 billion. AIG Chairman M.R. Greenberg reported, among other things, that during 1999: “... we opened our new life and general insurance branch office in Shenzhen, China, marking the fourth Chinese metropolitan area where AIG has established wholly-owned, full-service insurance operations.”
“During the fourth quarter, we also entered into an agreement to purchase a 70 percent equity interest in a subsidiary of LIPPO LIFE, Indonesia’s leading life insurance company. The new joint venture, renamed AIG Lippo Life, is the largest life company in Indonesia, marketing life, pension and health products through a multi-channel distribution network. . . .”
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[A Catbird Musing: Now, where have we heard that name LIPPO before? Oh, yeah, wasn’t that the Indonesian/Chinese bunch connected with the 1996 Clinton-Gore campaign scandals? Hmmmm! . . . ]
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For Catbird Connections - GO TO >>> Dirty Gold in Goldman Sachs?
See also: Arkansas Development and Finance Authority; Bishop Estate; CitiGroup; Coral Reinsurance; Dixie Mafia; Fuji Bank; Goldman Sachs; Lasater & Company; Lippo Group; Panin Group; Marsh & McLennan; Pacific Islands; Sanwa Bank; Sumitomo Bank
See in Part I: Dan Lasater; Henry Kissinger; Maurice R. Greenberg; Jeffrey W. Greenberg; William Clinton; Hillary Clinton; Robert Rubin; Sukamto Sia; William Simon.
Apollo Advisers - Financial investment managers. 13th largest campaign contributor to Senator Joseph Lieberman (D-CT), Al Gore’s new vice presidential running mate, and a client of lobbying firm Akin, Gump, Strauss, Hauer & Feld.
One of Akin, Gump’s clients is Miller & Chavalier, a Washington, D.C.-based law firm which, together with PricewaterhouseCoopers, drafted the IRS settlement agreement for Hawaii’s Kamehameha Schools.
Apollo Advisers has another connection with Kamehameha Schools: Along with National Housing Corp (which was involved in an alleged kick-back scheme with ousted Bishop Estate trustees Henry Peters and Richard Wong), Apollo has financial interests in several estate owned properties involving two alleged Yakuza-connected companies — Azabu Building Company and Mitsui Trust.
For more GO TO > > > The Elephant Nests
See also: Apollo; Akin, Gump; Azabu Building Company; Bishop Estate; Goldman Sachs; Ko Olina; Miller & Chevalier; Mitsui Trust; National Housing; The Democratic Party; The Lobbyists; Yakuza
Archer-Daniels-Midland - From The Buying of the President (1996):
In 1988, 249 individuals each gave at least $100,000, achieving a total of $25 million, to help elect George Bush president. By giving that much, they became members of “Team 100" and not only had personal access to Bush and other members of the Bush administration, but many of them — from real estate and construction to finance, from manufacturing to agribusiness to oil and gas interests — received special favors during the Bush presidency. . . .
The many quid pro quo relationships have been well documented by Common Cause magazine and others. The two largest donors were Archer-Daniels-Midland (ADM) and its chairman, Dwayne Andreas, who gave $1,072,000 and Atlantic Richfield (Arco) and its chairman, Lodwrick Cook, who contributed $862,360. Both companies made or saved hundreds of millions of dollars from their well-placed Washington investments. . . .
Archer Daniels Midland touts itself as the “supermarket to the world.” This behemoth, based in Decatur, Illinois, has its fingers in nearly every agribusiness pie. . . . Its net sales in fiscal year 1994 exceeded $11 billion and its profits topped $1 billion. . . .
The company battled with a spate of bad publicity in the summer of 1995, when the Justice Department, using an ADM informant, made public its undercover investigation into allegations of price-fixing for sweeteners and food additives. . . .
Andreas and ADM, playing it safe, are among the largest contributors to both parties in national political campaigns . . .
In 1994, ADM alone gave approximately $2.5 million to various congressional candidates. . . .
Andreas has befriended virtually every president since Nixon. His generosity to all of them is notorious. His $25,000 check to CREEP wound up in the bank account of one of the Watergate burglars. As a result he was investigated, but ultimately cleared, by the Senate Watergate Committee. . . .
For more GO TO > > > The Elephant Nests
See also: ADM; Bishop Estate; Hanford’s Creations; Investors Equity Life Insurance Company; Tyson Foods
See in Part I: Elizabeth Hanford Dole.
Arkansas Development and Finance Administration (ADFA) - From The Secret Life of Bill Clinton: . . . In 1989 the Arkansas Committee started investigating the alleged nexus of drug-running, money-laundering, and covert activities linked to Mena Airport.
The Arkansas Committee’s lead advocate, Mark Swaney, came to suspect that (Dan) Lasater and others were laundering funds through the Arkansas Development and Finance Administration (ADFA), a state-controlled investment bank created by Governor Clinton in 1985 to provide “low interest finance for economic development.” . . .
There was no need for Clinton to create ADFA. The state already had the Arkansas Housing Development Agency and the Arkansas Industrial Development Corp (later made famous by a clerk named Paula Corbin Jones). . . .
ADFA gave Clinton a patronage machine that answered to the Governor alone. . . .
As James Ring Adams reported in The American Spectator, it was designed with the help of a Boston consultant named Belden Daniels and allowed Clinton to tap into the huge reserves of the Arkansas Teachers Retirement System. At the same time, Clinton steered bond business to Lasater, and low interest industrial loans to the others in the Arkansas group — Seth Ward, for instance, the father-in-law of Webster Hubbel — frequently without due diligence and over the objections of the agency staff.
“They were giving money away like candy to the insiders,” said Mark Swaney. . . .
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Funds had been flowing offshore. ADFA had done at least $250 million worth of business with the Fuji Bank, Grand Cayman Branch . . . It was a nice piece of arbitrage profiteering. . . . Whether the money...came back from Grand Cayman is anybody’s guess. . . .
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In 1987 ADFA borrowed $5.04 million from Japan’s Sanwa Bank to buy stock in a Barbados company called Coral Reinsurance. . . .
The activities of Coral Reinsurance triggered an investigation by the Delaware Insurance Department in 1992, which caused panic at ADFA. . . .
Swaney believes that ADFA was created by Clinton as an instrument for Dan Lasater. What we know is that Lasater wrote at least eight letters to Bill Clinton recommending people for the board of ADFA. Most of them were appointed. . . .
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For more, go to > > > The Donkey Nests
See also: American International Group; Bank of Credit and Commerce; Citigroup; Coral Reinsurance; Dixie Mafia; Fuji Bank; Goldman Sachs; Lasater & Company; Sanwa Bank; Triads; Yakuza;
And in part I: Dan Harmon; Dan Lasater; Hillary Clinton; Robert Rubin; William Clinton
Asset Management International Financing & Settlement - A New York City-based company purchased by West Tsusho, a Tokyo-based company allegedly connected with the Yakuza, in a deal brokered by Prescott Bush, Jr., older brother of President George Bush.
See also: Yakuza
Assicurazioni Generali - From Conspirators’ Hierarchy: . . . Insurance companies play a key role in the business of the Committee of 300. Among these are found such top insurance companies as Assicurazioni Generali of Venice and Riunione Adriatica di Sicurta, the largest and second largest insurance companies in the world, who keep their bank accounts at Bank of International Settlements in Swiss gold francs. Both control a multiplicity of investment banks whose turnover in stocks on Wall Street double that of U.S. investors.
See also: Zurich Financial
Atlantic Richfield (ARCO) - From Conspirators’ Hierarchy: . . . Many of these organizations and institutions, companies and banks are so interfaced and interlocked as to make it an almost impossible task to sort them out. On RCA’s board sits Thornton Bradshaw, president of Atlantic Richfield and a member of NATO, World Wildlife Fund, the Club of Rome, The Aspen Institute for Humanistic Studies, the Council on Foreign Relations. Bradshaw is also chairman of NBC. . . .
From The Buying of the President (1996 ed.): . . . In 1988, 249 individuals each gave at least $100,000, achieving a total of $25 million, to help elect George Bush president. By giving that much, they became members of “Team 100" and not only had personal access to Bush and other members of the Bush administration, but many of them -- from real estate and construction to finance, from manufacturing to agribusiness to oil and gas interests -- received special favors during the Bush presidency. . . .
The many quid pro quo relationships have been well documented by Common Cause magazine and others. The two largest donors were Archer-Daniels-Midland (ADM) and its chairman, Dwayne Andreas, who gave $1,072,000, and Atlantic Richfield (ARCO) and its chairman, Lodwrick Cook, who contributed $862,360. Both companies made or saved hundreds of millions of dollars from their well-placed Washington investments. . . .
There are numerous examples of how companies that did as little as simply throw a cocktail party at the 1992 Democratic convention, to companies that contributed hundreds of thousands of dollars to the campaign and party, also had executives fly with (Ron) Brown on foreign trips. In each case, the company contributions or favors were done during, or subsequent to, Brown’s tenure as chairman of the DNC.
The companies involved include some of the country’s largest. Executives from the oil company ARCO, the Atlantic Richfield Company, got to go to China, Hong Kong, and South Africa with Brown. ARCO donated $278,317 to the DNC in 1991 and 1992 while Brown was the party chairman and from 1993 through 1994, ARCO gave $164,500 in soft money to the DNC. The total contribution to the Democrats between 1991 and 1994 was $442,817. . .
For more GO TO > > > The Elephant Nests
AT&T - From The Buying of the President (1996): . . . Nowhere is the headlong rush for cash by the political parties more blatant than at the quadrennial national conventions. And no one has chronicled these excesses more thoroughly than investigative reporter Sheila Kaplan. In a series of articles, she illustrated the remarkably unabashed extent of the corporate connection to the political parties evident at the Republican and Democratic conventions in 1992.
American Express Company, Time Warner, AT&T Company, and the New York Telephone Company, a subsidiary of NYNEX Corp, for example, each contributed more than $400,000 in cash and other support to help pay for the Democratic National Convention in New York City, at which Bill Clinton was nominated to be the party’s candidate for president. . . .
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See also: Export-Import Bank of the United States.
AXA Financial - One of the world’s largest insurance/financial companies, based in
France.
From Reuters News, 6/2/00:
INSURERS MUST HONOR POLICIES PAID TO NAZIS
by Joan Gralla
The World Jewish Congress on Friday said European insurers still have to make good on prewar policies sold to Holocaust survivors— even if the policies were cashed-in by Nazis.
Elan Steinberg, executive director for the advocacy group, said this was one issue he would stress on June 21, when the International Commission on Holocaust-era Insurance Claims meets in London. The WJC is a member of the commission, which is auditing Europe’s insurers to see if they cheated Holocaust families by failing to honor prewar policies.
“It is grotesque to describe a policy paid to a murderer as a paid policy,” Steinberg told Reuters. He explained that it was common practice for the Nazis to set up so-called blocked accounts— accounts held in the name of the recipient that could only be tapped by the Nazis.
“I have actually heard insurance representatives claim that since they paid those policies out they want blocked accounts considered paid claims,” he said. . . .
Germany’s Allianz, France’s AXA, Italy’s General Assicurazioni, and Swiss insurers Wintherthur and Zurich Allied, which participate in the commission, had all agreed to use relatively undemanding standards of proof because of the special nature of Holocaust claims.
In an internal document obtained by Reuters, the Washington, D.C.-based commission has accused the five insurers of wrongly rejecting some claims from Holocaust families by asking for documents that they cannot possibly supply. Few, if any, survivors walked out of concentration camps with insurance documents, bank books or other financial records.
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So, just where did the billions of dollars in Holocaust victims’ money go over the past half-century? Well, only the Third Reich and Robert Rubin may ever really know, but here are some possibilities:
AXA Financial is the 8th largest institutional investor in Columbia/HCA; the 7th largest in Barclays Bank; the 4th largest in Bank of America; the 3rd largest in Citigroup; the 3rd largest in American International Group; the 3rd largest in Merrill Lynch; and last but not least, the . . . (. . . drum-roll . . .)
#1 INVESTOR . . . in . . . LORAL SPACE . . . and . . . GOLDMAN SACHS ! ! !
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See also: AXA; Bank of America; Bishop Estate; Goldman Sachs; Loral Space; Zurich Allied.
Azabu Building Company - Azabu Building purchased a number of major hotel properties in Hawaii during the 1980's “big bubble” years, with Mitsui Trust providing much of the financing. Several of the properties were on land leased from Bishop Estate.
When the bubble burst, Azabu and Mitsui were forced to liquidate many of the properties at huge losses. Some of Azabu’s and Mitsui Trust’s distressed properties were purchased by entities in which Goldman Sachs, National Housing, and other Bishop Estate-connected companies play a part.
From U.S. News & World Report, 04/13/98, by David Kaplan:
Yakuza, Inc.
American investors are spending billions of dollars to snap up portfolios of bad loans from Japanese banks. That could put them on a collision course with notorious Japanese crime syndicates called “yakuza”. . . .
The wiser U.S. firms ... are hiring high-powered investigators and law firms in Tokyo to go through the portfolios loan by loan ...“they all have the same questions ... who are we dealing with? Who’s in the building?”
One portfolio of 49 loans examined ... found that 40 percent of the borrowers had ties to organized crime. Fully 25 percent of them had criminal records ranging from disrupting auctions to assault, extortion, and rape.
U.S. News obtained a similar portfolio of 108 properties offered to Western investors by Mitsui Trust & Banking Co., one of Japan’s largest banks. Thirteen of the properties — including condos, undeveloped land, and parking lots in Tokyo — are held by Azabu Building, a company that might not mean much to Americans but is quite familiar to Japanese police. In early March, Azabu’s president, Kitaro Watanabe, received two years in prison for hiding some $18 million in assets from creditors.
Azabu properties, moreover, are protected by groups tied to Tokyo’s largest crime syndicate, according to police. One investigator who ventured onto one of Watanabe’s properties was held hostage for an hour by its “tenants,” until the gang’s boss telephoned the hapless fellow, according to the man’s associates. “Next time you come out here, come with the proper introductions!” shouted the godfather. “Go home, wash your face, and come visit us again.”
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From: The Honolulu Star-Bulletin, 06/25/97: . . . Top Azabu Executives Arrested in Japan - The troubled real estate firm owns several major hotels in Hawaii. . . . The president and two other executives of Azabu Building Company were arrested today on suspicion of illegally concealing the firm’s assets to prevent creditors claiming them.
Arrested were Kitaro Watanabe, 63, the president, and Katsumi Naganuma, 62, and Shoichi Owaki, 60, board members of Azabu Building, one of the heaviest borrowers from failed housing loan companies.
In Hawaii, Watanabe was the early leader in Japanese “bubble” investing. In a buying spree that started in 1986, Azabu companies spent some $600 million on Hawaii hotels. They later shed two of them but they still own the Hyatt Regency Waikiki, the Ala Moana Hotel, the Maui Marriott and the Keauhou Beach Hotel. [Catbird note: Now only one - the Ala Moana Hotel.]
The three Azabu executives are suspected of having transferred some 1.3 billion yen ($11.3 million) in rents paid to the Azabu group to banks accounts of affiliated dummy companies, the Tokyo District Public Prosecutors Office said.
Prosecutors said the transfer of rents earned by Azabu between Sept 1994 and Dec 1995 was intended to keep such assets away from creditors. If convicted the three could be jailed for up to two years.
At present, the group has some 600 billion yen ($5.2 billion) in outstanding debts, including more than 110 billion yen to four housing loan companies taken over by Housing Loan Administration Corp., a government-backed debt-recovering body . . . The group also owes some 160 billion yen ($1.4 billion) to Mitsui Trust and Banking Co. . . . Most of the loans have become nonperforming . . .
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From: Honolulu Star-Bulletin, 7/31/97: Keauhou Beach Hotel being sold - A Chicago-based partnership is buying the 318-room Keauhou Beach Hotel on the Kona Coast . . .
Trinity Investment Trust LLC, which is also purchasing the mortgage to the Aloha Tower Marketplace, has signed a letter of agreement to acquire the beachfront hotel from Azabu USA.
The hotel, built in 1970, sits on land leased from the Bishop Estate. . . .
Azabu, headed by maverick deal maker Kitaro Watanabe, acquired the Keauhou Beach Hotel in 1987 for $13 million. During the 1980s, Azabu invested about $600 million in Hawaii, acquiring the Hyatt Regency Waikiki, the Ala Moana Hotel, the Maui Marriott and the Kona Lagoon [also on land leased from Bishop Estate].
Since then, Azabu has run into a string of financial difficulties. In 1993, lender Mitsui Trust & Banking Go. filed a foreclosure suit on the 1,200-room Hyatt Regency. In 1994, Mitsui wrote off $1 billion in bad debts from loans to Azabu.
Last month, Tokyo officials arrested Watanabe and two other Azabu officials alleging that they illegally concealed company assets from creditors. Azabu’s Hawaii subsidiary said then that the arrests had no effect on the company’s local operations. [Yuk!...Yuk!]
Trinity, meanwhile, is part of a new wave of American buyers who are purchasing properties from financially troubled Japanese investors. . . .
The company — whose investors include former VMS Realty executives George Ruff, local attorney Jon Miho [of McCorriston Miho Miller & Mukai fame - the defense attorneys for the ousted trustees] and hotel developer Charles Sweeney — is trying to acquire the $60 million mortgage to the Aloha Tower Marketplace from Mitsui and take over the waterfront complex.
Last year, Trinity and Apollo Advisors L.P. bought the $130 million mortgage to the nearby Harbor Court luxury office and condominium complex for an undisclosed price from Mitsui.
Trinity has also joined up with Apollo, time-share operator Signature Resorts Inc. and Goldman Sachs’ Whitehall Fund [another Bishop Estate investment] to buy the 413-room Embassy Suites Resort on Maui for $78 million. . . .
[Catbird Comment: Note that nowhere in the article is there any mention of Azabu’s connection with the Yakuza.]
* * *
For more GO TO > > > Broken Trust
See also: Apollo Advisers; Bishop Estate; Goldman Sachs; National Housing Corp; Mitsui Trust & Banking Co.; Yakuza.
Banco Ambrosiano - From The Laundrymen: . . .
Roberto Calvi...was found hanging under Blackfriars Bridge in London on June 18, 1982. . . .
Known as “God’s Banker” because of his close associations with the Vatican, Calvi had been chairman and president of the Milan-headquartered Banco Ambrosiano. . . . And all sorts of strange dealings were going on.
In June 1979, the Nicaragua branch loaned $9 million to Nordeurop, a Liechtenstein shell company set up by Calvi in the United States. Nordeurop sent the money to another Calvi-created shell, this one in Panama, where it was recorded as a fee. . . .
By May 1982, the newspapers reported that $1.3 billion of the bank’s money was unaccounted for. Three weeks later, Calvi was dead. . . .
The mystery surrounding his death unquestionably revolves around that missing money, much of which turns out to have been washed through shell companies registered in Panama and Liechtenstein — shell companies that had affiliations, direct or otherwise, with the Vatican’s private bank. . . .
* * *
(Calvi) left Italy on Friday, June 11, 1982, with his briefcase . . .
On the following Monday, Banco Ambrosiano’s shares crashed. On Wednesday, the bank’s board was dissolved. On Friday, Calvi was dead. . . .
Rumor has it that Calvi was murdered for the contents of his briefcase. . . .
Calvi’s papers apparently proved the money had been washed through the heart of the British capital and then used by (Licio) Gelli, who was at the time acting for the Argentineans, to buy Exocet missiles, which were fired at British forces during the Falklands War. . . .
Banco Ambrosiano was the greatest banking collapse in Europe since the end of World War II.
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.
See also: AXA Financial; Bank of Boston; Bank of Credit and Commerce; Barclay’s Bank; Investors Equity Insurance Co.; NationsBank; The Democratic Party.
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.
* * *
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. . . .
* * *
Bank of Boston has since been purchased by Credit Suisse Bank. . . .
* * *
See also: Bank of America; Bank of Credit and Commerce; Bishop Estate; Credit Suisse Bank; Orion Capital
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. . . .
* * *
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. . . .
* * *
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.
* * *
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.
* * *
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.
* * *
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. . . .
* * *
See also: American International Group; Arkansas Development and Finance Authority (ADFA); Bank of America; Committee of 300; Coral Reinsurance; Dixie Mafia; Goldman Sachs; Stephens & Company;
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 . . .
* * *
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. . . .
* * *
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. . . .
See also: Bishop Estate; Daewoo; McKenzie Methane
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 also: Bishop Estate; Marsh & McLennan
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
* * *
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 4th largest institutional investor in Goldman Sachs; the 4th largest in Marsh & McLennan; the 6th in Chubb Group; the 2nd in Citigroup; the 6th in Lockheed Martin; the 4th in Raytheon Company; the 5th in Columbia/HCA; the 2nd in Merrill Lynch; the 4th in Riscorp, Inc.; the 3rd in Conseco, Inc.; the 6th in Trump Hotel/ Casino; the 7th in Mirage Resorts, Inc.; the 5th in Boyd Gaming Corp.; the 6th in Harrah’s Enterprises; the 2nd in Bank of America; the 4th in American Express; the 3rd in CBS Corp; the 2nd in America Online, Inc; the 4th in Time Warner, Inc.; the 5th in Wilmington Trust; the 3rd in PNC Bank; the 3rd in Allstate Insurance; the 2nd in American International Group (AIG); the 4th 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.
See also: American Express; Bishop Estate; MacArthur Foundation; WCI Communities
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. . . .
See also: Committee of 300; World Trade Organization
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 also: Barclays Bank; Columbia/HCA; Nomura Securities.
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. . .
See also: Bank of New York; Nauru; Sumitomo Bank; Yakuza.
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”
See also: Disecting Fristy
See in Part I: Richard Rainwater.
Committee of 300 - From Conspirators’ Hierarchy:
The Committee of 300 consists of certain individuals, specialists in their own fields, including cultus diabolicus, mind altering drugs, and specialists in murder by poison; intelligence; banking; and every facet of commercial activity.
* * *
The Committee’s structure is as follows: The Travistock Institute at Sussex University and London sites is owned and controlled by the Royal Institute for International Affairs whose “hofjuden” in America is Henry Kissinger. The EAGLE STAR GROUP , which changed its name to the STAR GROUP after the close of the Second World War, is composed of a group of major international companies involved in overlapping and interfaced areas: (1) Insurance, (2) Banking, (3) Real Estate, (4) Entertainment, (5) High Technology, including cybernetics, electronic communications, etc. . . .
* * *
Banks large and small in the thousands are in the Committee of 300 network, including Banca Commerciale d’Italia, Banca Privata, Banco Ambrosiano, the Netherlands Bank, Barclays Bank, Banco del Colombia, Banco de Ibero-America. Of special interest is Banca del la Svizzeria Italiana (BSI) — since it handles flight capital investments to and from the United States — primarily in dollars and U.S. Bonds — located and isolated in “neutral” Lugano, the flight capital center for the Venetian Black Nobility. ...
BCCI, BNL, Banco Mercantil de Mexico, Banco Nacional de Panama, Bangkok Metropolitan Bank, Bank Leumi, Bank Hapoalim, Standard Bank, Bank of Geneva, Bank of Ireland, Bank of Scotland, Bank of Montreal, Bank of Nova Scotia, Banque Paris et Pays Bas, British Bank of the Middle East and the Royal Bank of Canada to name but a very small number in a huge list of “speciality” banks. . . .
* * *
The Oppenheimers of South Africa are much bigger “heavy-weights” than the Rockefellers.
For instance, in 1981 Harry Oppenheimer, chairman of the giant Anglo American Corporation that controls gold and diamond mining, sales and distribution in the world, stated that he was about to launch into the North American banking market.
Oppenheimer promptly invested $10 billion in a specially created vehicle for the purpose of buying into big banks in the U.S., among which was Citicorp.
Oppenheimer’s investment vehicle was called Minorco, which set up shop in Bermuda, a British royal family preserve. On the board of Minorco was to be found Walter Wriston of Citicorp and Robert Clare, its chief counsel. . . .
The only other company to rival Oppenheimer in the field of precious metals and minerals was Consolidated Gold Fields of South Africa, but Oppenheimer took control of it with a 28% stake, the largest single stockholder.
Thus gold, diamonds, platinum, titanium, tantalite, copper, iron ore, uranium and 52 other metals and minerals, many of them of absolutely vital strategic value to the United States, passed into the hands of the Committee of 300. . . .
* * *
Some of the members of the Committee of 300 listed by Dr. John Coleman include: Rank Organization, Xerox Corporation, ITT, IBM, RCA, CBS, NBC, BBC and CBC in communications; Raytheon, Textron, Bendix, Atlantic Richfield, British Petroleum, Royal Dutch Shell, Marine Midland Bank, Lehman Brothers, Kuhn Leob, General Electric, Westinghouse Corporation, United Fruit Company, just to cite a few. . . .
* * *
A network of Wall Street banks and brokerage houses takes care of the stock market for the Committee, and prominent among these are Blyth, Eastman Dillon, the Morgan groups, Lazard Freres and Kuhn Loeb Rhodes. Nothing happens on Wall Street that is not controlled by the Bank of England, whose instructions are relayed through the Morgan groups and then put into action through key brokerage houses whose top executives are ultimately responsible for carrying Committee directives. . . .
* * *
Before it overstepped the limits laid down by Morgan Guarantee, Drexel Burnham Lambert was a favorite of the Committee of 300. In 1981 almost every major brokerage house on Wall Street had sold out to the Committee, Phibro merging with Solomon Brothers. Phibro is the business arm of the Oppenheimers of Anglo American Corporation. . .
* * *
In the immediate post-WWII period, one of the most common methods used by Resorts International and other drug related companies to clean money was by courier service to a money laundering bank. Now all that has changed. Only the small fry still use such a risky method. The “big fish” conduit their money via the CHIPS system, an acronym for Clearing House International Payments System, run by a Burroughs computer system centered at the New York Clearing House.
Twelve of the largest banks use this system. One of them is the Hong Kong and Shanghai Bank. Another is Credit Suisse, that oh so respectable paragon of virtue in banking — until the lid is lifted. Combined with the SWIFT system based in Virginia, dirty drug money becomes invisible. Only wanton carelessness results in the FBI getting lucky now and then, if and when it is told not to look the other way. . . .
* * *
Committee of 300 corporations, banks, and insurance companies operate under the unified command covering every conceivable matter of strategy and cohesive action. The Committee is the ONLY organized power hierarchy in the world transcending all governments and individuals, however powerful and secure they may feel themselves to be. This covers finance, defense matters and political parties of all colors and types. . . .
* * *
Recommended Reading: Conspirators’ Hierarchy
See also: BCCI; Barclays Bank; Raytheon; Westinghouse; Xerox Corp;
See in Part I: George Bush; William Simon.
Commodity Futures Trading Commission - From: The Buying of the President (1996 ed): . . .
[Phil] Gramm has also been criticized for mixing government business and campaign politics by using his Senate office staff to work on campaigns. . . . At least two different aides to Senator Gramm have written memos about how Gramm’s wife, Wendy...should be used for his reelection bid. . . .
That is particularly interesting in light of the powerful position she held in Washington as chairwoman of the Commodity Futures Trading Commission. As the nation’s leading regulator of futures contracts for all agricultural commodities, Wendy Gramm was under tight ethical constraints as to the degree and nature of her personal daily interaction with agribusiness interests.
In other words, the chairwoman of the powerful federal regulatory agency overseeing agriculture commodities futures trading would be helping her U.S. senator husband raise campaign funds from the corporations and individuals she regulated. . . .
The CFTC oversees federal regulation of the nation’s fourteen commodities and futures exchanges. At those exchanges, contracts to buy and sell a seemingly endless variety of commodities are traded: oil and gas, soybeans, cattle, pork belies, corn, precious metals, cocoa, lumber, cranberries, and sugar, to name but a few. The regulatory duties of the CFTC are aimed largely at ensuring fairness and stability at the nation’s commodities exchanges. . . .
One week after Bill Clinton won the presidential election it became clear that Wendy Gramm would be leaving the politically appointed CFTC post. On November 16, 1992, nine energy companies wrote to the commission seeking to exempt energy derivative contracts, a business valued at $5 TRILLION a year, from federal regulation....
In response to the energy companies’ request, Wendy Gramm set in motion the process that led to those energy derivative contracts, and other exotic financial transactions, being exempted from regulation. . . .
A Center for Public Integrity investigation shows that of the nine companies that requested the exemption, seven had donated to Phil Gramm campaigns through PACs, company officers, or employees. . . .
Cumulatively, Gramm’s campaigns had received $157,250 from the people who were asking his wife to exempt energy derivatives and the other transactions from regulation. ...
During Wendy Gramm’s tenure with the commodities commission, Phil Gramm accepted $38,500 in commodity honoraria, according to his actual disclosure records...
At the same time she was heading the commodities commission, he was on the Senate Banking committee. That means that Phil Gramm, too, had regulatory jurisdiction and oversight regarding commodities.
On July 24, 1990, Phil Gramm voted to kill an amendment that would have lowered the sugar price support from eighteen cents a pound to sixteen cents a pound. That was a potential conflict of interest because Gramm’s disclosure show that at the time the couple owned between $15,000 and $50,000 worth of stock in a sugar company named Castle and Cooke.
Coral Reinsurance - From: The Strange Clinton - Rubin - Insurance Industry Connection.
6/13/97:
. . . As American Deposit Corp. learned the hard way ... strong ties exist between Clinton, Secretary of Treasury Robert Rubin and the insurance industry.
Insurance industry representatives secretly approached the IRS to issue damaging proposed regulations to the Retirement CD and the Treasury Department pressured the IRS to acquiesce. Some say that campaign fund contributions were at the source of this action. . .
But was this the first time Clinton, Rubin and the insurance industry acted together for a dubious project? Apparently not. A strange and convoluted story begins in Arkansas in 1987.
In that year American International Group, Inc., headed by Maurice Greenburg, founded an offshore reinsurance company in Barbados. For several years, AIG denied being affiliated with Coral Reinsurance, as it was named. . . .
While Bill Clinton was governor of Arkansas, he founded the Arkansas Development Finance Authority, a government agency empowered to issue industrial bonds. The ADFA came to the attention of the Arkansas Committee, a group investigating rumors of drug trafficking out of the Mena, Arkansas airport.
Observing the adage, “follow the money,” they were lead to the ADFA. And the ADFA had some strange dealings. . . .
The ADFA borrowed $5 million from the Chicago branch of Sanwa Bank. It then purchased slightly over $5 million in stock of Coral Reinsurance, the Barbados insurance company founded by AIG. Coral then deposited the $5 million, along with $55 million in other investors’ stock purchase funds, in Sanwa Bank. The net result was the bank loaned the money and got it all back in days. . . .
This strange deal was the scheme on Goldman Sachs, headed at the time by Robert Rubin.
Goldman also provided guarantees to ADFA, such a put agreement should ADFA not be permitted to own the stock. (It is against the Arkansas Constitution for the government to own stock in corporations.) . . .
Some reporters draw inferences from several facts: Barbados has lax banking regulations and tight corporate secrecy laws preventing outsiders from learning corporate ownership; and when ADFA was set up, the legislation prohibited the state auditors from examining the agency. . .
* * *
From The Washington Weekly, Mar. 17, 1997:
THE BARBADOS CONNECTION: CORAL REINSURANCE
After Reps. Spencer Bachus (R-Ala) and Henry Bonilla (R-Texas) voted to extend Most-Favored-Nation trade status for China last year, they received an invitation from the China Government to tour major cities in Red China. And who paid for their trip?
Not only the Chinese Government, but also American International Group, with money laundered through the National Committee on United States-China Relations and the Freeman Foundation, reported the newspaper Roll Call last week. . . .
American International Group is headquartered in Barbados and operates Coral Reinsurance.
Where have we heard that name before? Oh yes! In Arkansas. In 1986 the notorious Arkansas Development Finance Authority borrowed $5,000,000 from a Japanese bank’s Chicago branch as part of a $60,000,000 deal to purchase stock in Coral Reinsurance.
The deal was brokered by Goldman Sachs, whose head Robert Rubin is now Treasury Secretary. On the board of directors of AIG is one Lloyd Benson, former Treasury Secretary. . .
* * *
For More on the Web: Gray Money
See also: American International Group; Arkansas Development Finance Authority; Bishop Estate; Dixie Mafia; Goldman Sachs; Lasater & Co.; Marsh & McLennan; Sanwa Bank
And in Part I: Dan Harmon; Dan Lasater; Hillary Clinton; Robert Rubin; William Clinton
Corning Group - From Conspirators’ Hierarchy:
. . . As part of Rank’s United States operation, no other single company has been more successful for Rank than the Corning Group, owners of the Metropolitan Life Insurance Company and the New York Life Insurance Company.
Committee of 300 members, Amory Houghton and his brother James Houghton, have long served the British Crown through the above named insurance companies, and Corning Glass, Dow Corning and Corning International. Both sit on the board of IBM and Citicorp. James Houghton is a director of the Princeton Institute for Advanced Studies, a director of the J. Pierpont Morgan Library, a stronghold of the RIIA and the CFR, and he is also a director of CBS. . . .
Also on the Corning Glass board sits the Bishop of the Archdiocese of the Anglican (Episcopalian) Church of Boston. All this gives the group its much-vaunted air of respectability, which insurance company executive’s must carry, and as we shall see, in addition to James Houghton, Keith Funston and John Harper, both on Corning’s board, run the Metropolitan Life Insurance Company. . . .
The MASSIVE gridding and interfacing of just this one single unit of the Committee of 300 will give us a good indication of the vast power at the disposal of the conspirators’ hierarchy, before which all knees are bowed, including the knee of the President of the United States, whomever that happens to be. . . .
What is important to note is how this American Company, one of HUNDREDS, is interfaced with British intelligence, with Canada, the Far East and South Africa, not to mention its gridding of corporate officials and directors reaching into every aspect of business and politics in the United States. . .
Credit Lyonnais - In 1996, Credit Lyonnais was the world’s largest non-Japanese bank, ultimately owned by the French Government.
From the 10/01/96 net article, Credit Lyonnais & L.F. Rothchild Ready to Topple by J. Orlin Grabbe: . . . What will happen when the world’s largest non-Japanese bank topples? The repercussions will ripple throughout the world banking system. Get ready to see Citibank, Chase and the Chicago Mercantile hammered. . . .
Credit Lyonnais has long relied on two simple mechanisms to ensure its bloated growth; a ready supply of money-laundering deposits from the Cali cartel and similar sources, and financial infusions from the French government (which owns most of the bank) when all else fails...
Meanwhile, the bank has frittered away its assets in an endless array of non-performing loans. Representative of this is Credit Lyonnais’ financing of Giancarlo Parretti’s purchase of Metro-Goldwyn-Mayer from Kirk Kerkorian in 1990 for $1.3 billion. Later, in 1992, Credit Lyonnais acquired the assets of MGM, which it then sold to a Kirk Kerkorian-backed group for $1.3 billion earlier this year . . . after having pouring millions of dollars into the company.
The big private loser so far is L.F. Rothschild, much of whose fortune is tied up in Credit Lyonnais. . . . Meanwhile, the European Commission has launched a series of investigations into a number of suspicious transactions associated with Credit Lyonnaise. . .
Finally, there is the usual assortment of dead bodies that often appear in the banking world when millions of dollars are at stake.
One of these is Armschel Rothchild, who until his demise was the chairman of British mutual fund group, Rothschild Asset Management.
Amschel committed suicide by a very innovative method back in July. He took the belt from a hotel robe, tied one end to a towel rack, and the other end to his neck. He then hanged himself by, well, let’s see, “jerking back suddenly.” . . . Hmmmmm.
* * *
From The Financial Express, 10/28/98: Credit Lyonnais sale put back to 1999 - French finance minister Dominique Strauss-Kahn will unveil the terms of sale for French bank Credit Lyonnais on Thursday but the float will now be pushed back to 1999 . . . Several groups, including Europe’s largest two insurance companies — France’s AXA and Germany’s Allianz — have expressed interest in strategic stakes in the bank . . .
* * *
From Forbes Magazine, 12/13/99, by David McClintick: The Dirtiest Bank in the World. — THE FIRE BEGAN at 8:30 on a Sunday morning in 1996 ... in the main trading room of Credit Lyonnais, one of France’s biggest banks. . . . Dozens of offices and thousands of documents, as well as the trading room, the largest in Continental Europe, built by Gustave Eiffel, were reduced to ashes and rubble. French police suspect the fire was the work of arsonists.
It’s a striking and fitting image of what Credit Lyonnais has become. Once a force in global finance, the bank is little more than half its former size, having been looted by criminals, racked by scandal and decimated by the loss of at least $20 billion ... in reckless and corrupt investments. It is by far the biggest banking debacle in history. This institution, nationalized by the French government in 1945, is an object lesson in what can go wrong in a government-owned commercial enterprise without accountability. . . .
A criminal inquiry, which began quietly five years ago as a narrow probe of an eccentric Italian tycoon, has grown dramatically into more than 100 separate cases of suspected fraud, embezzlement, bribery, perjury, forgery, money-laundering, and even blackmail and arson in France and several other nations, including the U.S. . . .
The Department of Justice, the FBI, the IRS and the Federal Reserve ... are examining Credit Lyonnais’ far-flung activities. Rarely have U.S. authorities so deeply probed the operations of a foreign bank. It is now clear that Credit Lyonnais was an octopus of fraud. By comparison, the infamous BCCI, which collapsed with a $7 billion loss, was small change. . . .
Unlike BCCI, Credit Lyonnais is still with us. Reorganized in a French taxpayer-funded bailout that segregated most of the bad loans into a separate entity, the bank was privatized earlier this year, with the government retaining 10% of the common shares. Credit Lyonnais is now a profitable business, with assets of $214 billion, new management and a market value of $9.6 billion. But the sordid past is not behind it. It will be years before the lawsuits and criminal investigations are resolved and the bad assets liquidated. . . .
Among possible crimes in the U.S. under investigation are securities fraud, mail fraud and lying to the Federal Reserve in connection with the purchase of the controversial California insurance company, Executive Life, and its junk bond portfolio. . . .
If the Federal Reserve finds Credit Lyonnais culpable for serious misconduct, as it did Japan’s Daiwa Bank, it could fine it tens — even hundreds — of millions of dollars and even expel it from the country, where it is believed to earn more profit than in any nation outside France. . . .
In France it is nothing less than a phenomenon of historic import, a jolting demonstration of the arrogance, insularity and lack of accountability of the state-dominated elite that has governed the country’s financial sector since World War II. The criminal investigation is the country’s largest ever. In a move virtually unprecedented in history, offices of the French Treasury, the core of the Ministry of Finance, have been searched for evidence of crime. . . .
Investigators are probing a wide array of Credit Lyonnais’ clients and subsidiaries, some of which have bred sizable scandals of their own. These include the doings of such former clients as Robert Maxwell, the late British publisher who died under mysterious circumstances in 1991, and Bernard Tapie, who owned Adidas for a time with Credit Lyonnais’ help and later went to prison for bribery in a separate case. . . .
Even a former governor of France’s central bank has been questioned. Investigators had discussed with other top officials whether their actions or inactions might have fostered Credit Lyonnais’ frauds and losses. Prominent financiers, well-known in global banking circles, face possible imprisonment, financial calamity and public disgrace. . . .
* * *
Pecked from the Chicago Mercantile Exchange website by the Catbird on 12/25/99:
Clearing Member Firms: Credit Lyonnais Rouse (USA) Limited —
Firm Description: Credit Lyonnaise Rouse Limited, founded in 1847.
● a wholly-owned subsidiary of Credit Lyonnais S.A. (ultimately owned by the French Government)
● a 24-hour “one stop shopping” trading center for commodity futures & options: Stock Index, Financial, Forex, Metals, Energy, Industrial and Agricultural
● a recipient of the International Financing Review’s “Futures House of the Year” award
● a market maker in Exchange for Physicals for IMM-traded currencies
● a market maker in Exchange for Physicals for COMEX-traded gold and silver
● a broker/dealer in currencies and bullion spot and forwards . . .
Futures Markets:
● Currencies
● Equity Indices
● Interest Rates
● Metals
Additional Company Information:
Credit Lyonnais Rouse Ltd. (CLR) is an international house with offices in the major financial centers of the world. As a wholly-owned subsidiary of Credit Lyonnais S.A. (itself ultimately owned by the French Government), CLR enjoys a long history in satisfying customers who demand high quality, professional services in exchange-traded futures and options, cash markets and overnight Exchange for Physicals. . . .
[A Catbird comment: Wh-a-a-at? ...no mention of it being the dirtiest bank in the world???]
See also: AXA Financial
Credit Suisse Bank - From The Laundrymen:
. . . In 1983, Sal Amendolito resurfaced, arrested for fraud in New Orleans....
Agents from the FBI, Customs, the DEA, the IRS and the Bureau of Alcohol, Tobacco and Firearms put a case together that brought grand jury indictments against thirty-nine members of the ring for their participation in drug trafficking and money laundering. Sal Amendolito became a government witness, testified against the others, and was never charged. . . .
Because some of the culprits were hiding in Italy, including Della Torre, only twenty-two actually stood trail in New York. After 17 months of hearings, 55,000 FBI wire taps — most of them in Italian — and the murder of one suspect, the 21 defendants were found guilty.
The judge sentenced the five Mafia ring leaders to terms of 20 to 45 years. He also ordered four defendants to pay $2.5 million to help fund treatments for heroine addicts. . . .
The group had smuggled 750 kilos of heroin into the States, with an estimated street value of $1.6 billion. Some major financial institutions had also been embarrassed; namely, Merrill Lynch, EF Hutton, and Chemical Bank in New York, Handelsbank in Zurich, and, especially Credit Suisse in Bellinzona.
One of the accounts at Credit Suisse was secretly called “Wall Street 651.” The owner was Oliviero Tognoli, a well-known industrialist to whom the mafia chieftains secretly turned for financial advice. Nearly $20 million passed through his account. . . .
See also: Bank of Boston; Committee of 300
Crossroads Group - In 1996, Hawaii’s Bishop Estate loaned approximately $1 million to Charles Harmon, Jr., an investment banker and former general partner of Goldman Sachs.
From: Pacific Business News, 8/12/96:
. . . Bishop Estate has quietly purchased the majority interest of a Connecticut specialized advisory business that manages almost $1 billion in assets.
Royal Hawaiian Shopping Center, Inc., a for-profit subsidiary of Bishop Estate, is a co-investor in the purchase of Bigler Investment Management, a Farmington, Conn., firm that manages fund-of-fund accounts...
The purchasing entity, called The Crossroads Group, is expected to take on a much more aggressive money-management outlook. ... other investors in The Crossroads Group are parties that have had ‘long relationships’ with Royal Hawaiian ...
Massachusetts equity analyst Steven P. Galante said his own research found Bishop Estate purchased about a 60% stake in The Crossroads Group. The management team and others own the remaining interest. . . .
According to Galante ... principals of The Crossroads Group are: Charles M. Harmon, Jr., an investment banker and former general partner at Goldman, Sachs & Co. in New York; Larry I. Landry, chief investment officer of John D. & Catherine T. MacArthur Foundation in Chicago; and Brad Heppner, a consultant at Bain & Co. in Dallas and former director of private investments at the MacArthur Foundation. . . .
All have prior experience with Bishop Estate. In 1993, the MacArthur Foundation, along with Duke University’s endowment fund, backed the formation of a Boston merchant bank called Orion Capital Partners LP. . . .
Harmon is familiar with Bishop Estate because the Hawaii trust owns 10 percent of Goldman Sachs. . . .
Bigler Investment Management’s fund-of-fund clients include Connecticut State Treasury, Massachusetts’ Pension Reserves Investment Management Board, Rhode Island Employees’ Retirement System, City & County of San Francisco Retirement System and the pension funds of E.I. duPont de Nemours & Co...
* * *
From The Hartford Courant, 10/29/99, by Mike McIntire and Jon Lender:
. . .The Texas-based managers of an investment fund with a solid track record handling state pension money say they lost a $100 million investment deal in 1998 because they refused a directive from then-Treasurer, Paul Silvester, to pay a finder’s fee to someone of his choosing. . . .
After Crossroads Investment Co. lost the deal, a Crossroads executive who had negotiated with Silvester left the firm, set up his own company and — after agreeing to pay the $1.75 million fee — was awarded a $100 million investment, according to documents and sources. . . .
Silvester had been negotiating a possible $100 million investment in the Crossroads Constitution Fund. The state already had $300 million invested in Crossroads dating back to 1987, when, during an era in pension deal-making, the Hartford-based Crossroads had a contract to pay millions in fees to a partnership involving Democratic power broker Peter G. Kelly. ...
By the time Silvester began talking to Crossroads in 1998, the fund’s assets had been acquired by a group of Texas investors, who were not interested in forking over the kind of fees Crossroads had paid Kelly and his associates. So when Silvester told Crossroads representative Larry Landry that a fee would need to be paid, the new management at Crossroads said no.
Last summer, Landry, a former chief investment officer of the philanthropic MacArthur Foundation, left Crossroads to set up the Westport Fund . . . Silvester has alleged that he had arrangements with others to whom he steered fees, whereby they would kick back some of the money ...
Part of the revelations about Crossroads and Westport surfaced in court documents related to a dispute between the new management of Crossroads and Finley Associates, the Kelly group that had collected fees for years from the old Crossroads team. Information made public because of the dispute shows just how lucrative the finder’s fee business can be for influential politicians.
In 1987, George C. Finley, Kelly’s associate in Finley Associates, signed a consulting agreement with Crossroads whereby Finley Associates would help Crossroads win state pension investments and be paid 20 percent of the fund’s management fees. At that time, the principal partners in Crossroads were Peter M. Seigle and Harold E. Bigler, Jr., both local businessmen.
Between 1987 and 1992, then-Treasurer Francisco L. Borges, a Democrat, invested $300 million of pension funds with Crossroads, generating fees for Finley that were paid in quarterly increments of $162,750, court records show.
Borges was aware that Finley and Kelly - a former finance chairman of the Democratic National Committee and a powerful figure in Connecticut politics - would be reaping fees, because Finley disclosed the arrangement in a letter to Borges dated May 14, 1987. . . .
When a group of Texas investors took control of the Crossroads Constitution Fund in August 1998, they stopped making payments to Finley, court records show. Heppner, the Crossroads CEO, said in his letter that Kelly and Finley complained, saying they were due to receive $3 million more in fees until 2004. . . .
In May, both sides reached a settlement in which Crossroads agreed to pay Finley Associates $2.3 million for continued work on behalf of the fund. But Crossroads said it stopped making the payments in September, after reading news accounts that said the State Ethics Commission was investigating whether fees paid to finders for pension investments violated the state’s restrictions of administrative lobbying.
Now, Crossroads and Finley Associates are suing each other. . . .
For more GO TO > > > Broken Trust
See also: Bishop Estate; Bedford Properties; Carlyle Group; Goldman Sachs; MacArthur Foundation; Marsh & McLennan;; Orion Capital; WCI Communities
And in Part I: Adele Smith Simmons; Charles Harmon, Jr.; George Bush; Paul J. Silvester
Daewoo International - From a web posting by Corporate Predators: The Top 100 Corporation Criminals of the 1990's —
Type of Fine: Campaign Finance.
Criminal Fine: $200,000
Daewoo International (America) Corporation pled guilty to violating the Federal Election Campaign Act. The company was charged with making $5,000 in illegal contributions to the 1992 Jay Kim for Congress Campaign Committee.
Under federal law it is illegal for corporations to contribute to candidates in federal elections and it is illegal to make contributions in the name of another.
* * *
From Multinational Monitor, 10/97:
. . . Corporate Crime Amnesty: Who said the higher they come, the harder they fall? The high and mighty in South Korea are being given an awfully soft landing. The South Korean government decided in September to grant amnesty to 23 businesspeople, including the heads of seven giant conglomerates convicted earlier of bribery or embezzlement, according to reports in the Korea Herald.
The heads of the seven conglomerates (Samsung, Daewoo, Dong-A, Jinro, Daelim, Dongbus and Dacho) were sentenced last December in connection with bribery schemes that led to the imprisonment of former presidents Chun Doo Hwan and Roh Tae-woo. Also given amnesty were 14 executives from Hyundai, who were convicted in a separate embezzlement scheme connected to presidential politics. . . .
The reason for the amnesty decision, which was reached at a cabinet meeting headed by Prime Minister Koh Kun, said Justice Minister Kim Jong-koo, was to “raise the morale of businessmen as a whole, so they can devote themselves again to boosting the national economy.” ...
* * *
From The Economist, 8/21/99: The Death of Daewoo:
. . . The story of the creation of Daewoo was also the story of the rise of South Korea. Over just three decades, Kim Woo Choong, a former shipyard worker of modest means, built, through energy, guts and determination, a global industrial giant that reached from automobiles and electronics to financial services and construction....
On August 16th, Daewoo’s long-suffering creditor banks announced a government-orchestrated plan to dismantle the sprawling group, signaling what they hope will be the final chapter in a protracted crisis that has cast a cloud over South Korea’s recovery. When that cloud clears, Daewoo (“Great Universe”), the name Mr. Kim chose in 1967 when the firm was just a tiny speck in what was then one of the poorest countries in Asia, will remain only on its cars and trading operation, according to the plan.
The rest of its dozens of Korean businesses are to be sold off by the end of the year. Daewoo has already announced that an investment group of American banks has agreed to buy most of its electronics business for $3.2 billion. In exchange for all this, the government will prevent the creditor banks from forcing the firm into bankruptcy and liquidation.
Despite Daewoo’s long-standing financial troubles, led by its $50 billion in debt, the near-collapse of the group in July still shocked many Koreans. They had believed that Hyundai, Daewoo, Samsung and LG, the four biggest chaebol or family-controlled business groups, were too big to fail.
In a sense, they were right. For all the government’s tough talk and Kim Dae Jung’s televised speech on Aug 15th in which he claimed he would be the first South Korean president to dare to reform the chaebol, neither government nor banks plan to liquidate a single Daewoo company, for fear of rising unemployment. Daewoo companies and their subcontractors employ some 2.5 million people in Korea alone, which— as a government official admits— is the main reason for rescuing the group. Nor was there any mention of Daewoo’s scores of overseas subsidiaries, which are often tangled in complicated business and financial relationships that go far beyond South Korea’s banks.
Even achieving the restructuring announced this week will be tough. There are more than 60 Korean creditor banks in the negotiations . . . Foreign banks, which together extended $9.9 billion of loans to Daewoo, are even harder to keep in order. Cash and loans flowed freely between Daewoo subsidiaries regardless of shareholder interests and so, if any one of the creditors calls in loans and bankrupts a Daewoo company, it could pull the whole lot down....
Daewoo’s financial trouble came to a head only last month, but its failure was a long time coming. Last year, when the economic crisis forced most of the chaebol to cut back, Daewoo brazenly added 14 new firms to its existing 275 subsidiaries— and this in a year when the group lost a combined $458 million on sales of $51 billion.
At the end of 1997, South Korea’s four biggest chaebol averaged debt of nearly five times their equity. But while Samsung and LG cut back during the subsequent year of economic crisis, Daewoo acted as if nothing had changed: it added 40% more debt. . . .
See also: Bank of Hawaii; Goldman Sachs.
Dai-Ichi Kangyo Bank - From nando.com, 7/5/97:
Tokyo banks gripped by reign of terror - Kuniju Miyazaki, former chairman of Dai-Ichi Kangyo Bank had had enough. After the two days of grueling questioning by investigators, who were looking into his bank’s payment of billions of yen to a corporate blackmailer, he felt physically and psychologically wrecked.
A further interrogation was scheduled last Sunday afternoon. But early that morning he wrote an apologetic letter to his sleeping wife and another letter to his fellow directors, and hanged himself from a bookcase in his bedroom.
The 67-year-old bank executive is the latest victim in a widening scandal surrounding illegal payments made by DKB, Nomura Securities and other Japanese firms to Ryuichi Koike, a self-confessed racketeer. . . .
See also: Goldman Sachs; Nomura Securities; Sumitomo Bank; Yakuza.
Daiwa Bank - From a Press Release by the US Atty, Southern Dist of NY, 11/2/95:
CRIMINAL INDICTMENT OF DAIWA BANK
[It was] announced today that a 24-count indictment has been filed in Manhattan federal court against THE DAIWA BANK, LTD. (“DAIWA”). DAIWA is charged with conspiracy, mail and wire fraud, obstructing an examination of a financial institution, falsification of bank records, and misprision of felonies by failing to disclose federal crimes.
The charges arise out of the unauthorized sale of securities from DAIWA’s custody account, including the sale of more than $375 million in customer securities, by Toshihide Iguchi, a former Executive VP at the New York Branch, which were used to cover trading losses incurred by Iguchi; Iguchi’s attempts to cover-up those losses and unauthorized sales, which by 1995 had grown to more than $1.1 billion; and DAIWA’s attempts to continue the cover-up after learning of Iguchi’s illegal conduct; and DAIWA’s alleged repeated attempts, dating back to at least 1988, to obstruct the Board of Governors of the Federal Reserve System and the New York Banking Department.
According to the Indictment, DAIWA learned in mid-July 1995 that Iguchi had lost more than $1.1 billion through unauthorized trading in US govt securities, and the sale of securities belonging to DAIWA’s customers to conceal those losses. . . .
If convicted on the criminal charges filed today, DAIWA faces maximum fines under the federal Sentencing Guidelines exceeding $1 billion. . . .
DAIWA is a Japanese bank headquartered in Osaka, Japan. DAIWA is one of Japan’s largest commercial banks and maintains branches around the world, including offices in NY and 10 other states in the US.
* * *
From The Detroit News, 10/26/96:
Daiwa Bank Executive Sentenced for Cover-up of Unauthorized Bond Trades - The former general manager of Daiwa Bank’s New York branch was sentenced Friday to two months in jail and fined $100,000 for hiding $1.1 billion in losses from unauthorized bond trades.
Masahiro Tsuda was one of two Daiwa employees charged in the attempt to conceal 12 years worth of government bond trading losses from federal regulators before the Japanese bank revealed the coverup last summer.
Tsuda, 55, pleaded guilty in April to one count of conspiracy to defraud government regulators. He admitted helping the bank hide losses run up by Toshihide Iguchi . . .
Iguchi pleaded guilty nearly a year ago to charges that include misapplication of bank funds, money laundering, and conspiracy. . . .
* * *
Daiwa Bank pleaded guilty on Feb 2 to conspiracy charges, paid a $340 million fine and closed down its US operations. The fine was the largest ever against a financial institution in this country on criminal charges. . . .
* * *
See also: Goldman Sachs; Nomura Securities; Sumitomo Bank; Yakuza.
Dixie Mafia - From: The Secret Life of Bill Clinton:
. . . Banned by edict from smuggling drugs, the Italian American Mafia missed out on the most lucrative crime wave of the twentieth century. It was left to others to profit from the $100 billion a year market in cocaine, marijuana, and methamphetamines. Those best placed, by geography and criminal tradition, were the loose-knit groupings of the South, known to law enforcement as the “Dixie Mafia.” . . .
* * *
Less famous than the Cosa Nostra, the Dixie Mafia was, and still is, far more dangerous. During a ten year period from 1968 to 1978 when the Italian Americans were in the headlines for a spree of thirty murders, their redneck counterparts quietly dispatched 156 victims...
“There wasn’t a well from Mississippi to West Texas that didn’t have a dead body floating in it,” said Armistead. . . .
* * *
For more, go to > > > The Donkey Nests
For more: Rise UP! The Crimes of Mena
For more: Dubious Deals in Arkansas
See also: Lasater Group; Tyson Foods
See in Part I: Dan Harmon; Dan Lasater; Don Tyson.
Eagle Star - At last glance, a subsidiary of Zurich Allied.
From Conspirators’ Hierarchy:
. . . Eagle Star...is...important simply because it is owned by members of the Queen of England’s family and, as titular head of the Committee of 300, Eagle Star makes a tremendous impact. Eagle Star is more than a major “front” for MI6, it is also a Front for major British banks . . . It can be said with a great degree of accuracy that the most powerful British oligarchical families created Eagle Star as a vehicle for “black operations” against those who oppose Committee of 300 policies. . . .
See also: Committee of 300; Zurich Financial
Enron - From The Buying of the President (1996 ed), regarding contributions to Republican candidate, Phil Gramm:
The name of one company in particular might have caught Wendy Gramm’s attention: Enron. ...
It’s a fairly large company, based in Houston. Of all the companies that wrote to the CFTC (Commodity Futures Trading Commission) seeking the exemption (of energy derivative contracts from federal regulation), Enron was the biggest donor to Gramm campaigns, giving $34,100 over the years. . .
After taking actions that led to the exemptions from regulation, Wendy Gramm (wife of Phil Gramm and chosen by Ronald Reagan to head the CFTC in 1987) resigned on January 20, 1993, the day Clinton was inaugurated. Five weeks later, she was named to Enron’s board of directors. The part-time position pays her $22,000, plus $1,250 for each meeting she attends. In April 1993 the commodities commission voted 2 to 1 against regulating the business...
In its 1992 annual report, Enron calls itself the “manager of the largest portfolio of fixed-price and natural-gas derivative contracts in the world.” The company also has roughly $4.5 billion in interest-rate swaps, another exotic transaction that Wendy Gramm helped to exempt from deregulation while she was at the CFTC...
[A Catbird Note: Bishop Estate’s infamous McKenzie Methane deal was done in 1989 — during Wendy Gramm’s tenure as head of the CFTC. Hmmmm.]
* * *
Enron has another distinction — it is the #1 career patron of George W. Bush, Jr.
* * *
From The Buying of the President 2000:
. . . For three decades now, hundreds of electrical power, oil refining, and chemical plants have been pumping toxic particles into the air over Texas. These plants produce as much smog-forming nitrogen oxides as 18 million cars, making Texas the state with the largest volume of air pollution in the nation. The Texas Legislature passed the Texas Clean Air Act in 1971, but plants built before the law was passed don’t have to comply with its rules.
In December 1996, staff members of the Texas natural Resources and Conservation Commission (TNRCC), the state environmental agency, began meeting with representatives from eleven companies to talk about reducing the emissions of the plants that benefitted from the grandfather clause. But when it looked like the commission was moving toward eliminating the exemption for those plants, energy-industry executives balked and headed straight for the governor’s office.
On January 14, 1997, Bush’s environmental director, John Howard, told his boss in a memo: “Industry has expressed concern that the TNRCC is moving too quickly and may rashly seek legislation this session.”
In early March, Bush tapped Vic Beghini, an executive with Marathon Oil Co., and Ansel Condray, an executive with Exxon Corp., to come up with a plan to let the industry comply voluntarily with the state’s clean-air regulations. . . .
Beghini and Condray then presented the finished proposal at a June 19, 1997 meeting of about forty industry executives. In his notes of the meeting, James Kennedy of E.I. du Pont de Nemours and Co., the giant chemical manufacturer, wrote, “Amoco presented the paper to the group at the meeting as something that has been agreed to at high levels and was not subject to change.”
On March 31, 1998, Bush appeared at a press conference flanked by executives of Exxon, Amoco, and Texas Utilities, among others, to announce that 26 companies— representing 60 of the 831 pollution-producing companies in the state, had pledged to reduce emissions by 15,000 tons a year. “We’re committed,” Bush said, “to clean air in the state of Texas.”
But whether companies cut back on emissions didn’t really matter to the governor or to the industry. ... “The concept paper has no ‘meat’ with respect to actual emissions reductions,” Kennedy wrote. . . .
As far as Bush was concerned, his voluntary compliance plan was already a rousing success, a model of public-private partnership good enough to take on the road to the presidential primaries. Three weeks after Bush announced that he was a candidate for President, his spokesman, Scott McClennan, boasted: “Governor Bush was the first governor in Texas to tell grandfathered industries, ‘It’s time to clean up.’ Voluntary programs are working in Texas.”
Well, not really. A study by the Environmental Defense Fund published six months after Bush’s press conference found that only three of the 26 companies had actually scaled back their emissions. (In 1999, under increasing public pressure, Bush finally signed a bill that forces power plants to cut their emissions in half by 2003.) . . .
* * *
A CATBIRD PONDERING > > > On May 17, 2000, I caught a curious Enron commercial on TV. The ad appeared to promote a unique idea that we should make BAND-WIDTHS — those invisible waves which we use to communicate with each other — a COMMODITY! As a commodity — don’t you see — these band-widths become things that can be bought and sold. And, Enron, I presume, would be one of the companies that manages this new-fangled portfolio of derivative contracts. Wow, what an exotic idea! A way to buy and sell something you can’t see or feel, and something we always thought just naturally belonged to everyone! Holy Capitalism, Batman, what a concept!
What next ... WATER? (If you think this is a joke, see World Trade Organization.)
* * *
See also: Commodity Futures Trading Commission; McKenzie Methane; World Trade Organization
See in Part I: George W. Bush.
Export-Import Bank - From The Progressive Review - Clinton Scandal Clips Part 15 —
Investors Business Daily reports: President Clinton’s appointee to a critical seat on the board of the Export-Import Bank has close ties to a crooked fund-raiser linked to China. China is Ex-Im Bank’s second largest customer.
During the Clinton years, the bank has given more than $5.5 billion in loans to China to help it buy U.S. technology and equipment for power plants and other projects. The loans were OK’d despite proof that China sold nuclear-related equipment to Pakistan and other countries that worry U.S. security experts. The White House hopes the Senate will quickly confirm D. Vanessa Weaver to fill one of three vacant seats on Ex-Im’s five-member board. ...
Weaver and [John] Huang exchanged at least 26 phone calls over a 17-month period in 1994 and 1995, records show. ...
With administration approval, AT&T sells its secure communications system to the Chinese Army. Thus the Chinese Army gets the secure communications equipment that even the American public can’t. The Chinese call it “Hua Mei.”
Further, the Chinese reconfigure the Hua Mei technology and re-export it to Iraq where it is used for air defense against US aircraft.
While Huang’s name has not been directly linked to this project, it was the sort of thing his Chinese bosses were up to. Among those who were involved along the way was William Hambrecht, a major investor in Salon magazine, former Defense Secretary William Perry, and former Senator Adlai Stevenson. . . .
See also: AT&T
Farmers Insurance - A subsidiary of Zurich Financial.
See also: Zurich Financial
For much, much more: tripod.com
Federal Reserve Board - From Corporate Predators, by Russell Mokhiber and Robert Weissman (with an introduction by Ralph Nader):
BOOM AND BAILOUT
So, you’re John Meriwether, the bond trader who was forced to leave Salomon Brothers in 1991 after a trading scandal.
And you leave to start Long Term Capital. And for the first couple of years, you are making 30 percent return on investment for your millionaire friends. And they are loving it. And then you lose the $4 billion.
Who do you call?
The Federal Reserve Board— bailout central.
So it was that on a late August day, New York Federal Reserve Bank President William J. McDonough received a phone call from Meriwether and bailout fix-it man supreme David W. Mullins, Jr, the architect of the bailout of the savings and loans under President Bush.
Big institutional investors in the hedge fund--Merrill Lynch & Co., Goldman Sachs & Co., Bear, Stearns & Co., and Bankers Trust Corp— were also calling begging for a bailout.
These companies were of course seeking to save their own skin. But McDonough put forth the official spin before a House of Representatives Committee earlier this month.
“Everyone I spoke to that day volunteered concern about the serious effect the deteriorating situation of Long Term Capital could have on world markets,” McDonough said.
Ah, yes, world markets. And so McDonough calls Fed Chair Alan Greenspan and Treasury Secretary Robert Rubin and a bailout is arranged.
Former Lehman Brothers partner and current financial columnist Michael Thomas is right— it was improper for the Federal Reserve to arrange a private bailout. If Merrill Lynch and Goldman Sachs want to protect their behinds by arranging for a private bailout, fine. But the Fed should have stayed out of it.
Or, as former Fed Chair Paul Volcker asked in a speech, “Why should the weight of the Federal Government be brought to bear to help out a private investor?”
“Capitalists now all want it one way,” Thomas says. “They want to do whatever the hell they feel like, but let someone else pay. It’s called privatizing the profits and socializing the risks.”
Hedge funds, which make complicated financial bets with millions and billions of borrowed dollars and are almost totally unregulated, do indeed pose risks to the economy. Because of the nature of their gambles, they can lose huge amounts of money, leaving investors holding the bag (absent a bailout).
Even worse, they leverage borrowed money to exert extraordinary influence over markets, and cause serious problems when they overreact en masse to new fads. (That’s a big part of why the value of the dollar has plunged recently, for example.)
But these are reasons why hedge funds must be subjected to regulatory discipline— not an argument for why high rollers deserve government-orchestrated bailouts.
With the global financial system in frenetic disarray, Long Term Capital is not likely to be the last financial player to go bust. If the government is not able to act quickly to rein in hedge funds and other unbridled financial activities, it should at least declare that no bailouts will follow ... Each bailout makes the next one more likely, as investors are given implicit assurances that they will not have to face the down side of risky bets gone bad.
The gamblers in Atlantic City don’t get this kind of treatment. Neither should those on Wall Street....
Freeport-McMoRan Copper & Gold Inc. - From AFL-CIO Executive Pay Watch:
. . . Human rights monitors allege the company has assisted the Indonesian security forces in quelling anti-Freeport demonstrations by local indigenous groups.
“For years, Papuans saw the Indonesian military coming in Freeport helicopters, boats, trucks and Jeeps,” says an American missionary. The Indonesian military has bombed, strafed and burned hundreds of villages in an effort to stop rebels— many armed only with bows and arrows— from the Free Papua Movement.
From Corporate Predators: The Suharto--U.S. Corporate Connection . . . The sudden exit of Suharto from the Indonesian presidency has cast the international spotlight on the crony capitalism that enabled Suharto and his family to amass a fortune estimated to be on the order of $40 billion.
Bribery and graft, sweetheart government contracts, government-protected monopolies and a host of other schemes made the Suharto family and a small coterie of close friends into billionaires.
Much less noted are the ways in which the Suharto regime facilitated super-profitmaking by foreign multinational corporations which eagerly accepted benefits and protections from Suharto’s brutal dictatorship.
Foreign multinational corporations benefitted from the twin pillars of the Suharto economic program: unsustainable extraction of Indonesia’s rich natural resources and unabashed exploitation of poor, unorganized Indonesian workers.
Consider the New Orleans-based Freeport McMoRan, which operates the world’s largest gold mine and third largest copper mine in Irian Jaya, the Indonesia side of the island of New Guinea.
The company has ripped the top 500 feet off Puncuk Jaya Mountain, sifting through the dirt for copper and gold. After crushing the ore, mixing it with water and dousing the mix with chemicals to bring the metals to the surface, Freeport dumps the resultant waste rock-- more than 100,000 tons a day— into mountain rivers.
Those rivers are the lifeblood of downstream communities of thousands of indigenous people. Environmentalists and the indigenous people themselves charge the rock waste has poisoned the water, killing fish and the riverside forest and making massive flood plains inhospitable to crops. Freeport denies the charges.
But the Amungme and Komoro peoples are angry enough to have organized ongoing protests. The Indonesian military has met those protests with an iron fist, beating, torturing and killing many of the indigenous protesters. Freeport denies any responsibility for the military’s human rights abuses of the protesters, and also denies charges that it has assisted the repression.
The Freeport-McMoRan controversy is typical of resource controversies in Indonesia, with local communities fighting against pillage of their resources and pollution of their lands and water by big national and multinational mining, oil and timber companies operating with the protection of the Indonesian military. . . .
See also: Bishop Estate; Lippo Group; Panin Group; Xiamen International Bank.
Fuji Bank - From Compromised - Clinton, Bush and the CIA: . . . Under Bill Clinton’s leadership, Arkansas has set in place permanent money-laundering industry concealed as their everyday municipal bond business. They do not care where funds come from, in fact, dirtier is better. . .
Regardless of the method used by the money launderer, the common denominator is finding a bank or financial institution along with people in a position of power who are willing to break the law and not ask questions. Money laundering, by definition, involves commingling clean and dirty funds and making both indistinguishable. Arkansas offered this environment under the umbrella of its cooperative bond business.
An example of this is the deposit of $50 million offshore by the Arkansas Development and Finance Authority (ADFA) with Fuji Bank, Ltd., in the Cayman Islands on Dec 29, 1988. This was a very strange transaction, indeed, for an organization chartered and founded on lending money for investment and development within Arkansas, not for moving large sums of funds offshore.
Fuji Bank’s name reappears as the bank that purchased the industrial development loan of POM, Inc., the parking meter company in Russellville, Arkansas, owned and operated by the Ward family . . .
By purchasing the loan from First American Bank of Memphis, Tenn., Fuji effectively retired the loan, and the Ward family presumably continued making their payments directly to Fuji. This was curious behavior on behalf of POM, since they were giving up a long-term, fixed-rate, low-interest loan issued by ADFA, which had a guarantor, the bank in Memphis, to back it up.
Curious behavior, indeed, to forfeit a loan that has a co-signor, since this action would normally reduce a company’s line of credit. Unless, of course, the objective was to move the loan offshore, where repayment ledgers are nearly impossible to attain.
Webb Hubbell, Hillary Clinton’s law partner, was POM’s corporate attorney at the time.
ADFA, being a state authority, is not legally required to publicly divulge its records. And, therefore, the millions of dollars that flow through the Arkansas agency’s coffers can be shrouded in secrecy...
For more, GO TO > > > James Nicholson vs. Harmon - Witness: V.K. Durham
Gap Inc. - From Executive Pay Watch:
. . . The Gap is the largest importer of goods from Saipan, a U.S. protectorate in the Western Pacific.
According to Labor Sec. Alexis Herman, shifts run 12 hours a day, seven days a week; workers sleep behind barbed wire in small barracks.
Litigation against the company alleges that garments labeled “Made in the USA” are produced in sweatshops by workers in indentured servitude. The Gap is one of a handful of retailers that has refused to settle the lawsuit.
* * *
Saipan is not the only Gap location in which human rights monitors have observed sweatshop working conditions.
In Russia, Gap factory workers are paid the equivalent of 11 cents an hour and kept in conditions close to serfdom, according to Global Exchange.
In China, the Asia Monitor Resource Center has received complaints from Gap workers who are forced to work overtime and are cheated out of their pay.
In Honduras, the National Labor Committee reports Gap workers are subjected to forced pregnancy tests, forced overtime and locked bathrooms— for wages of $4 a day....
For more, GO TO > > > Broken Trusts
General Electric - The world’s most valuable corporation.
From Corporate Predators:
. . . Meet Neutron Jack Welch. He is the chief executive officer of General Electric, the world’s most valuable corporation. Perhaps America’s most ruthless manager, Welch puts profits above human and community concerns. . . .
Enter Thomas O’Boyle. O’Boyle, a former Wall Street Journal reporter and current assistant managing editor at the Pittsburgh Post-Gazette, has written a hard-hitting expose titled “At Any Cost: Jack Welch, General Electric and the Pursuit of Profit” (Knopf, 1998), in which he raises the question--”Is profit and return on investment all we should care about?”
To which he answers, “Of course not.” But this simple question, and obvious answer, has shaken the business media out of its complacency. . . .
O’Boyle “spent six years researching and writing a negative book and all he hound was a handful of former employees who supported his biased view,” GE’s Bruce Bunch told us.
Actually, O’Boyle found much more than that, which is why GE’s lawyers put O’Boyle through the wringer during the writing of the book.
“This was a very contentious project from the start,” O’Boyle said. “GE has made many complaints during the course of the writing of this book.” . . .
When asked whether GE’s lawyers contacted O’Boyle during the writing of the book and raised concerns about it, GE’s Bunch at first said “that’s not anything I would comment on, one way or the other.”
A day later, he called back and said that GE contacted the publisher during the writing of the book because “we were concerned that the book would be libelous or biased.” . . .
Why is GE so concerned about this book?
Other books have been written about Welch, but all give him glowing reviews. This is the first to link Welch’s policy’s to the disastrous scandals that have struck the company in recent years.
Over 17 years as CEO, Welch eliminated hundreds of thousands of jobs, bought and sold hundreds of businesses, and shifted the company’s focus from manufacturing to entertainment, O’Boyle reports.
During the same period, the company was caught in a web of scandals including defective refrigerators brought to market, industrial wastes improperly buried, excessive radiation in the workplace, fraud in military contract procurement, and the Kidder, Peabody financial disaster— all reported in detail in the book.
O’Boyle writes that to many of the people who worked at General Electric, “the connection between the severity of Welch’s demands and the occurrence of repeated scandal was a clear cause and effect, as transparent as glass.”
GE’s public recklessness is paralleled by a private recklessness that O’Boyle details in a chapter on GE Plastics, the division where Welch started his career.
“Extravagance was a way of life at GE Plastics,” O’Boyle reports. “Like Welch’s Phi Sigma Kappa college fraternity, which threw the wildest parties at the University of Massachusetts, Jack’s boys at Plastics were a wild fraternity.”
According to O’Boyle, one attractive woman who interviewed for a job at GE Plastics in 1973 recalls being asked, “Would you f--- a customer for a million-dollar order?” The woman walked out of the interview. . . .
For years, GE has told us they bring “good things to life.” Now O’Boyle has written a book that presents the dark underside of a premiere criminal recidivist corporation. . . .
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For more, GO TO > > > General Electric; The Donkey Nests
See in Part I: Hillary Clinton; Jack Welch; Ron Brown; William Clinton
Goldman Sachs - The Goldman Sachs Group is a leading global investment banking and securities firm with three principal business lines: Investment banking; Trading and Principal Investments; and Asset Management and Securities Services. (Take a deep breath and hold your nose before you tour this gilded cage — the newspaper cage-liner hasn’t been changed in decades!)
The Catbird Chronicles: Goldman Sachs
1979 - Goldman Sachs is found guilty of fraud in the Penn Central Railroad failure.
1985 - Sumitomo acquires the Tokyo-based Heiwa Sogo Bank, leading to their ascent to the number one position in Japan’s banking industry — assisted by the then-Finance Minister Takeshita Noboru and the Yamaguchi Gumi, Japan’s most powerful Yakuza syndicate.
1985 - Ichiwa-kai — a Yakuza faction — slaughters Yamaguchi Gumi leader, Masahisa Takenaka, creating a bloody gang war.
1986 - Robert Freeman makes his infamous “insider trading” deals relating to Beatrice Foods — trading for Goldman Sachs as well as his own personal accounts, leaving both in dire straits.
1986 - Sumitomo acquires 12.5% of Goldman Sachs for $500 million.
1986 - The notorious Arkansas Development Finance Authority (ADFA) borrows $5 million from the Chicago branch of Japan’s Sanwa Bank as a part of a $60 million deal to purchase stock in Coral Reinsurance, a Barbados subsidiary of American International Group (AIG). The deal is brokered by Goldman Sachs, whose head at the time was Robert Rubin. An AIG affiliate had also managed over $1 billion worth of ADFA bonds.
1989 - Robert Freeman pleads guilty to one count of insider trading and is later sentenced to one year in prison (with 8 months suspended), and fined $1.1 million.
1990 - Steve Friedman and Robert Rubin are named senior partners and co-chairmen of the management committee of Goldman Sachs.
1992 - Bishop Estate trustees invest $250 million of the trust’s money in Goldman Sachs.
1993 - Robert Rubin, worth an estimated $100 million at the time, resigns Goldman Sachs to join the Clinton administration. Rubin makes a phone call to Bishop Estate and the estate “insures” Rubin’s stake in Goldman Sachs for $100,000 a year — a “sweetheart deal” for Rubin according to some sources. Kenneth Brody, a Goldman Sachs general partner until 1991, is appointed by Clinton to be chairman of the Export-Import Bank.
1994 - Bishop Estate invests another $250 million of the trust’s money in Goldman Sachs.
1994 - The peso crisis in Mexico comes to a head. Robert Rubin had spearheaded Goldman’s move into Mexico, and the firm had steered billions of dollars to that emerging market. Rubin’s one-year recusal from dealing in matters affecting Goldman Sachs had ended. By helping Mexico make good on its commitment to bondholders, the $20 billion portion of the bailout was viewed by some as a publicly-financed insurance policy for Rubin and Goldman Sachs, along with other large investment houses and banks that were highly exposed in Mexico.
1996 - One time king of copper trading, Yasuo Hamanaka, is arrested on charges of forgery relating to the loss of $2.6 billion by Sumitomo Corp. in a decade of fraudulent copper trading.
1996 - Bishop Estate lends $1 million to Charles M. Harmon, Jr., an investment banker and former general partner at Goldman Sachs. Together with Larry L. Landry, chief investment officer of the MacArthur Foundation, and Brad Heppner, a consultant at Bain & Co. and former director of private investments at the MacArthur Foundation, they form The Crossroads Group to purchase Bigler Investment Management, a Connecticut firm that manages fund-of-fund accounts. Bigler’s clients included: Connecticut State Treasury; Massachusetts’ Pension Reserves Investment Management Board; Rhode Island Employees’ Retirement System; City & County of San Francisco Retirement System; and the pension funds of E.I. duPont de Nemours & Co.
1997 - Hawaii’s Attorney General, Margery Bronster, begins investigation of allegations of fraud and corruption at Bishop Estate.
1998 - Two of Japan’s leading banks, Sumitomo Bank and Bank of Tokyo-Mitsubishi (BTM) are implicated in bribery scandals involving officials at Japan’s powerful Ministry of Finance.
1999 - Goldman Sachs goes public. No mention is made in the IPO documents prepared by PricewaterhouseCoopers of the scandals that are plaguing Bishop Estate and Sumitomo Bank.
1999 - Rubin resigns as Treasury Secretary, and joins Citigroup a few months later.
1999 - Bishop Estate trustees Richard Wong and Henry Peters are indicted for fraud. Trustee Lokelani Lindsey is sued by fellow trustees Oswald Stender and Gerard Jervis, who demand her removal for mismanagement. Gerard Jervis is caught having sex with a female subordinate in the men’s restroom of the Hawaii Prince Hotel. The female employee commits suicide the next day. Jervis attempts suicide the next week. The court removes Lindsey as trustee. All trustees are temporarily removed from office after the IRS gives an ultimatum that Bishop Estate will lose its tax-exempt status unless the trustees are removed. All five trustees permanently resign.
2000 - Lawsuits continue against Bishop Estate, now renamed Kamehameha Schools. Former trustee, Oswald Stender, brings a lawsuit against the State of Hawaii for failure to act earlier to curtail corruption at the estate.
2000 - March. Goldman Sachs takes public World Online International NV, a Dutch Internet access provider. Goldman did not disclose that the internet firm’s chairwoman had sold much of her stock before the IPO. The shares have fallen 65% from their sale price. Litigation is likely.
2000 - April. Goldman Sachs may be disqualified from arranging Nippon Telegraph & Telephone Corp.’s planned $13 billion share sale because of the soured IPO of World Online International NV. Japan’s Ministry of Finance said it may bar Goldman, the No. 1 underwriter of Asian equities during the first quarter, from managing the sale of 1 million shares held by the Japanese government in NTT, in what is set to be one of the world’s largest stock offerings.... For More GO TO > > > Dirty Gold in Goldman Sachs
Hanford’s Creations, Inc. - A company that makes Christmas decorations. Owned by Elizabeth Hanford Dole before she sold it to a group headed by Bishop Estate.
See also: Bishop Estate; PricewaterhouseCoopers.
And in Part I: Elizabeth Dole; Mark McConoghy
Honeywell International - From AFL-CIO Executive Pay Watch: . . .
AlliedSignal changed its name to Honeywell International after it acquired it manufacturing rival in Dec 1999.
“Back at old Honeywell, there was a culture that took care of the employees and the community,” explains stock analyst Nicholas Heymann . . . After the merger, the new Honeywell announced it would increase job cuts from 3,500 to 8,000 in the year 2000.
As head of the USA-NAFTA corporate coalition, [CEO Lawrence] Bossidy stated on national television that if NAFTA passed he did not anticipate the export of additional American jobs to Mexico.
Two years after passage of the free trade agreement, AlliedSignal had the largest number of petitions at the U.S. Dept of Labor from workers displaced by NAFTA. . . .
Hong Kong and Shanghai Bank - From Conspirators’ Hierarchy:
. . . John R. Petty is president and chairman of the Marine Midland Bank — a bank whose drug trade connections have been well established long before it was taken over by the Hong Kong and Shanghai Bank, probably the number one bank in the opium trade, a position it has held since 1814. . . .
See also: Marine Midland Bank; Xerox Corporation
Hughes Electronics - From Betrayal--How the Clinton Administration Undermined American Security, by Bill Gertz:
President Clinton has turned upside down President Dwight D. Eisenhower’s warning about a too-powerful military-industrial complex. Using the end of the Cold War as cover, and to please corporate bigshots targeted for campaign contributions, Clinton has loosened export controls on several high-technology sectors, including U.S. high-speed computer manufacturers, software makers, and communications satellite makers who want to sell to China....
Two such companies are Loral Space & Communications, Ltd. and Hughes Electronics, both the subject of a federal investigation to determine how they passed embargoed militarily-useful rocket technology to Beijing without licenses....
Hughes was headed by C. Michael Armstrong, who was named head of the influential President’s Export Council after lobbying vigorously — and successfully — for the easing of U.S. National security export controls. Shortly after the “decontrols” took place, American supercomputers began showing up in both Chinese and Russian nuclear weapons development centers — helping to build nuclear arms that might one day be turned against the United States.
* * *
For more, go to > > > The Donkeys Nests
See also: American International Group; CITIC; General Electric; Goldman Sachs; Hughes Electronics; Lippo Group; Lockheed Martin; Loral Space Systems; Panin Group
And in Part I: Al Gore; Diane Feinstein; Willie Brown; William Clinton
Intertek Testing Services - From New York Times, 9/23/99: . . . Federal authorities said that thousands of environmental safety tests at Superfund locations, landfills and other hazardous waste sites between 1994 and 1997 will have to be repeated because the company that performed the tests falsified the results.
The phony test results mean that some sites thought to be safe from carcinogens and other contaminants might hold chemicals or other harmful materials, the federal authorities said. . . .
Federal prosecutors announced on Thurs that 13 former employees of the London-based company, Intertek Testing Services, were indicted by a federal grand jury in Dallas and charged with up to 30 counts of fraud and lying to the government. Prosecutors said the test results were falsified to save the company time and money.
All 13 employees worked for an Intertek subsidiary, Environmental Laboratories, in Richardson, Texas. But documents unsealed on Thursday also show that former employees have told investigators that similar problems existed at the subsidiary’s laboratory in Houston.
The most senior Intertek official indicted was Martin Dale Jeffus, 52, of Greenville, Texas. . . . If convicted on all counts, Jeffus could face as much as 155 years in prison and a $7.5 million fine, prosecutors said. . . .
Intertek tested soil, water and air samples for carcinogens and other toxins, mostly for environmental consulting and engineering firms and for the federal government and state governments. . . .
From Jan 1994 to Dec 1997 ... the company performed tests on more than 59,000 sample projects, including many from Superfund sites and military facilities, generating $35.7 million in billings. . . . One EPA official said it was likely more than 1,000 sites are involved. . . .
“The tests were falsified on a grand scale,” said Paul Coggins, the US atty for the Northern District of Texas. “None of the data coming out of this Richardson lab can be relied on. Too many employees and ex-employees have told investigators that the falsifications were routine and commonplace. . . .”
* * *
From Honolulu Star-Bulletin, 9/23/00: Pearl’s Safety Test Data May Be Phony: . . . Environmental safety testing at the Navy’s Superfund cleanup site at Pearl Harbor was performed by a Texas laboratory, where former employees have told federal investigators that work performed from 1994 to 1997 was falsified. . . .
* * *
Catbird Comment: My crystal egg says that this is only the tip of a tail-feather. Improper expenditures of federal Superfund monies has been suspect for decades, with critics saying that the billions of dollars were being spent largely on attorneys and litigation costs, with little going to the actual clean-up. It seems now that millions are also going to companies for fraudulent and worthless tests. My crystal egg also says that the major reason for this is not to cut costs, but to sell the government and huge corporations a “clean” report. This enables these entities to get away with not cleaning up the sites, thus saving billions of dollars in clean-up costs — but costing the local citizens billions in health care costs, illnesses and deaths. (09/24/00)
Recommended Movie: Erin Brockovich
Investors Equity Life Insurance Company - From the Honolulu Star-Bulletin, 10/14/96:
. . . The State of Hawaii will become the owner of thousands of acres of Colorado real estate, in its ongoing effort to recover assets for the 13,000 policy-holders of failed Investors Equity Life Insurance Co. . . .
Gary Vose, who was chairman of Investors Equity when the state took it over in June 1994, has agreed to hand over The Meadows, a 4,000-acre subdivison at Castle Rock, Colo, to Hawaii Insurance Commissioner Wayne Metcalf...
Metcalf and the previous insurance commissioner, Lawrence Reifurth, have been working to recover assets since the state seized the insurance company after its management had run up a $60 million deficit. . . . The deficit, which has since grown to more than $90 million, was incurred largely because Vose lost policy-holders’ money in highly speculative leveraged investments known as derivatives, the state charges. . . .
Vose’s agreement to transfer The Meadows and a smaller subdivision settles the state’s lawsuit against him, Eugene Sprague, an attorney in Denver representing the Hawaii Insurance Division, said today. . . . Neither Vose’s attorney nor Metcalf could be reached for comment, so it was not immediately clear what the value of the Colorado properties might be. Sprague said he could not go into details because of a confidentiality agreement....
The Meadows was the brainchild of former savings and loan executive Charles Keating and was put up for auction after Keating’s Lincoln Savings & Loan Association became insolvent....
The state alleged that Vose then used $23.3 million of Investors Equity’s money, through one of his affiliated companies, to acquire the property in 1992....
In a civil suit, the state accused Vose of racketeering, fraud and other misconduct in buying The Meadows. The suit alleges that the holding company that controlled Investors Equity conducted sham real estate deals and used the insurance firm’s assets to pay huge fees to Vose and companies connected with him....
ITT Hartford Life Insurance Co. early this year acquired the Investors Equity policies, keeping them alive. A state insurance fund (i.e. US Taxpayers) contributed $10 million to boost the value....
* * *
[A little bird told me: Controlling interest in Honolulu Federal Savings & Loan (HonFed) was purchased in the early 90's, by Bishop Estate and former U.S. Sec. of Treas. William Simon. HonFed was marketing variable annuities through Investors Equity, largely to elderly people as part of their retirement plans. Such high risk derivatives were generally considered inappropriate investments for life insurance companies by the Hawaii Insurance Commissioner’s office. According to a reliable source, however, Investors Equity had obtained a letter from then-Insurance Commissioner, Robin Campiano, giving the o’k to Investors Equity/HonFed to invest in these instruments. (Shortly after leaving his government position, Campiano would be hired as president of AIG Hawaii, a subsidiary of American International Group.) Investors Equity purchased these derivatives through Goldman Sachs, among others. Bishop Estate was a major investor in Goldman Sachs. HonFed was sold to Bank of America in the mid-90's, and Bishop Estate and Simon made millions. Bank of America got caught holding the hot potato since they had purchased HonFed’s liabilities along with the assets.]
* * *
[Catbird Ponderings: . . . Isn’t it a little strange that the State of Hawaii settled its case against Gary Vose so quickly by agreeing to accept The Meadows property — which had been purchased with investors’ money to begin with? And since the state was accusing Vose of racketeering, fraud and other misconduct, why was this only a civil suit, with no criminal charges ever being made? And isn’t it odd that there was a confidentiality agreement in this case, when it involved policy-holders’ and taxpayers’ money? Obviously, the value of The Meadow’s property was insufficient to cover Investors Equity’s losses, but why keep the value secret? And why settle with Vose when the recovery process from Goldman Sachs and others had barely begun? Hmmmm.]
* * *
For more, GO TO > > > Vultures In The Meadows
Irish Republican Army (IRA) - See: Bank of Boston.
KDP Technologies - From Equity No. 2048 - 2nd Amended Petition of the Attorney General to Remove and Surcharge Trustees:
. . . In early 1997, the Trustees (of Bishop Estate) agreed to invest up to $2 million of Trust assets in a start up company, KDP Technologies, LLC (KDP-Tech) . . . The Trust assets were invested through KDP Limited (KDP-Trust), a subsidiary of Royal Hawaiian Shopping Center, in turn a for-profit subsidiary of the Trust. . . . [Lokelani] Lindsey served as president, vice president, and director of KDP-Trust. . .
At the time the Trustees decided to invest in KDP-Tech, it was in the pre-operational stage and was developing two Internet applications: (1) STAR*BOOK, an on-line database of videos depicting models and other entertainment industry “talent”; and (2) LOVE MATE, an on-line database program to be used by dating services. . .
Lindsey suggested that the Trust invest in KDP-Tech based on her acquaintance with a principal of KDP-Tech. The acquaintance was a co-investor with Lindsey in a speculative, failed personal investment. . . . The Trust wired $500,000 to KDP-Tech on July 2, 1997. . . . This investment was made without adequate due diligence and in disregard of an internal staff report. KDP-Tech was managed by principals with no proven business track records, was a highly speculative start up company, and the soft-porn nature of the investment was not suitable for a charitable educational Trust. . .
Within a week of the Trust’s initial investment of $500,000, KDP-Tech began negotiating a consulting agreement with (Trustee Richard) Wong’s brother-in-law, Randy Stone. . . . KDP-Tech entered into a consulting agreement with Randy Stone as of July 15, 1997. KDP-Tech agreed to pay Randy Stone $150,000 a year and to grant him options to purchase interests in STAR*BOOK. . .
Within a few months of the Trust’s investment, KDP-Tech had serious financial and managerial problems . . .
On October 23, 1997 Richard Wong, president of Royal Hawaiian Shopping Center (and not the same person as Trustee Wong) wrote to (Trustee Henry) Peters informing him of the need to pay Randy Stone $50,000 to keep the company operational. . . .
Peters arranged for KDP-Trust to loan KDP-Tech $105,000, and KDP-Tech then paid $50,000 of the loan proceeds to Randy Stone. The loan has never been repaid. . .
KDP-Trust continued to advance Trust money to KDP-Tech until its treasurer, Lindsey’s acquaintance, was indicted for federal mail fraud and money laundering crimes (for which he was subsequently convicted and sentenced). . . .
Peters and Wong used their positions as Trustees to help Wong’s brother-in-law, Randy Stone, obtain a consulting contract from KDP-Tech and to secure payment of Randy Stone’s consulting contract with Trust funds from KDP-Trust. . . .
See also: Bishop Estate;
And in Part I: Henry Peters; Richard Wong; Lokelani Lindsey; Randy Stone; Jeffrey Stone.
Lasater & Company - From Compromised: Clinton, Bush and the CIA:
. . . The magnitude of the Agency’s (CIA) cash flow through Arkansas, which Reed witnessed firsthand in the mid-1980s, would not be revealed to any major degree until years later. It was not until 1994 that Independent Counsel Robert Fiske, named to investigate the Whitewater affair, stumbled across a man in hiding who, himself, had not fully realized that he had been a conduit for money laundering on a massive scale.
This man, Dennis Patrick, had been a pawn in the Agency’s money-laundering scheme, which had routed over $109 million through Patrick’s bond-trading account managed by Dan Lasater and his firm, Lasater & Company in Little Rock. . . .
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For more, GO TO >>> The Donkey Nests
For more >>> Dubious Deals in Arkansas
For more >>> Rise UP! The Crimes of Mena
For more >>> Arkansas Justice. The Case Against Dan Harmon
For more >>> Big News from Arkansas
For more >>> Clinton Scandal Clips
Lippo Group - Indonesian conglomerate owned principally by the Riady family.
From Betrayal - How the Clinton Administration Undermined American Security, by Bill Gertz:
Who was the biggest contributor to the Clinton-Gore ticket in 1992? Not a corporation, not a labor union, not a Hollywood mogul, but Indonesian businessman James Riady and his wife, who gave $450,000 to elect Bill Clinton. . . .
During the final weeks of the campaign, the Riady family, its associates, and executives at Riady companies gave an additional $600,000 to the DNC and Democratic state parties. . . .
The patriarch of the business empire is Mochtar Riady . . .
Of his three sons, James was a permanent resident of the United States, Stephen was educated here, and Andrew worked in California . . .
All, however, have fled the United States. Any Riady employee with detailed knowledge of the family’s activities in the United Stated has likewise stolen away in the night. Even James Riady’s secretary has vanished. Only John Huang, the family’s former U.S. operative, remains in the United States -- and he has pleaded the Fifth Amendment . . .
The Riady empire, centered on its Lippo Group, is, as one financial analysis in Jakarta describes it, “a carefully balanced house of cards.”
Newsweek has noted, “Moving cash around the globe in tangled webs of transactions has always been the Riady way,” and the Asian Wall Street Journal accuses the Riadys of “ramping” -- buying large numbers of shares in their own companies in order to support prices. . . .
In 1977, Mochtar Riady tried to buy the National Bank of Georgia. He failed, but one of the brokers in the deal was Jackson Stephens of Little Rock, Arkansas, who tried to interest a disappointed Riady in joining Stephens, Inc., one of America’s largest private investment banks ... and one with which the Riadys would have an extended relationship, as we will see. Mochtar Riady agreed, and his son James, then aged twenty, arrived to intern at Stephens, Inc. . . .
Through Jackson Stephens, James Riady met a rising politician, Arkansas Attorney General Bill Clinton. Thus began a friendship that has lasted twenty years, and has spread a web of intrigue, financial corruption, and foreign influence into American government. . . .
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For More, go to > > > The Donkey Nests
For More > > > Clinton Scandal Clips
Lockheed Martin - From The Laundrymen:
...Crooks aren’t the only ones who launder money.
Corporations do it to avoid or evade taxes, to defraud their shareholders, to get around currency control regulations, and to bribe prospective clients. . . .
The Lockheed Corporation laundered $25.5 million through a Liechtenstein trust to pay off Italian politicians.
Lockheed also subscribed to the laundry facilities of Deak-Perera, then an important American foreign exchange dealer, to bribe Japanese politicians.
As Lockheed’s behest, Deak put $8.3 million into the washing cycle, then brought it out in 15 untraceable payments to a Spanish priest in Hong Kong, who hand-carried the cash in flight bags and orange crates to Lockheed’s customers in Tokyo. . . .* * *
In June, 2000, it was announced that Secretary of Commerce William Daley was resigning his post to become AL GORE’S campaign manager. (Like being Gore’s campaign manager is more important to the country’s welfare than his job as Secretary of Commerce?)
A few days later, it was announced that PRESIDENT CLINTON had named NORMAN MINETA his choice for the new Secretary of Commerce.
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NORMAN MINETA, a former California congressman, later became a
LOCKHEED MARTIN executive and lobbyist.
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For more >>> The Graft and Greed at Lockheed Martin; James Nicholson vs. Harmon - Witness: Norman Mineta; Birds in the Lobby; Confessions of a Whistleblower; The Donkey Nests; Could a Traitor Do Any Worse Than Clinton?; Tenacious Tentacles; China Working Group; The Vultures in Maunawili Valley
Long Term Capital Management - Go to >>> The Donkey Nests!
See also: Federal Reserve Board
Loral Space Systems - From Year of the Rat, by Edward Timperlake and William C. Triplett II:
In the early morning hours of February 15, 1996, a Chinese Long March 3B space launch rose a short distance off the launch pad and then fell over onto a local village with an incredible explosion. According to an Israeli engineer who witnessed the disaster, “thousands of corpses were loaded in dozens of trucks and buried in mass graves.” A COSTIND spokeswoman denied the Israeli’s charge. . . . But an American aerospace official we interviewed at the time confirmed the Israeli’s account. . . .
Loral Space Systems, the builder of the February 15 satellite, had a problem. So did the Chinese launchers, who had such a poor reputation for reliability that they were uninsurable. Without insurance, Loral and the other U.S. firms could not use Chinese rockets to launch their satellites. Something had to be done to make the Chinese rockets more reliable if the satellite makers were going to save a dollar or two on launch fees. . .
On April 14, 1998, the New York Times ran a major story by investigative reporter, Jeff Gerth — “Grand Jury Probes 2 Firms’ Ties to China Missile Program” — that linked Loral and its partner, Hughes Electronics, to China. . . .
* * *
To this date, Janet Reno still refuses to appoint a special counsel to look into the 1996 Clinton/Gore fundraising because “in her opinion” she sees no credible evidence that any wrongdoing was intentionally committed. Gore was merely unaware that the Buddhist temple affair was a political fund-raiser.
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NOW, IF ALL THIS IS NOT ENOUGH TO RUFFLE YOUR FEATHERS — ARE YOU AWARE OF THE FACT THAT FRANCE’S AXA FINANCIAL COMPANY IS THE NUMBER ONE INSTITUTIONAL INVESTOR IN LORAL SPACE AND COMMUNICATIONS . . .
AND THAT, AFTER MORE THAT A HALF-CENTURY, IT HAS FINALLY BEEN DISCLOSED THAT AXA FINANCIAL MAY HAVE OBTAINED MUCH OF ITS WEALTH AT THE EXPENSE OF NAZI HOLOCAUST VICTIMS!
AND DID YOU KNOW THAT AXA FINANCIAL IS ALSO THE NUMBER ONE INVESTOR IN GOLDMAN SACHS?
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For more >>> The Donkey Nests
For more >>> Tenacious Tentacles
For more >>> Could a Traitor Do Any Worse Than Clinton?
For more >>> Dan Burton’s Committee on Government Reform - Pled or Fled List
For more >>> John Chung Tells of Chinese Donations
For more >>> Tripping with Secretary Ron Brown
For more >>> China Working Group
Luso International Banking Limited (LIB), Macau - A wholly owned subsidiary of Xiamen International Bank (XIB), China.
Although XIB was set up in 1985, LIB was incorporated on Sept 28, 1974 in Macau. In 1975, it was acquired by Panin Group (renamed Min Xin Group in 1988), Hong Kong.
In Nov 1985, Panin Group, with three PRC-based institutions, namely, Industrial and Commercial Bank of China; Fujian Investment and Enterprise Corp (renamed Fujian International Trust & Investment Corp); and Construction and Development Corp of Xiamen Special Economic Zone (renamed Xiamen Construction and Development Corp, Ltd.) jointly founded XIB, the first joint venture bank in the People’s Republic of China.
Luso International Bank was injected as part of the capital to the bank, thus becoming a wholly-owned subsidiary of Xiamen International Bank.
In Nov 1991, XIB was joined by three more shareholders: Asian Development Bank; The Long-Term Credit Bank of Japan, Ltd.; and Sino Finance Group, Ltd.
See also: Bishop Estate; Lippo Group; Long-Term Credit Bank; Panin Group; People’s Republic of China; Sino Finance Group; Xiamen International Bank
And in Part I: Henry Peters; William Simon.
MacArthur Foundation - John D. MacArthur (1897-1978) was one of the three wealthiest men in America at the time of his death, and was sole owner of the nation’s largest privately held insurance company. One of seven children, he was born in an impoverished coal-producing area of eastern Pennsylvania. His three brothers who survived childhood all achieved success in their fields: Alfred in insurance; Telfer in publishing; and Charles MacArthur as a notable newsman, playwright, Hollywood screen writer, husband of Helen Hayes and father of Hawaii 5-0's “Danno,” James MacArthur. . . .
In 1935, John D. MacArthur borrowed $2,500 to acquire the financially impaired Bankers Life and Casualty Company of Chicago. Five years later, Bankers had more than $1 million of assets. At his death, MacArthur’s insurance companies had more than 3 million policyholders, with $5.5 billion of insurance in force.
In the 1960's, MacArthur’s attention turned to real estate and development. At one time or another, MacArthur’s holdings included 100,000 acres of land in Florida, primarily in the Palm Beach and Sarasota areas; several development companies and shopping centers; paper and pulp companies; 19 commercial, office, and apartment buildings in New York City; several publishing enterprises; hotels; radio and television stations; banks and 12 insurance companies.
According to its website, the John D. and Catherine T. MacArthur Foundation is a private, independent grantmaking institution dedicated to helping groups and individuals foster lasting improvement in the human condition. When the John D. and Catherine T. MacArthur Foundation began operations after the death of Mr. MacArthur in 1978, it inherited almost 100,000 acres of undeveloped land, mostly in Florida.
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From Philanthropy News Network, May 3, 1999: Foundations - Report:
Conservative think tanks spend big bucks. . . . The top 20 conservative think tanks will have spent more than $1 billion when this decade ends, according to a new report by the liberal-leaning National Committee for Responsive Philanthropy. . . .
The report ... says the largest 20 conservative think tanks have doubled their budgets since 1992, drawing contributions from corporations interested in affecting the political process. . . .
The NCRP says the groups have shown increasing sophistication in waging high-intensity intellectual and political battles over extended periods of time, better coordinating their activities with lobbyists in the private sector, political operatives in Washington and the states, and activists at the grassroots, the report says. . . .
But Herb Berkowitz, the vice president for communications for the Heritage Foundation, tells the Washington Post that liberal thinkers have their supporters, too. “If you look at the Rockefeller fund and the Ford Foundation and the MacArthur Foundation, you are talking about sums of money that dwarf the sums that they mention in their report.”
* * *
From: Pacific Business News, 8/12/96:
. . . Bishop Estate had quietly purchased the majority interest of a Connecticut specialized advisory business that manages almost $1 billion in assets.
Royal Hawaiian Shopping Center, Inc., a for-profit subsidiary of Bishop Estate, is a co-investor in the purchase of Bigler Investment Management, a Farmington, Conn., firm that manages fund-of-fund accounts. . . .
The purchasing entity, called The Crossroads Group, is expected to take on a much more aggressive money-management outlook. . . . Other investors in The Crossroads Group are parties that have had ‘long relationships’ with Royal Hawaiian . . .
Principals of The Crossroads Group are: Charles M. Harmon, Jr., an investment banker and former general partner at Goldman, Sachs & Co. in New York; Larry I. Landry, chief investment officer of John D. & Catherine T. MacArthur Foundation in Chicago; and Brad Heppner, a consultant at Bain & Co. in Dallas and former director of private investments at the MacArthur Foundation. . . .
All have prior experience with Bishop Estate. In 1993, the MacArthur Foundation, along with Duke University’s endowment fund, backed the formation of a Boston merchant bank called Orion Capital Partners LP. . . .
Harmon is familiar with Bishop Estate because the Hawaii trust owns 10 percent of Goldman Sachs. . . .
Bigler Investment Management’s fund-of-fund clients include Connecticut State Treasury . . .
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From The Hartford Courant, 10/29/99:
. . . The Texas-based managers of an investment fund ... say they lost a $100 million investment deal in 1998 because they refused a directive from then-Treasurer, Paul Silvester, to pay a finder’s fee to someone of his choosing.
Silvester had been negotiating a possible $100 million investment in the Crossroads Constitution Fund. The state already had $300 million invested in Crossroads dating back to 1987, when, during an era in pension deal-making, the Hartford-based Crossroads had a contract to pay millions in fees to a partnership involving Democratic power broker Peter G. Kelly. . . .
By the time Silvester began talking to Crossroads in 1998, the fund’s assets had been acquired by a group of Texas investors, who were not interested in forking over the kind of fees Crossroads had paid Kelly and his associates. So when Silvester told Crossroads representative Larry Landry that a fee would need to be paid, the new management at Crossroads said no. . . Last summer, Landry, a former chief investment officer of the philanthropic MacArthur Foundation, left Crossroads to set up the Westport Fund . . .
Silvester has alleged that he had arrangements with others to whom he steered fees, whereby they would kick back some of the money . . .
See also: Bishop Estate; Carlyle Group; Crossroads Group; Marsh & McLennan; WCI Communities; Westport Fund
And in Part I: Adele Smith Simmons; George W. Bush; Larry Landry; Paul Silvester.
Marine Midland Bank - From Conspirators’ Hierarchy: . . . John R. Petty is president and chairman of the Marine Midland Bank — a bank whose drug trade connections have been well established long before it was taken over by the Hong Kong and Shanghai Bank, probably the number one bank in the opium trade, a position it has held since 1814. . . .
See also: American Express; Committee of 300; Hong Kong and Shanghai Bank; Xerox
And in Part I: Sol Lonowitz
Marsh & McLennan Companies, Inc. - From the RICO lawsuit: Harmon v. Federal Insurance Co, Marsh & McLennan, Inc., Trustees of Kamehameha Schools/Bishop Estate, Pricewaterhouse Coopers, et al: . . .
Defendant Marsh & McLennan Companies, Inc. (M&M) is the world’s largest insurance brokerage firm that conducts business throughout the United States and in many foreign countries, and is a licensed General Agent for Federal in the State of Hawaii.
On or about May 25, 1994, Plaintiff, in his capacity as Risk/Insurance & Safety Manager for KSBE, obtained a Captive Management Fee Proposal from Peter Lowe, VP, M&M Insurance Management Services, Inc. (M&MIMS), which detailed their proposed services and fees for managing P&C. Their services were to be on a time and expense basis, with an estimated annual cost of around $70,000. There was no mention in this proposal that their related subsidiary, M&M, would charge an additional flat annual fee of $200,000 for providing “brokerage”, “risk management” or other purported services to the captive.
This proposal, the subsequent contract, and periodic invoices from M&MIMS and M&M were transmitted by mail and/or wire. Plaintiff relied upon this proposal, its costs and representations, as an inducement to contract for these captive management services. Plaintiff alleges that M&M’s failure to disclose in their proposal an additional flat annual fee of $200,000 constitutes wire fraud, mail fraud, fraudulent inducement and misrepresentation.
Defendants M&M and M&MIMS, their employees, Rocco Sansone and Peter Lowe, and others in their organizations benefitted financially from these excessive fees in the form of salaries, commissions, bonuses, or other manner of compensation. Plaintiff alleges that M&M’s acts in collusion with some or all of trustees of KSBE, with officers and directors of P&C, and with Federal constitutes a conspiracy to defraud P&C and the beneficiaries of the Estate of Bernice Pauahi Bishop; racketeering; mail fraud; wire fraud; extortion; and violations of the “interim sanctions” regulations of the IRS . . .
* * *
As of the current date (Aug, 2000), M&M is still the insurance agent for KSBE and the captive manager for P&C. A former M&M employee, Christine Lee, replaced Harmon as KSBE’s Risk Manager in 1997, but has since left. Rodney Park, KSBE’s head of the Administration Group and one of the co-investors in the McKenzie Methane deal, replaced Harmon as President of P&C, and still remains in that position as of this date.
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From the 10/14/99 edition of The Honolulu Star-Bulletin by Russ Lynch:
Isle Insurer Sues State for Snub in Bidding. A Honolulu insurance business is suing the State of Hawaii, charging that it was improperly dropped out of the running for work as an insurance broker for the state government. Aon Risk Services, Inc. filed suit in Circuit Court yesterday accusing the state Department of Accounting & General Services of bypassing the steps the state spelled out in its request for proposals to provide risk insurance for the state. . . .John D. Beck, president of Aon Risk, said the company is charging that the state “summarily rejected” Aon’s proposal, contrary to the recommendation of a selection committee, and “arbitrarily selected another brokerage firm,” Marsh USA, Inc. . . .
* * *
From Harper’s Magazine, Feb, 2000:
How George W. Bush Got Rich — A heartwarming tale of influence, cronyism, and $1.7 billion, by Joe Conason:
. . On December 6, 1994, one month after he defeated Ann Richards to become governor of Texas, George W. received a large but belated campaign contribution from an acquaintance named Thomas O. Hicks . . .
Of the scores of appointments made by an otherwise weak governor under the Texas constitution, a seat on the University of Texas Board of Regents is among the most desirable. It carries significant prestige, opportunities for patronage, and preferred access to coveted season tickets (or luxury boxes) at Longhorn football games. For someone like Tom Hicks, however, being a regent provided something far more valuable than any such trifling tokens of status. The prolific Hicks had conceived an ambitious plan for the state university system’s financial assets — more than $13 billion — that matched his own bold investment style, and, with the governor’s support, he parlayed his appointment into a position of unprecedented control over the university funds.
While the University of Texas invested hundreds of millions of dollars with Republican-linked partnerships under the guidance of Tom Hicks, it also placed hundreds of millions of dollars more with his friends and associates as well as with firms that did business with Hicks, Muse...
Two former classmates of Hicks’ at the University of Texas also were awarded large investments by UTIMCO. One was his old fraternity brother Bruce Schnitzer, a New York insurance man who set up Wand Partners, which received more than $60 million in at least three separate deals with UTIMCO between 1996 and 1998. Schnitzer’s record of success was mixed at best; his companies’ rates of return lagged behind the Dow average. . . .
Nor was it reassuring that he had resigned in 1985 as the president of Marsh & McLennan, then the world’s biggest insurance brokerage, after the company lost $165 million in unauthorized trading and was fined by the New York State insurance department. ...
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Despite those problems, Schnitzer maintained close connections not only with Hicks, Muse but with Richard Rainwater and the Bass family. After quitting Marsh & McLennan he had done multimillion-dollar deals with all of them, including one of the first major partnerships put together by Hicks, Muse. . . .
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(A Catbird Note: Texas University Investment Management Co. is one of the largest institutional investors in Bedford Property Management. Other large institutional investors in Bedford are Barclays Bank and Invesco Management & Research. Among the largest institutional investors in Marsh & McLennan are Barclays Bank and Invesco. Bedford is one of the nation’s largest real estate development and property management companies, doing millions of dollars a year in business with Bishop Estate.)
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For more > > > RICO Lawsuit - Harmon v. Federal Ins Co., Marsh & McLennan, et al
See also: AXA Financial; Barclays Bank; Bishop Estate; Goldman Sachs; Investors Equity Insurance Co; Lockheed Martin; MacArthur Foundation; Mid Ocean Reinsurance; P&C Insurance Co; Underwriters Capital
And in Part I: Adele Smith Simmons; Richard Rainwater.
McKenzie Methane - A Texas methane gas company in which Bishop Estate was the majority investor— AND IN WHICH THE BISHOP ESTATE TRUSTEES, MANAGERS, FRIENDS AND OTHER INSIDERS CO-INVESTED THEIR PERSONAL FUNDS, THEN LET THE ESTATE BAIL THEM OUT WHEN THE DEAL FIZZLED.
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For more GO TO >>> RICO Lawsuit - Harmon v. Federal Insurance Company et al.
For even more GO TO > > > Broken Trust
Merrill Lynch - From ctnow.com, 10/21/99:
Top Politicians Linked To Pension Fund Deals. State Treasurer Denise Nappier shone the light Wednesday on seldom-seen machinations that have put millions into the pockets of well-connected “finders” in state pension investment deals— and some of the state’s best-known politicians were caught in the glare. . . .
[Paul] Silvester has told the authorities, in a secret statement still under court seal, that [former state Senate leader William] DiBella introduced him to Joseph Grano, an old DiBella friend from Hartford’s South End who is president of Paine Webber. After Silvester agreed to invest $200 million with Paine Webber last year, DiBella told Silvester that the company had refused to pay him a fee.
When Grano asked Silvester if there was another way to help DiBella, Silvester said, Silvester turned to Frederic V. Malek, the chairman of Thayer Capital Partners, which received a $75 million state investment commitment last October. Malek allegedly told Silvester that Thayer used Merrill Lynch as an exclusive placement agent, and that the only possibility to compensate DiBella would be if Merrill Lynch would forgo some of its fee.
In its disclosure to Nappier this week, Thayer reported that it did, in fact, agree to pay a $374,500 fee to a firm called North Cove Ventures, which Nappier’s office identified as “William DiBella” when it released its compilation of the disclosures . . .
Thayer also paid a $1.1 million placement fee to Merrill Lynch, according to the disclosure...
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From Bloomberg News, 7/7/00:
. . . Merrill Lynch & Co., moving to reduce costs, may cut as many as 2,000 from its brokerage unit, or about 5.4 % of the total, the Wall Street Journal reported today.
The biggest U.S. broker would eliminate marketing, strategy and technology jobs from the unit ... The cuts would exceed earlier estimates for several hundred job losses and could save the firm as much as $150 milion a year.
“They’ve got to boost profits out of this business, the easiest way to do that is to make job cuts,” said Ken Worthington, an analyst . . .
Eliminating 2,000 jobs would be the biggest reduction since 1998, when Merrill slashed 3,400 positions following Russia’s default and the near-failure of the hedge fund, Long-Term Capital Management.
See also: Bishop Estate; Carlyle Group; Crossroads Group; Long-Term Capital; MacArthur Foundation; Marsh & McLennan
And in Part I: Ben Andrews; Jay Malcynsky; Paul J. Silvester; William DiBella.
Metropolitan Life Insurance Company - This nest is hatching . . . more to come.
Mid Ocean Reinsurance Co. - In 1993, Bishop Estate invested $30 million in Mid Ocean Reinsurance, a Bermuda company, with partners J. P. Morgan, Marsh & McLennan, and Texas deal maker, Richard Rainwater. Bishop Estate’s trustee, Henry Peters, was appointed a director of Mid Ocean. In 1998, Exel Ltd, a Bermuda insurer, acquired the 75% of Mid Ocean Ltd. it didn’t already own in a stock swap valued at $2.2 billion. The transaction was negotiated for Mid Ocean by J.P. Morgan & Co. while Goldman Sachs advised Exel.
* * *
From Equity No. 2045 - 2nd Amended Petition of the Atty Gen to Remove and Surcharge Trustees:
. . . In 1992, the Trust invested approximately $31 million in Mid Ocean, Ltd., a Bermuda-based insurance company, and acquired 310,000 Mid Ocean Class A shares....
In 1993, when Matsuo Takabuki retired as a Trustee of the Trust, (Henry) Peters succeeded to Takabuki’s seat as a director of Mid Ocean. . . . Peters’ service as a Mid Ocean director fell within his duties as Trustee and was a Trust opportunity. . . . Peters used Trust personnel to prepare him for Mid Ocean directors’ meetings. . . .
While a director of Mid Ocean, Peters received substantial director’s retainers and attendance fees and acquired shares of Mid Ocean stock through a stock and deferred compensation plan for non-employee directors. . . .
The Mid Ocean fees and stock options are assets that belong to the Trust and not to Peters individually... Peters has enriched himself at the expense of the Beneficiaries by retaining the fees and stock options for his personal benefit. . . .
* * *
For more GO TO > > > Broken Trust
See also: Marsh & McLennan; Goldman Sachs
And in Part I: Henry H. Peters; Richard Rainwater.
Miller & Chevalier - A Washington, DC-based nest of Lawyers and Lobbyists.
From their web-site, 8/1/00:
. . .In 1920, Robert Miller and Stuart Chevalier founded Miller & Chevalier as the nation’s first law firm specializing in tax matters. Mr. Miller had served as Solicitor and Mr. Chevalier as Asst Solicitor of the Internal Revenue Service shortly after the first federal income tax laws were enacted. . . . Like our firm’s founders, many of our tax lawyers have worked in federal government service. . . . Our firm’s tax practice is diverse, responding to the increasing complexity of the international tax system and the need for Washington representation to deal effectively with important tax policy issues. We serve clients in numerous industries: ... aerospace, automobile, banking and finance, natural resources and energy, chemicals, electronics, pharmaceutical, retail, and health care insurance. . . . Our firm represents over half of the Fortune 50 companies. We also work with foreign-owned companies of similar size ...
* * *
Taxation - Representative Engagements
Amoco Corp v. Commissioner (a.k.a. US Taxpayers) . . . The U.S. Court of Appeals ... held that Amoco was entitled to foreign tax credits for Egyptian income taxes paid on its behalf by the Egyptian National Oil Co . . . The amount of the asserted deficiency was over $450 million. . . .
Atlantic Richfield Co v. Commissioner (a.k.a. US Taxpayers) . . . This case involves over 200 issues and a deficiency in excess of $700 million. Some of the issues involve hedging, tax accounting, foreign source income, and capitalization questions. . . .
B.F. Goodrich v. United States (a.k.a. US Taxpayers) . . . This case involved whether interest expenses incurred on corporate owned life insurance were deductible. The taxpayer sought a refund of approximately $2.5 million. The case was settled. . . .
The Boeing Co v. United States (a.k.a. US Taxpayers) . . . This case involves the allocation and apportionment of research and development expenses for purposes of computing combined taxable income for DISC/FSC purposes. The taxpayer is seeking a refund of over $450 million. The District Court granted Boeing’s motion for summary judgment; the govt’s appeal to the Ninth Circuit is pending. . . .
Cheng v. Commissioner and Pen v. Commissioner . . . The issue in these companion cases was whether commissions earned as compensation for the performance of personal services in Taiwan were taxable as income effectively connected to a U.S. trade or business. The total amount at issue exceeded $40 million in deficiencies, penalties, and interest. The government conceded. . . . (Those must have been some personal services! I wonder what kind?)
Exxon Corp v. Commissioner (a.k.a. US Taxpayers) . . . The Tax Court held that the Commissioner’s proposed allocation of over $6.5 billion in income was precluded under Code sections 61 and 482 due to a foreign legal restriction. . . .
Exxon Corp v. Commissioner . . . This case involves the issue of whether the future costs of dismantling oil production structures and equipment in Prudhoe Bay, Alaska, may be currently accrued. The disallowed deductions total more than $1 billion. . . .
General Electric Co v. Commissioner . . . This case involved whether the taxpayer properly elected ... to deduct currently approximately $118 million in research and development expenses.
* * *
In addition to their legal services, Miller & Chevalier declared lobbying income of $1.4 million in 1998, with total lobbying expenditures of $320,000 (all to the lobbying firm of Akin, Gump).
Among Miller & Chevalier’s lobbying clients: Assn of Financial Service Holding Cos; Atlantic Richfield; Blue Cross/Blue Shield; Boeing Co; Boston Edison; Chevy Chase Bank; Gallo Winery; Monsanto Co; Nuclear Fuel Services; and the Arkansas-based Wall-Mart Stores.
* * *
See also: Akin Gump; Bishop Estate; PricewaterhouseCoopers; The Lobbyists
Mitsui Trust and Banking Company - From Pacific Business News, 06/24/96:
Landmark back on market. . . . The architecturally distinctive 35-story Waikiki Landmark has languished since its completion in 1993, a victim of the evaporation of interest in expensive Hawaii real estate . . .
In June 1995, Los Angeles-based Oaktree Capital Management bought the $155 million mortgage on the 196-unit building for an estimated $50 million from Mitsui Trust & Banking Co. Ltd. And in January, Oaktree filed a foreclosure suit against owner Waikiki Landmark Partners, headed by controversial Indonesian developer Sukamto Sia, also known as Sukarman Sukamto. . . .
* * *
From U.S. News & World Report, 04/13/98, by David Kaplan:
Yakuza, Inc.
. . . U.S. News obtained a ... portfolio of 108 properties offered to Western investors by Mitsui Trust & Banking Co., one of Japan’s largest banks. . . . Thirteen of the properties ... are held by Azabu Building, a company that might not mean much to Americans but is quite familiar to Japanese police. . .
* * *
From: Honolulu Star-Bulletin, 12/23/97:
Mitsui Trust foreclosing on Maui Marriott - A Japanese-based lender has filed a foreclosure suit against the owner of the 720-room Maui Marriott Resort . . . Mitsui Trust and Banking Co. filed the complaint last week against Azabu Building Co. ... saying the developer owned $245 million in principal and interest ...
Azabu acquired the Maui Marriott, which opened in 1982, from Metropolitan Life Insurance Co., Marriott Corp. and KBP Limited Partnership in 1986.
The suit is the latest legal action faced by Azabu, headed by Japanese deal maker Kitaro Watanabe, who invested about $600 million in isle properties during the late 1980s and early 1990s. . . . In 1993, Mitsui filed a foreclosure suit against Azabu for its purchase of the 1,200-room Hyatt Regency Waikiki. . . .
Some believe that the foreclosure is largely a result of Azabu’s problems in Japan. In 1994, Mitsui wrote off about $1 billion in bad debts largely from Azabu’s loans in Japan.
* * *
See also: Azabu Building; Bishop Estate; Yakuza.
National Policy Forum - A tax-exempt foundation headed by RNC Chairman Haley Barbour.
For more GO TO > > > A Flock of Elephants; The Elephant Nests
National Housing Corporation - From Equity No. 2048 - Petition of the Attorney General ... to Remove and Surcharge Trustees (of Bishop Estate):
. . . Kickbacks to Peters and Wong - Wong has a brother-in-law, Jeffrey Stone ... In 1990, the Trust owned land in Hawaii Kai that it leased to Kapalele Associates ... to develop and construct Kalele Kai, a leasehold condominium project.
The Kalele Kai project was completed in 1993. ... In 1995, Kapalele sold the improvements to One Keahole Partners (OKP) for $36.5 million. OKP is a partnership between National Housing Corporation (50%) and Pacific Northwest, Ltd., (50%) an entity owned and controlled by Jeffrey Stone. . . .
* * *
For more GO TO > > > Broken Trust
NationsBank - From The Buying of the President:
. . . In Dec 1994, the Wall Street Journal reported, “The Democratic party expects to close ... with a near-record financial debt ...” The debt was $5 million, the biggest debt for the party since 1968 ...
But the Center for Public Integrity has learned that the party’s debt was evident to the White House in late 1993 and ... President Clinton was “furious over the shortfall” . . .
“Fund raising is still going strong,” Terrance McAuliffe, the DNC finance chairman, told the Wall Street Journal, “and we are very optimistic about the future because of the fund-raising base, especially from the business community...”
Part of that was a $3.5 million loan from NationsBank at a very favorable rate of prime plus 1.5 percentage points.
That much-needed loan...was made two weeks before the mid-term elections, on Oct 14, 1994, and two weeks after the Democratic Congress passed the Fair Trade in Financial Services Act, signed into law on Sept 29 by President Clinton, who had worked hard for passage. Stalled for years, the new law allowed financial institutions to operate a single national bank . . .
No one wanted it more than NationsBank and its president and CEO, Hugh McColl. Indeed, NationsBank lobbyists reportedly helped to draft the legislation. McColl calculated it would save his bank $50 million a year. Critics of the law said big banks would just swallow up small ones.
We learned that candidate Clinton’s openness to considering NationsBank’s interstate banking legislation apparently was a fundamental condition of support for McColl, who endorsed Clinton late in the 1992 campaign after the two had breakfast, and sent a personal check to the campaign for $1,000. . . .
In 1992, prior to the breakfast, Clinton campaign officials had unsuccessfully solicited a major Democratic party contribution from NationsBank representatives . . .
McColl has become one of Clinton’s closest advisors on banking issues and Clinton has called McColl “the most enlightened banker in America.”
On July 15, 1993 ... McColl spoke at a White House media event to promote Clinton’s community development lending program. An American Banker editorial at the time groused that McColl had appointed himself banking’s “official mouthpiece . . . on behalf of bankers everywhere, he endorsed the lending plan, which is about as bank-friendly and John Dillinger ... McColl would endorse any half-baked Clinton idea in return for the White House’s support for interstate branching legislation.”
McColl left nothing to chance with Congress either. NationsBank significantly increased its PAC contributions, giving $626,800 to congressional candidates in 1993-94 . . .
When McColl and Clinton were seen sitting together in the NationsBank box at the 1994 Arkansas-Duke NCAA basketball finals in Charlotte, NC, one banking industry commentator said of McColl, “Based on what the president has done for him lately, I would have expected to see Hugh sitting on his lap . . . In days gone by, political quid pro quos were usually paid off with stuffed ballot boxes. Laws were passed to stop that sort of chicanery. Now it’s done with money.”
While the interstate bill was moving through conference, on Aug 23, 1994, Clinton and McColl 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.
* * *
At the same time the interstate branch legislation was being lobbied by McColl and NationsBank, in May 1994 Clinton White House Senior Adviser George Stephanopoulos, who makes $125,000 a year, received a controversial 25-year, $668,000 loan at 6.375 percent interest from NationsBank. . . .
* * *
The NationsBank relationship with Clinton is just one example of what to look for with respect to the financial industry’s influence on the president and his party generally in 1996. In 1992, the Clinton/Gore campaign received more than $800,000 from financial interests.
* * *
For more GO TO > > > A Flock of Donkeys; The Donkey Nests
See also: Bank of America; CitiGroup; Goldman Sachs; Marsh & McLennan
Nauru - From About.com by Linda DeLaine, 11/23/99:
Nauru, Hiding Place for Russia.
Nauru is a 21 sq. mile Pacific island located south of the Marshall Islands. It is surrounded by sandy beaches which rise to raised coral reefs with a phosphate plateau in the center. The primary industry has been phosphate mining, conducted primarily by England, Australia, and New Zealand. This has turned about 90% of the island into a wasteland. Revenues from over 90 years of mining are expected to be exhausted by the year 2000.
For a time, Nauru enjoyed the highest income per capita in the world and lived the indulgent life-style that goes with wealth. The other two main industries are financial services and coconut products. . . .
It seems that Nauru has, not only figured out how, but has implemented a way to bolster its economy and Russian citizens are, allegedly, helping. Nauru, as an off-shore banking center, has been one of the best kept secrets, up to now. . . .
According to Victor Melnikov, deputy chairman of the Central Bank of Russia, roughly $70 billion was transferred from Russian banks to accounts chartered in Nauru, in 1998 alone. The primary purpose was to avoid taxes. In reality, the money never transits the island. It is moved from the Russian account to the Nauru account and then to accounts which the Nauran banks have at other foreign financial institutions. Nauru is using its state of independence to charter accounts and offer clients anonymity as they wheel and deal in the international financial system. . . .
The number of such accounts, registered on Nauru, is impossible to determine. These, so called, banks exist only on a ledger. There are no buildings, bank tellers, safes, etc. Working within the international banking system, funds are electronically transferred to and from accounts registered with the Nauru banks and other financial centers, such as New York. . . . Nauru exercises stricter secrecy than even the well known Swiss bank accounts enjoy. . .
See also: Bank of New York; Central Pacific Bank.
Nomura Securities Group - From Sydney Morning Herald - 12/11/98 by Ben Hills —
The Financial Monster That Tried to Eat Australia.
The world’s oldest and largest financial conglomerate broke the law when it attempted to ambush the Australian Stock Exchange and wipe $15 billion off the value of Australia’s public companies, the Federal Court ruled yesterday....
Justice Ronald Sackville found, “Nomura engaged in deliberately misleading conduct designed to achieve illegitimate ends.”
Nomura International is a division of the scandal-plagued, Tokyo-based Nomura Securities Group, founded in 1872, which has $151 billion in assets. . . .
The verdict is expected to trigger action against Nomura in the two cities from which the “sting” was organised — London, and in Hong Kong where legal action has been launched by the local securities regulators.
The decision followed a trail that ran for 16 days in the Federal Court and involved millions of documents, electronic records, and taped telephone calls. It represents a major victory for the ASIC. . . .
Mr. Cameron said it was a “landmark” decision that “...will help establish the boundaries of acceptable trading strategies not only in Australian boundaries but also for players in the international securities and futures markets.”
The case focused on the drama of March 28, 1996, when Nomura tried to destroy billions of dollars of the value of the Australian Stock Exchange by dumping a portfolio of shares worth $600 million — more than the normal total daily turnover — in the closing minutes of trading.
The court was told that Nomura executives and traders in London and Hong Kong laughed and joked about what they were doing as they faxed instructions to 10 different brokers, hoping to drive the stock exchange’s All Ordinaries index of 353 stocks down by as much as 10 per cent.
This would have destroyed $15 billion of the value of Australia’s major public companies, with devastating consequences to pension funds and hundreds of thousands of individual shareholders. . . .
This is the latest of a series of adverse findings against the world’s largest stockbroker. In June last year, the Tokyo District Prosecutors’ office filed charges against the company and two former managing directors accusing them of paying a sokaiya (racketeer) $625,000 to ensure that a shareholders’ meeting was not disrupted. The company was also banned from trading on its own account on the Tokyo Stock Exchange for four months for compensating a gangster for trading losses.
In July last year, Nomura agreed to pay $94 million to Orange County, south of Los Angeles, in settlement of an action over the biggest bankruptcy in US municipal history.
Nomura was one of the brokers the county used in gambling on high-risk securities which cost it nearly $3 billion. . . .
* * *
From kaleido.smn, 9/23/96, by Ito Hirotoshi: Nomura Securities: Another payoff scandal, yet not widely reported — Even though several evening papers and local newspapers have reported it and the securities industry has been shaken, there is a grave problem the public is not aware of because the mainstream media, i.e., national dailies and TV networks, have not reported it. The matter involves payoffs by Nomura Securities to big-shot “sokaiya.”
Sokaiya are extortionists who specialize in purchasing shares in large companies, thereby earning the right to attend annual stockholders meetings, which they threaten to disrupt unless they are paid off. Sokaiya evolved from thugs hired to prevent criticism of the company from ordinary shareholders during annual meetings.
The allegations against Nomura Securities include that it opened an account for a dummy company owned by a big-shot sokiya called “K.” Apparently Nomura had discretionary control over the account and made sure that it generated profits. Paying sokaiya off is against Commercial Law . . . Furthermore, managing client’s accounts with discretionary powers is against the Securities and Exchange Act. . . .
Hundreds of millions of yen for the den.
Nomura Securities is the largest securities firm in Japan. The Nomura annual stockholders meeting was initially controlled by the late right-wing bigwig Kodama Yoshio. When Kodama died, his disciple in the sokaiya industry, Uemori Kotetsu, took the business over and conducted a typically perfunctory shareholders meeting. Uemori himself died around five years ago, and K became his successor. . . .
Nomura paid him off, it seems, as follows:
The dummy company mentioned above is a real estate company called “S,” managed by K’s kid brother. In Nov 1994, S opened an account with Nomura Securities and deposited 500 million yen. Nomura invested this money not only in promising stocks, but also high-risk, high-return products such as warrant bonds and futures, and allegedly generated profits of several hundred million yen per annum. . . .
The unrepentant bookie of the gambling den.
The Securities and Exchange Commission has already commenced discreet investigations this spring. . . .
In June 1993, a scandal in the securities industry broke when it was revealed that only high-roller investors were being compensated for their losses in the stock market. This scandal showed that the Japanese stock market was a gambling den where Nomura had effective control over the market and could weigh the odds in favor of clients for whom it chose to do so.
Public confidence in the securities industry plummeted, and Tabuchi Setsuya, then chairman of Nomura Securities and known as the “Don of the securities industry,” resigned and withdrew from all official duties. But we now know that just one year later Nomura was not only illegally paying off a sokaiya, but was in fact using the stock market to generate profits.
All the repentance was only a show, and it is clear that Nomura is still the bookmaker presiding over the gambling den.
It is also suspected that the profits from the S account were also distributed to other sokaiya via K. In any case, confidence in the Japanese stock market will indubitably drop even further and share prices will fall once this incident breaks into the open.
* * *
From Honolulu Star-Bulletin, 3/18/97 —
California Pension Fund Dropping Nomura —
The California Public Employees Retirement System, the nation’s largest public pension fund, said it will cease dealing with Japan’s scandal-plagued Nomura Securities Co.
The $110 billion pension fund, known as CalPERS, also said it will begin to manage more of its own domestic funds rather than rely on outside managers.
Nomura has been tainted by alleged illegal stock transactions on behalf of a racketeering group.
* * *
Nomura Capital Management Inc., a unit of Nomura Securities, manages $185 million for the $7 billion Hawaii Employees’ Retirement System. Stanley Siu, the ERS’ administrator, said last week that he had been assured by Nomura that questionable trades do not involve ERS investments. . . .* * *
From Nando.net (AP), 11/30/97:
Japan Faces Corporate Racketeering Scandal — A century-old brokerage is in ruins, some of Japan’s most respected companies have been shamed, and dozens of executives are behind bars. This week, all eyes will be on the trial of Ryuichi Koike, the man at the center of the storm.
Koike, 54, on Tuesday faces charges he received millions of dollars in bribes as a “sokaiya,” a mob-connected extortionist who threatens to disrupt shareholders’ meetings unless paid off.
The case has damaged the credibility — and stock prices — of some of Japan’s top companies, led to the arrest of corporate executives and become a symbol of the rot at the center of the Japanese financial world. . . .
Koike, who allegedly worked with his brother Yoshinori, is accused of receiving $5.5 million in payoffs from Japan’s top four brokerages. Dai-Ichi Kangyo Bank — one of the world’s largest banks — allegedly made him a shady loan of $92.1 million. Dozens of corporate officials have been arrested in the case. . . .
Just this week, 100-year-old Yamaichi Securities, the nation’s fourth largest brokerage, went belly up after its role in the scandal sapped what was left of its sagging credibility and clobbered its share prices.
Days ago, four Daiwa Securities Co. officials were arrested under suspicion of links to Koike. And in July, the government forced Nomura Securities — Japan’s largest brokerage — and Dai-Ichi Kangyo to shut down key operations until the end of the year after the payoffs came to light.
In separate cases, police have arrested Mitsubishi Motors Corp. executives on charges of making illegal payoffs to other racketeers, and companies in the Mitsubishi and Hitachi groups have been implicated in similar cases. . . .
There are about 1,100 sokaiya still operating in Japan. About 30 are arrested each year and penalties are light. Convictions are punishable by up to six months in jail or $2,600 in fines. . . .
* * *
Catbird Comment: Note the dates on the above revelations— 9/23/96; 3/18/97; 11/30/97 and 12/11/98— then take careful note of the dates in the following article.
* * *
From Wharton Ethics Program:
The House of Nomura and the
Japanese Securities Scandals
“I sincerely apologize to the public and the nation’s investors for the trouble caused... I am responsible for the firm’s actions. . . . Employees in the future will strictly abide by ethical rules.” — Setsuya Tabuchi, Chairman of Nomura Securities (June 20, 1991)
These shocking statements of contrition and admission were in response to the revelation that one of the world’s most powerful securities houses had been “caught red handed, offering illicit compensation to institutional clients, laundering money for yakuza (the Japanese Mafia) and encouraging stock speculation.
Nomura and three other members of the “Big Four” securities firms in Japan (Daiwa, Nikko, Yamaichi) were ultimately accused of a plethora of improper activities, which also included tax evasion, ignoring the Ministry of Finance (MOF) directives, succumbing to extortionists, and misusing confidential information.
On Oct 8, 1991, the MOF announced penalties against the Big Four. Nomura was banned from brokering equities in 86 offices and branches for one month, starting Oct 15, 1991. . . .
A month later, the Japanese Fair Trade Commission (JFTC) publicized the results of its investigation of the scandals and issued decrees against the Big Four, ordering them to promise never to compensate clients for losses again. The JFTC also clearly stated its position that similar offenses in the future would lead to criminal sanctions . . .
The Big Four signed consent decrees with the JFTC in December, 1991. . . .
Yoshihisa Tabuchi resigned as president in late June, 1991 ... and Setsuya Tabuchi resigned as both chairman of Nomura and vice chairman of Keidanren (The Japanese Federation of Economic Organizations). ... Thirty-two senior Nomura officers were fired, and several others demoted, while the pay of those executives who remained was slashed by as much as 30%. . . .
* * *
See also: Bishop Estate; Daiwa Bank; Goldman Sachs; Sumitomo Bank; Yakuza.
Northwestern Mutual Life Insurance Co. - See: Bishop Estate; McKenzie Methane
And in Part I: George W. Bush; Richard Rainwater.
Orion Capital Partners - A joint investment of Bishop Estate, MacArthur Foundation, and others. This partnership was later involved in the Connecticut Treasury scandals.
See: Carlyle Group; Crossroads Group; MacArthur Foundation; WCI Communities
And in Part I: George Bush; Paul J. Silvester
Overseas Private Investment Corporation (OPIC) - From The Buying of the President (1996):
The [Ron] Brown trade missions would not have been so successful for some U.S. corporations if it had not been for the special government financing and support available to them from two government-backed entities: The Export-Import (Ex-Im) Bank of the United States and the Overseas Private Investment Corp. (OPIC).
Ex-Im and OPIC provided a total of $39.8 billion in financial backing in 1993 and 1994. President Clinton appointed long-time Arkansas political supporters to both organizations. . . .
Lottie Shackelford, a former mayor of Little Rock, is one of the members of the OPIC board of directors appointed by Bill Clinton in 1993. During the 1992 Clinton-Gore campaign, Shackelford held the position of deputy campaign manager . . .
Today she is a vice chairman of the DNC. Since April 1994, Shackelford has also worked as a lobbyist and registered foreign agent for the Washington-based firm, Global U.S.A. The firm is also registered to represent the Westinghouse Corporation. As it turns out, Westinghouse is listed as a client of OPIC for 1994....
OPIC provides loans and loan guarantees for U.S. companies unable to obtain conventional funding for foreign projects. OPIC’s 1994 annual report says direct loans are “reserved for small businesses and cooperatives and generally ranging from $2 million to $30 million.” OPIC, however, financed loans to major American corporations for much more than the stated $30 million high end. A joint venture by GTE Corporation and AT&T got $200 million loan from OPIC to finance a cellular telephone services deal in Argentina. . . .
See also: AT&T; Export-Import Bank; Westinghouse Corp.
P&C Insurance Company, Inc. - Bishop Estate’s captive insurance company domiciled in Hawaii, managed by Marsh & McLennan.
From: RICO LAWSUIT: Harmon v. Federal Insurance Company, P&C Insurance Co, Marsh & McLennan, PricewaterhouseCoopers, Henry Peters, Nathan Aipa, Rodney Park, et al: . . .
Defendant P&C Insurance Company, Inc. (P&C), is a single parent captive insurance company formed in September, 1994, and was a wholly-owned subsidiary of Pauahi Holdings Corporation which, in turn, was a wholly-owned, for-profit subsidiary of KSBE. . . .
Although Harmon was the president of P&C, he alleges that he was actually set up as a “straw man” to be controlled by Henry H. Peters, Trustee of KSBE and Chairman of the Board of P&C; Nathan Aipa, KSBE General Counsel and Assistant Secretary/ Assistant Treasurer of P&C; Louanne Kam, Esq., Litigation Manager for KSBE, and others . . .
* * *
From Equity No. 2088 - Report of Attorney General Concerning May 7, 1999 Order - 5/5/00:
The May 7, 1999 order regarding orders to show cause requires the former trustees immediately to resign offices and directorships in the trust’s subsidiary and affiliated organizations . . . P&C Insurance Company, Inc., is a captive insurance company, the sole stock holder which is Pauahi Holdings Inc.
The Attorney General respectfully invites the court’s attention to the annual report publicly filed on March 28, 2000 by P&C (Ex. 1). The annual report lists Henry H. Peters as a director. The Attorney General is unable to determine whether the listing is incorrect (and hence the signed certification of the annual report is incorrect) or whether Peters remains a director in violation of court order.
The Attorney General’s several inquiries of the trust concerning this matter remain unanswered despite the passage of three months. (Ex.2).
* * *
For more GO TO > > > Broken Trust
And for even more GO TO >>> RICO Lawsuit, Harmon v. Federal, P&C et al.
Pacific Islands - From Pacific Islands Report, by Pacific Islands Development Program/East-West Center - Center for Pacific Islands Studies/University of Hawai`i at Manoa:
RUSSIAN MAFIA USING PACIFIC REGION
TO LAUNDER MONEY: OECD
Paris, France (Feb. 14, 1999 - AFP) — Russian organized crime is increasing using the Pacific region as a base for laundering its ill-gotten gains, the Organization of Economic Cooperation and Development (OECD) Financial Action Task Force (FARF) said last week.
“A heavy concentration of financial activity related to Russian organized crime has been observed, specifically in (Western) Samoa, Nauru, Vanuatu and the Cook Islands,” the FATF said in an annual report on money laundering.
It cited “an increasingly common scheme whereby apparently American middlemen are used to open accounts or charter banks in one of the locations” to hide the Russian origin of the money after local authorities became suspicious at the high level of Russian activity in the region.
The Russian mafia are also looking for “potential alliances” with drug traffickers in Central and South America and the Caribbean . . .
There is also concern over the rise in internet gambling, which generates nearly $1.5 million dollars a month in the Pacific region and is seen as “another potential vulnerability for money laundering and financial crime.”
Such electronic casinos offer clients virtual anonymity, making the source of their cash all the harder to trace.
Elsewhere in the Asia-Pacific region, the report said, the principal sources of criminal funds are human trafficking, drug trafficking, gambling and organized crime.
South Asia is a particular focus for money laundering activities as it is home to several major international banks as well as being a transshipment point for drugs from Afghanistan, Iran, Myanmar, Thailand and Laos.
In South Asia, money laundering through gold transactions is particularly popular, either through a gold dealer who provides gold in exchange for cash and checks received by the presenter, or through a cash transaction in one country which is completed by a gold deposit to the owner in another country.
But as elsewhere in the world, electronic payment transactions are also a cause for concern, along with the increasing use of accountants and lawyers to help set up and manage accounts set up to launder the proceeds of criminal activity. . . .
See also: Nauru.
Panin Group - From The Honolulu Star-Bulletin, 10/29/97, by Rick Daysog:
Bishop, partners alter Chinese bank plan. . . . The turmoil in Hong Kong’s stock market may hamper plans by Bishop Estate and its partners to take a mainland Chinese bank public. . . . With the benchmark Hang Seng index losing more than a fifth of its value during the past weeks, analysts said that a proposal to list shares of Xiamen International Bank on the Hong Kong Stock Exchange could be put on hold.
The development underscores Bishop Estate’s growing exposure to global economic trends. It also calls attention to the $10 billion trust’s high-risk, high-reward investment strategy. . . . Bishop Estate, the state’s largest private landholder, owns nearly 5 percent of Xiamen, which last year applied with the People’s Bank of China to list its shares on the Hong Kong Stock Exchange.
Henry Peters, a Bishop Estate trustee and a member of Xiamen’s board of directors, conceded that the volatile Hong Kong market may delay Xiamen’s initial public offering. But he said the bank’s partners are committed to taking it public, which would greatly enhance the estate’s investment. . . .
Critics say the trust should not be investing in exotic companies such as Xiamen. They argue that the nonprofit foundation — which finances Kamehameha Schools — should avoid high-risk ventures in emerging markets such as China. . . .
The list of Xiamen International Bank’s investors reads like a who’s who of Wall Street and Pacific Rim finance. They include former U.S. Treasury Secretary William Simon, Manila-based Asian Development Bank and Long-Term Credit Bank of Japan Ltd. . . .
The largest shareholder is Min Xin Holdings Ltd., formerly the Panin Group, which owns 36.75 percent of the bank. An affiliated company, Panin Bank, formed Xiamen in 1985.
Panin was founded by Indonesian businessman Mu’min Ali Gunawan, a brother-in-law of Indonesian banking tycoon Moshtar Riady . . .
Riady, who heads the Lippo Group, is at the center of the campaign finance scandal plaguing the Clinton administration. . . .
Peters said he was unaware of the relationship between Panin Bank and the Riady family. ...but investments of Simon, Panin and the estate have been linked for years. The estate was a big shareholder in First Interstate Bank of Hawaii Inc. when Simon sold the local bank to First Hawaiian Inc. in 1991. Simon, in turn acquired much of his stake in First Interstate in the mid-1980s from Panin Bank executives. . . .
Peters was a director of the local affiliate Panin North America Inc. in 1983 when he was a legislator, according to filings with the state Ethics Commission. . . .
* * *
See also: Bishop Estate; Lippo Group; Long Term Capital Management; Xiamen International
And in Part I: Al Gore; William Clinton
People’s Republic of China - From Year of the Rat: . . . Our thesis is simple. The Clinton administration has made a series of Faustian bargains and policy blunders that have allowed a hostile power to further its aims in Washington. In the main, Bill Clinton and Al Gore did it for money. . . .
* * *
From Associated Press, by Joe McDonald, 9/21/00:
. . . The U.S. Senate’s 85-13 vote Tuesday for permanent normal trade ties ended the contentious annual reviews of China’s trade status that buffeted relations for the past decade.
Chinese officials want the impending loss of trade barriers to prod farmers, factories and other companies to modernize. That serves their reform agenda, but in the short run, membership in the global free-trade body will lead to job losses and wrenching changes.
Although China’s WTO entry has been 14 years in the making, it isn’t clear whether Chinese firms, from farming to insurance, are ready to shed state protection and face richer, more sophisticated rivals from abroad.
“It could take two to five years before they get a real feel for the implications of WTO,” Li Kui Wai, a trade specialist at the City University of Hong Kong, said Wednesday.
The Senate vote on trade ties doesn’t directly affect China’s effort to join the WTO. Only two WTO members— Switzerland and Mexico— have yet to reach agreements with China on terms for entry. . . .
“In the long term, it’s beneficial for both sides,” said Patrick Powers, director of China operations for the U.S.-China Business Council, which represents 300 American companies.
But in those first years, Chinese companies will face intense pressure to match the efficiency and technology of foreign rivals. [yuk, yuk] Chinese officials are pushing for mergers in securities and other industries to create competitors big and rich enough to survive. [Enter Goldman Sachs, General Electric, Westinghouse etc., etc.]
Beijing has promised to cut tariffs on imported goods from 24.6% in 1997 to an average of 9.4% by 2005. Foreign companies are to be allowed for the first time into telecommunications, banking and other fields. [Enter AT&T, Barkleys, CBS, Citibank, American Express, etc. etc.]
Imported grain could undercut inefficient farms that employ hundreds of millions of Chinese. [Enter Archer-Daniels-Midland, Castle & Cooke, United Fruit Company, etc. etc.]
Insurance and securities firms will face foreign rivals with global experience. [Enter American International Group, AXA Financial, Chubb Group, Citigroup, Marsh & McLennan, Prudential, Zurich, etc. etc.]
“The swift and strong market attack brought by WTO entry will easily drive some small companies into mergers with foreign competitors or into bankruptcy,” said Liu Wei, an official of Dalian Huanong Oil and Fat Co., a major food processor.
* * *
DISSIDENT CRITICIZES VOTE . . . (Beijing - AP) One of China’s best known dissidents on Wednesday harshly criticized the U.S. vote to normalize trade with China, saying it will embolden China’s leaders to step up repression.
The Senate’s approval of permanent low-tariff trade ties with China rewards the communist government’s determination to stifle free speech and political opening, said Wei Jingsheng, speaking from ... New York, where he lives in exile. . . .
“This tells the common people of China that the world doesn’t care about their rights or livelihoods, but only about their own wallets,” said Wei, imprisoned for 18 years in China for urging more democracy and respect for human rights.
Disgruntled Chinese workers and farmers taxed into desperate poverty may now take up more extreme measures to seek redress, he said, referring to recent instances of large-scale violence against corrupt authorities by angry farmers.
* * *
For more >>> The Donkey Nests
For more >>> Dubious Deals in Arkansas
For more >>> China Working Group
For more >>> Sen. Dan Burton’s Oversight Committee
For more >>> Johnny Chung Tells of Dealings with Chinese Donors
For more >>> Tripping With Secretary Ron Brown
PricewaterhouseCoopers - From Conspirators’ Hierarchy:
Present Member of the Committee of 300 . . . Price Waterhouse.
* * *
From the SEC News Release 01/06/00:
Independent Consultant Finds Widespread Independence Violations at PricewaterhouseCoopers:
. . . The staff of the SEC today made public the report by independent consultant Jess Fardella, who was appointed by the Commission in March 1999 to conduct a review of possible independence rule violations by the public accounting firm PricewaterhouseCoopers arising from ownership of client-issued securities. The report finds significant violations of the firm’s, the professionals, and the SEC’s auditor independence rules. . . .
The independent consultant’s report discloses that a substantial number of PwC professionals, particularly partners, had violations of the independence rules, and that many had multiple violations. . . .
A year ago, the firm agreed in a settlement to conduct the review and create a $2.5 million education fund after the SEC alleged that some of its accountants compromised their independence by owning stock in corporations they audited. As a result of the review, five partners of the firm and a number of other employees had been dismissed.
The independent consultant’s report found that nearly half the firm’s 2,698 partners reported having committed at least one violation of the auditor independence rules, while 153 of them admitted to more than 10 each. Of a total 8,064 violations reported by those involved, 81.3% were by partners and 17.4% by managers.
Almost half the reported violations involved direct investments by the PwC professionals in securities, mutual funds, bank accounts or insurance products related to client companies.
* * *
From the RICO lawsuit: Harmon v. Federal Insurance Company, P&C Insurance Co., Inc., Marsh & McLennan, Inc., Trustees of Kamehameha Schools/Bishop Estate, PricewaterhouseCoopers, et al.: . . . Defendant PricewaterhouseCoopers is one of the nation’s largest accounting firms, and conducts business in Hawaii and throughout the United States.
Despite written opinions from Pricewaterhouse that P&C should operate at “arms-length” from KSBE, all or some of the Trustees of KSBE, and all or some of the directors and officers of P&C, conspired to disregard these opinions and to conceal violations of I.R.S. “interim sanctions” regulations.
Plaintiff Harmon personally reported his concerns regarding the apparent “sweetheart deals” with M&M at the direction of Peters, Aipa and Kam, to representatives of Coopers & Lybrand in October, 1996, and followed this up in writing on November 20, 1996. At this meeting and in his letter, Plaintiff explained that he would not sign P&C’s annual financial statements due to the apparent conspiracy between certain trustees, managers, directors and officers at KSBE, P&C and M&M, to defraud KSBE, P&C, and the I.R.S.
Plaintiff also sent a copy of this letter to the Insurance Commissioner, State of Hawaii, along with all enclosures which provided documentary evidence of these wrongful activities. Neither entity responded to this report. Plaintiff later learned that Nathan Aipa had approved P&C’s annual financial statements, and that Coopers & Lybrand had not disclosed in their review the information that M&M was charging excessive fees, and that certain claims were intentionally inadequately reserved.
Plaintiff alleges that Pricewaterhouse had knowledge of these improper activities and financial statements, had a professional duty to report improper and illegal conduct regarding the preparation of these financial statements, and knowingly and wrongfully colluded with some or all of trustees of KSBE, with officers and directors of P&C, in a conspiracy to defraud the beneficiaries of the Estate of Bernice Pauahi Bishop and P&C; racketeering; mail fraud; wire fraud; and violations of the “interim sanctions” regulations of the I.R.S., as detailed in Plaintiff’s complaint. . . .
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From the Honolulu Star-Bulletin, 02/12/00, by Rick Daysog:
Dispute has cost estate millions. . .
The state probes and IRS audit pushed related bills from law and accounting firms to $5 million. . . . The three-year Kamehameha Schools controversy continues to take a heavy financial toll on the nonprofit charitable trust. . . .
A Star-Bulletin review of the $6 billion estate’s voluminous expenditures for its 1999 fiscal year found that the trust paid about $5 million to law firms and accounting firms that were involved in defending it from the Internal Revenue Services’ massive audit and the state attorney general’s criminal and civil investigations. . . .
The financial records, which were filed in state probate court on Dec. 30, ALSO INDICATE FORMER TRUSTEES CONTINUED TO REWARD THEIR FRIENDS WITH LUCRATIVE OUTSIDE CONTRACTS....
In many ways, the records offer a snapshot of a boardroom under siege. . .
That point is underscored by the enormous amount of legal and tax work awarded to PricewaterhouseCoopers LLP. The firm billed the Kamehameha Schools $1.2 million last year, largely for legal and tax work involving the IRS audit. The firm, recently merged with Coopers & Lybrand, which also conducts work for the trust. . . .
Much of the Pricewaterhouse work came after January 1999, when the IRS issued its scathing preliminary findings of the estate’s operations. The IRS later threatened to revoke the trust’s tax-exempt status, setting off a chain of events that resulted in the resignation of former board members Henry Peters, Oswald Stender, Richard “Dickie” Wong, Lokelani Lindsey and Gerard Jervis. . . .
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From The Honolulu Advertiser, 02/05/00, by Sally Apgar:
. . . Trustees helped by Inouye, Akaka in fighting pay limit. . . . The ousted trustees of Kamehameha Schools enlisted the aid of Sens. Dan Inouye and Daniel Akaka in 1995 to influence fellow members of Congress to vote against a bill that threatened the trustees’ $1 million-a-year paychecks, according to internal trust documents obtained by The Advertiser. . . .
Thirteen confidential memos during the fall of 1995 through April 1996 detail the trustee’s strategy against the bill, which called for intermediate sanctions that penalize high-ranking insiders of charitable organizations for taking excessive personal benefits. . . .
The memos express the trustees’ intent to “kill the measure” and their recruitment of influential contacts, such as Inouye, Akaka and the Rev. Jesse Jackson. They also targeted others, including Senator Patrick Moynihan of New York and even White House insiders such as Leon Panetta, then President Clinton’s chief of staff, to win support. . . .
The memos give a glimpse of the behind-the-scenes political power and influence the former trustees once wielded and describe a costly, intensive effort to protect their interests. . . .
Mark McConaghy of PricewaterhouseCoopers, a longtime tax adviser to the trust, was charged with contacting Leslie Samuels, then assistant secretary for tax policy.
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From opensecrets.org: . . . 1998 Profile - PricewaterhouseCoopers:
Total Lobbying Expenditures: $960,000.
Total Lobbying Income: $6,500,000.
Some of PricewaterCoopers’ Listed Lobbying Clients
El Paso Energy
Electronic Commerce Tax Study Group
Enron Corp
Entertainment & Media Cybertax Study Group
Equitable Companies
Fremont Group Inc
General Electric
Goldman, Sachs & Co
IBM Corp
Morgan Stanley Dean Witter & Co
Multinational Tax Coalition
Section 41 Coalition
Securities Industry Assn
Shell Oil
Starwood Capital Group
Walt Disney Co.
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For More >>> RICO Lawsuit - Harmon v. Federal Insurance Co., et al; Broken Trust
Prudential Insurance Company - From Conspirators’ Hierarchy:
. . Insurance companies play a key role in the business of the Committee of 300. . . . The English companies controlled by the British royal family are Eagle Star, Prudential Assurance Company, the Prudential Insurance Company, which own and control most American insurers, including Allstate Insurance.
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From Reputation Management, 1996:
The Rock’s Tarnished Image
. . . If people at the Prudential Insurance Co. of America could turn the clock back 15 years, to the moment in time when the venerable insurance company acquired the floundering brokerage Bache & Co., probably none of them would do it over again. The Bache acquisition, presented at the time as a step toward the ideal of offering consumers “one-stop shopping for financial services,” would over the next decade prove to be a disaster for Prudential...
Unfortunately, by the time the Prudential was ready to acknowledge its mistake, the marriage had cost the company billions of dollars in legal settlements, fees and fines and undermined a reputation for integrity that had been a hundred years in the making....
The scandal had its origins in 1981, when the first Reagan tax reform bill and changes in SEC regulations triggered explosive growth in the number of tax shelters available to American investors and opened the door to speculators who saw real estate, energy and airplane-leasing partnerships as a way to limit tax liability....
The marriage was consummated quickly ... and a few months later George Ball, formerly of E.F. Hutton, was named the first head of Prudential Bache Securities. It was reportedly Ball’s idea that limited partnerships could be marketed to not only wealthy investors seeking tax shelters but also to more mainstream clients interested in traditional income investments.
The marketing of limited partnerships would focus not only on their tax benefits but also on the possibility of providing a hedge against inflation while producing investment income. According to New York Times reporter Kurt Eichenwald, who broke many of the stories pertaining to wrongdoing at Pru Bache, and later detailed the company’s problems in his book The Serpent on the Rock, this decision set the table for massive fraud. The Direct Investment Group that Ball created ... was, Eichenwald says, “at the center of the scandal.
For executives at the senior reaches of the firm, the flow of cash from the department’s business became personal piggy banks, financing profligate corporate spending, regal lifestyles and even sexual conquest.” . . .
Unfortunately, many of the deals that Pru Bache put together involved low-quality products priced significantly above even optimistic estimates of their value. . . .
For more than a decade, the Direct Investment Group traded on the Prudential’s Rock-of-Gibraltar image to package and sell billions of dollars worth of dubious investments. Employees who questioned the ethical or economic premise upon which these deals were based were intimidated into silence or fired. Brokers who refused to push the product were punished....
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It was not until the late 80's that the Prudential Bach limited partnerships began to fall apart . . . By the time the true size of the scandal was apparent, more than $8 billion of risky partnerships - most of which had been marketed as safe and secure - had collapsed. . . .
“In the end,” says Eichenwald, “no single brokerage firm, banker, or trader destroyed the financial security of more people than Prudential Bache.” . . .
The crime was finally visible when, by the thousands, the firm’s clients faced the prospect of losing their homes, their retirements, or their children’s education. Some investors who carefully pinched pennies for decades wound up in bankruptcy.
Scores of Prudential brokers saw their careers, their health, and their lives fall apart because they unwittingly repeated the firm’s lies about the investments.” . . .
Prudential Insurance was experiencing some problems of its own. The company was the subject of a multi-state investigation into charges that its agents have been churning accounts, a practice in which agents pressure policyholders to by new, larger policies. . . .
The volume of complaints against Prudential has triggered a 28-state investigation headed by the New Jersey Department of Insurance, and the company is also the subject of several civil lawsuits.
The churning scandal has been compounded by a whistle-blowing incident. Several former Prudential sales managers throughout the country also have filed suit charging that, when they tried to stop churning in their sales offices, they were disciplined and eventually fired by senior company managers.
In a “whistle-blower” suit filed in U.S. District Court in Illinois, former Pru agent Michael Weaver claims he was fired in retaliation for refusing “to participate in fraudulent activities, churning, and/or dealings that were unfair to clients or potential customers” and for reporting Prudential’s “illegal churning activities” to the state insurance department.
* * *
“The insurance companies like to portray themselves as victims of a few rogue agents,” says Ronald Parry, a Kentucky attorney who has filed a class-action suit against Prudential. “But at Prudential, the practices were so widespread that I believe the company had to know what was going on.” . . .
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In October 1994, Prudential Securities admitted charges of fraud - an admission that enable the firm to avoid criminal indictment - and began settling more than $1 billion in claims against it. The settlement marked the scandal as the costliest in the history of Wall Street.
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Some other Prudential Insurance connections worthy of note:
● Prudential Insurance Co. is the 4th largest institutional investor in Chubb Group.
● Prudential Securities is the 6th largest institutional investor in Putnam, a Marsh & McLennan subsidiary.
● Prudential Insurance Co. is the 6th largest institutional investor in AXA Financial.
● AXA Financial is the #1 institutional investor in Goldman Sachs.
● AXA Financial is the 3rd largest institutional investor in Citigroup.
● AXA Financial is the 3rd largest institutional investor on American International Group.
● AXA Financial is the 8th largest institutional investor in scandal-ridden Columbia/HCA
● AXA Financial is the #1 institutional investor in Loral Space.
● Prudential Insurance Co. is the 6th largest institutional investor in Loral Space.
● Prudential Insurance Co. is the 4th largest institutional investor in Columbia/HCA
● Columbia/HCA’s financial restructuring was handled by Goldman Sachs.
● Bishop Estate invested millions in Columbia/HCA.
● Bishop Estate owned approximately 10% of Goldman Sachs before Goldman’s IPO.
● Bishop Estate was the #1 institutional investor in Underwriters Capital (Merritt) Bermuda.
● Prudential handles Bishop Estate’s pension plan.
● Prudential was negotiating other non-insurance business deals with Bishop Estate.
● Marsh & McLennan is Bishop Estate’s insurance broker.
● Marsh & McLennan was the 2nd largest investor in Underwriters Capital (Merritt) Bermuda.
● Citigroup is the 3rd largest institutional investor in Marsh & McLennan.
● Citigroup is the 3rd largest institutional investor in Chubb Group (Federal Insurance Co., etc.)
● Citigroup is the 10th largest institutional investor in American International Group.
● Putnam (a Marsh & McLennan subsidiary) is the 2nd largest institutional investor in Chubb Group.
● Putnam is the 6th largest institutional investor in Citigroup.
● Putnam is the 5th largest institutional investor in AXA Financial.
● Putnam is the 3rd largest institutional investor in Starwood Hotels.
● Goldman Sachs is the 10th largest institutional investor in Starwood Hotels.
● Wellington Management Co. is the 9th largest institutional investor in Starwood Hotels.
● Wellington Management Co. is the #1 institutional investor in Marsh & McLennan.
● Putnam (M&M) is the #1 institutional investor in Harrah’s Enterprises.
● Putnam (M&M) is the 6th largest institutional investor in Isle of Capri Casinos.
● Goldman Sachs is the 3rd largest institutional investor in Isle of Capri Casinos.
● etc., etc., etc.
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For more, GO TO > > > The Prudential: A Nest on Shaky Ground; Confessions of a Whistleblower; James B. Nicholson vs. Harmon - Witness: Judith Neustadter Fuqua
See also in Part I: Terry McAuliffe; Hillary Clinton
Quantum Access - Houston-based software firm purchased by West Tsusho, a Tokyo-based real estate firm connected with a company run by Ishii Susumu, the late head of the Yakuza syndicate, Inagawa-kai. The individual who helped broker the deal was none other than Prescott Bush, Jr., older brother of President George Bush.
See also: Yakuza.
Ralph Lauren, Inc. - From If the Gods Had Meant Us to Vote, They Would Have Given Us Candidates: . . . Ralph Lauren, the multi-billionaire fashion baron ... made a news splash in 1998 when he engaged in a bit of “conspicuous philanthropy.” He wrote a $10 million company check to the Smithsonian Institution to go toward the restoration of THE Star-Spangled Banner, the badly deteriorating 187-year-old flag that had inspired Francis Scott Key to write our national anthem . . .
Lauren, Inc’s donation produced what is known in public relations lingo as an Op-op— the optimum photo op. Held just after July 4th, it included the President of the United States, the First Lady, a brand-name CEO, the massive and historic flag itself, and a really big check — all of our national symbols arrayed for this one media moment. . . .
The star-spangled ceremony was a promotional coup for Lauren’s company, well worth the ten mil, for he received saturation media coverage as he wrapped in Old Glory, and he was given both a product endorsement and testimonial to his character by the First Couple.
President Clinton: “You know, most of us have— well, maybe not most of us, but a lot of us, including Hillary and me— have these great Polo sweaters with the American flag on it.”
Next the First Lady: “The phrase ‘Ralph Lauren’ has become an adjective for a certain kind of style. Now it will be a symbol of another aspect of the American way— good citizenship.”
Then Ralph stepped forward to add just the right touch of billionaire humility, saying that he was giving the money because, “I am a product of the American dream, and the flag is its symbol.” Nice.
But half a globe away one could get a totally different view of the Polo label and of Mr. Lauren’s character. In Shenzhen, China, some 350 young women, 18 to 25 years old, work at the Iris Fashion factory, making the clothing that has made Ralph Lauren so much money that he can live the American dream and still give away $10 million. The factory is a sweatshop.
“I begin work daily at 7 a.m. six days a week,” says a 21-year-old who sews collars onto shirts for Lauren. “On a normal day, work ends around 9 p.m. If we are under pressure for a rush delivery, we work until midnight. Right now I average eighty hours per week. . . . I’m paid on a piece-rate basis, two cents per collar.” . . .
* * *
Hers is but one of hundreds of thousands of real-life stories that are behind the labels of so many of the goods now sold in American stores— goods that make philanthropists of the Ralph Laurens of the world, even while they bring the stench of rank exploitation to the Star-Spangled Banner itself. Cynics say the public doesn’t give a damn, and the global manufacturers sure do all they can to keep the curtain pulled, hoping to keep the public in the dark about their manufacturing methods. . . .
Raytheon - One of the largest U.S. defense contractors. Two of the largest institutional owners of Raytheon are Britain’s Barclays Bank and Citigroup.
Red Mafiya - From Red Mafiya: How the Russian Mob Has Invaded America: . . . Blending financial sophistication with bone-crunching violence, the Russian mob has become the FBI’s most formidable criminal adversary, creating an international criminal colossus that has surpassed the Colombian cartels, the Japanese Yakuzas, the Chinese Triads, and the Italian Mafia in wealth and weaponry. . . .
With activities in countries ranging from Malaysia to Great Britain, Russian mobsters now operate in more than 50 nations. They smuggle heroin from Southeast Asia, traffic in weapons all over the globe, and seem to have a special knack for large-scale extortion. The Russian mob has plundered the fabulously rich gold and diamond mines in war-torn Sierra Leone, built dazzling casinos in Costa Rica with John Gotti Jr., and through its control of more than 80 percent of Russia’s banks, siphoned billions of dollars of Western government loans and aid, thereby exacerbating a global financial crisis that toppled Wall Street’s historic bull market in August 1998. . . .
More ominously, U.S. intelligence officials worry that Russian gangsters will acquire weapons of mass destruction such as fissionable material or deadly, easily concealed pathogens such as the smallpox virus ... and sell these deadly wares to any number of terrorist groups or renegade states.
In North America alone, there are now 30 Russian crime syndicates operating in at least 17 U.S. cities, most notably New York, Miami, San Francisco, Los Angeles, and Denver. The Russians have already pulled off the largest jewelry heist and insurance and Medicare frauds in American history, with a net haul exceeding $1 billion. They have invaded North America’s financial markets, orchestrating complex stock scams, allegedly laundering billions of dollars through the Bank of New York, and coolly infiltrating the business and real estate worlds. . . .
“The Russians didn’t come here to enjoy the American dream,” New York State tax agent Roger Berger says glumly.
“They came here to steal it.” . . .
See also: Bank of New York; The Democratic Party; Tirads; Yakuza
See in Part I: Al Gore; George Bush; William J. Clinton
Reliance Insurance Group - From Conspirators’ Hierarchy: . . . Another successful Rank company in the United States is the Reliance Insurance Group. As an integral part of the Strategic Bombing Survey, Reliance established the initial structural base for brainwashing, opinion-making, polling, survey and the systems analysis used by the Tavistock Institute in the United States.
The Reliance Insurance Company, based in Philadelphia, set up the corporate structure which enabled the Strategic Bombing Survey to be turned against the people of the United States who, although unaware of it, have been subjected to savage psychological warfare for the past 45 years. . . .
Reliance interfaces with the powerful United Fruit Company of Boston and New Orleans run by Max Fisber who, before he was sheepdipped, was a well-known Detroit underworld figure.
United Fruit has long been a conveyer of heroin and cocaine into the U.S. under the expertise of Misbulam Riklis of Rapid American Corporation who masterminds shipments from Canada to the U.S. Remember, all this is under the aegis of a single company, gridding and interfacing with a myriad of smaller companies and operations to give the Committee of 300 full control of a multiplicity of operations, each one carefully interlocked in the grid. . . .
Riscorp Inc. - From Business Insurance - 9/22/97: Chairman, four former officers of Riscorp indicted over donations - A federal grand jury has indicted the chairman and four former officers of workers compensation insurer Riscorp Inc for allegedly funneling $383,500 in illegal campaign contributions to more than 20 Florida politicians, including two state insurance commissioners. . . .
Named in a 27-count indictment last week were William D. Griffin, chairman of the Sarasota, Fla.-based insurer; James A. Malone, former Riscorp president; Thomas E. Danson Jr., former executive vp; Richard A. Halloy, former cfo, and Edward J. Hammel, former sr vp-finance. . . .
The five men, who were hoping to gain political favors, also solicited lawyers and consultants doing business with Riscorp to make contributions that Riscorp then would reimburse, disguising the payments as professional fees, prosecutors charge. . . .
One of the main beneficiaries of Riscorp’s money was former Insurance Commissioner Tom Gallagher, who received about $57,000 in illegal contributions in his 2990 campaign for the commissioner’s job and another $48,000 in his unsuccessful 1994 run for governor ...
Riscorp had been a major provider of managed care workers comp insurance and services in Florida, North Carolina and several other states. However, it has drastically scaled back its operations after being battered by a variety of troubles since its 1996 initial public offering, including a pending civil racketeering suit by disgruntled policyholders and the delisting of its stock from the NASDAQ stock exchange.
Robert Trent Jones Golf Club - The Playground of Presidents - and a top nesting ground for politicians, lobbyists, and other predators of the highest order.
Worthy of note: The club was developed by a tax-exempt institution: Hawaii’s Bishop Estate.
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From STAR tabloid, 09/15/98: NEW CLINTON SEX SCANDAL - Charges he hit on woman at snooty golf club. . . . A new sex scandal has erupted for President Clinton. STAR has learned of shocking allegations that the president — just a few weeks before he admitted lying about having sex with Monica Lewinsky — fondled and made crude remarks to a waitress at a posh Washington, D.C. area country club.
Insiders say the incident is certain to be investigated by Independent Counsel Kenneth Starr . . .
An insider says the alleged encounter with the waitress happened after Clinton played a round of golf in early July at the Robert Trent Jones Golf Club, where the president’s longtime pal Vernon Jordan is a member.
The president is accused of reaching out and “inappropriately touching” the waitress in the club’s grill room after his game. . . . He also made crude and suggestive remarks to her, according to this account.
The woman was said to be very upset by Clinton’s actions . . . “This falls under the category of a quick fondle and some suggestive language,” says the source. . . .
What makes the reports of this latest incident different is the connection with Jordan.
Jordan is on the club’s board and it is his membership under which Clinton plays. He often plays with the president . . .
One report said that Jordan was seen at the club a week later — where he was overheard asking for the home telephone number of the young woman Clinton supposedly approached . . .
Starr has already made Jordan’s role in the Monica Lewinsky scandal a major focus of his investigation of charges of lying, sex and obstruction of justice against the president.
It was Jordan who helped get a lawyer and a job offer in New York for Lewinsky after being asked to help the ex-intern by Clinton’s personal secretary Betty Curry. . .
One of Washington’s most powerful figures, Jordan has long been known as someone who smooths the way for Clinton, in politics and personal matters . . .
See also: Bishop Estate; PricewaterhouseCoopers
See in Part I: Henry Peters; Mark McConaghy; Nathan Aipa
Rockefeller Foundation - From The Drug Story, by Hans Ruesch (Courtesy of British Anti-Vivisection Association):
In the 30's, Morris A. Bealle, a former city editor of the old Washington Times and Herald, was running a county seat newspaper, in which the local power company bought a large advertisement every week. This account took quite a lot of worry off Bealles’ shoulders when the bills came due.
But according to Bealle’s own story, one day the paper took up the cudgels for some of its readers that were being given poor service from the power company, and Morris Bealle received the dressing down of his life from the advertising agency, which handled the power company’s account. They told him that any more such “stepping out of line” would result in the immediate cancellation not only of the advertising contract, but also of the gas company and the telephone company.
That’s when Bealle’s eyes were opened to the meaning of a “free press”, and he decided to get out of the newspaper business. He could afford to do that because he belonged to the landed gentry of Maryland, but not all newspaper editors are that lucky.
Bealle used his professional experience to do some deep digging into the freedom-of-the-press situation and came up with two shattering exposes - “The Drug Story”, and “The House of Rockefeller.” The fact is that in spite of his familiarity with the editorial world and many important personal contacts, he couldn’t get his revelations into print until he founded his own company, The Columbia Publishing House, Washington, D.C., in 1949 . . .
Although “The Drug Story” is one of the most important books on health and politics ever to appear in the USA, it has never been admitted to a major bookstore nor reviewed by any establishment pater, and was sold exclusively by mail. Nevertheless, when we first got to read it, in the 1970s, it was already in its 33rd printing, under a different label - Biworld Publishers, Orem, Utah.
Examples.
As Bealle pointed out, a business which makes 6% on its invested capital is considered a sound money maker. Sterling Drug, Inc., the main cog and largest holding company in the Rockefeller Drug Empire and its 68 subsidiaries, showed operating profits in 1961 of $23,463,719 after taxes, on net assets of $43,108,106— a 54% profit. Squibb, another Rockefeller-controlled company, in 1945 made not 6% but 576% on the actual value of its property.
That was during the luscious war years when the Army Surgeon General’s Office and the Navy Bureau of Medicine and Surgery were not only acting as promoters for Drug Trust, but were actually forcing drug trust poisons into the blood streams of American soldiers, sailors and marines, to the tune of over 200 million “shots”.
Is it any wonder, asked Bealle, that the Rockefellers, and their stooges in the Food and Drug Administration, the U.S Public Health Service, the Federal Trade Commission, the Better Business Bureau, the Army Medical Corps, the Navy Bureau of Medicine, and thousands of health officers all over the country, should combine to put out of business all forms of therapy that discourage the use of drugs.
“The last annual report of the Rockefeller Foundation,” reported Bealle, “itemizes the gifts it has made to colleges and public agencies in the past 44 years, and they total somewhat over half a billion dollars. The colleges, of course, teach their students all the drug lore the Rockefeller houses want taught. . . .
And while “giving away” those huge sums to drug-propagandizing colleges, the Rockefeller interests were growing to a world-wide web that no one could entirely explore. Already well over 30 years ago it was large enough for Bealle to demonstrate that the Rockefeller interests had created, built up and developed the most far reaching industrial empire ever conceived in the mind of man. Standard Oil was of course the foundation upon which all of the other Rockefeller industries have been built.
The story of Old John D., as ruthless an industrial pirate as ever came down the pike, is will known, but is being today conveniently ignored. The keystone of this mammoth industrial empire was the Chase National Bank, now renamed the Chase Manhattan Bank..
Not the least of its holdings are in the drug business. The Rockefellers own the largest drug manufacturing combine in the world, and use all of their other interests to bring pressure to increase the sale of drugs. . . .
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The Rockefeller Foundation was first set up in 1904 and called the General Education Fund. An organization called the Rockefeller Foundation ... was formed in 1910 and through long finagling and lots of Rockefeller money got the New York legislature to issue a charter on May 14, 1913.
It is therefore not surprising that the House of Rockefeller has had its own “nominees” planted in all Federal agencies that have to do with health. . . .
Censorship.
“Even the most independent newspapers are dependent on their press associations for their national news,” Bealle pointed out, “and there is no reason for a news editor to suspect that a story coming over the wires of the Associated Press, the United Press or the International News Service is censored when it concerns health matter. Yet this is what happens constantly.”
In fact in the 50's the Drug Trust had one of its directors on the directorate of the Associated Press. He was no less that Arthur Hays Sulzberger, publisher of the New York Times and as such one of the most powerful Associated Press directors. . . .
America’s Medico-Drug Cartel.
The medico-drug cartel was summed up by J.W. Hodge, M.D., of Niagara Falls, N.Y., in these words:
“The medical monopoly or medical trust, euphemistically called the American Medical Association, is not merely the meanest monopoly ever organized, but the most arrogant, dangerous and despotic organization which ever managed a free people in this or any other age. Any and all methods of healing the sick by means of safe, simple and natural remedies are sure to be assailed and denounced by the arrogant leaders of the AMA doctors’ trust as fakes, frauds and humbugs.”
Colonization.
Rockefeller’s various “educational” activities had proved so profitable in the U.S. that in 1927 the International Educational Board was launched, as Junior’s own, personal charity, and endowed with $21,000,000 for a starter, to be lavished on foreign universities and politicos, with all the usual strings attached. This Board undertook to export the “new” Rockefeller image as a benefactor of mankind, as well as his business practices. Nobody informed the beneficiaries that every penny the Rockefellers seemed to the throwing out the window would come back, bearing substantial interest, through the front door.
Rockefeller had always had a particular interest in China, where Standard Oil was almost the sole supplier of kerosene and oil “for the lamps of China”. So he put up money to establish the China Medical Board and to build the Peking Union Medical College, playing the role of the Great White Father who has come to dispense knowledge on his lowly children. The Rockefeller Foundation invested up to $45,000,000 into “westernizing” (read corrupting) Chinese medicine.
Medical colleges were instructed that if they wished to benefit from the Rockefeller largesse they had better convince 500 million Chinese to throw into the ashcan the safe and useful, but inexpensive, herbal remedies of their barefoot doctors, which had withstood the test of centuries, in favor of the expensive carcinogenic and teratogenic “miracle” drugs Made in USA— which had to be replaced constantly with new ones when the fatal side-effects could no longer be concealed; and if they couldn’t “demonstrate” through large-scale animal experiments the effectiveness of their ancient acupuncture, this could not be recognized as having any “scientific value”.
Its millenarian effectiveness proven on human beings was of no concern to the Western wizards.
But when the Communists came to power in China and it was no longer possible to trade, the Rockefellers suddenly lost interest in the health of the Chinese people and shifted their attention increasingly to Japan, India and Latin America.
The Image.
“No candid study of his career can lead to other conclusion than that he is victim of perhaps the ugliest of all passions, that for money, money as an end. It is not a pleasant picture ... this money-maniac secretly, patiently, eternally plotting how he may add to his wealth ... He has turned commerce to war, and honey-combed it with cruel and corrupt practices ... And he calls his great organization a benefaction, and points to his church-going and charities as proof of his righteousness. This is supreme wrong-doing cloaked by religion. There is but one name for it — hypocrisy.”
This was the description Ida Tarbell made of John D. Rockefeller in her “History of the Standard Oil Company” serialized in 1905 in the widely circulated McClure’s Magazine. And that was several years before the “Ludlow Massacre” . . .
But after World War II it would have been hard to read, in America or abroad, a single criticism of JDR, or of Junior’s four sons who all endeavored to emulate their illustrious forbears. Today’s various encyclopedias extant in public libraries of the Western world have nothing but praise for the Family. How was this achieved? . . .
Ironically, two apparently most NEGATIVE events in the career of JDR brought about a huge POSITIVE change in his favor ... To wit:
In the year when, according to the current Encyclopaedia Britannica (long become a Rockefeller property and transferred from Oxford to Chicago), Rockefeller had “retired from active business”, namely in 1911, he had been convicted by a U.S. court of illegal practices and ordered to dissolve the Standard Oil Trust, which comprised 40 corporations.
This imposed dissolution was to provide his Empire with added might, to a degree that was unprecedented in the history of modern business. Until then, the Trust had existed for all to see— an exposed target. After that, it went underground, and thereby its power was cloaked in secrecy, and could keep expanding unseen and therefore unopposed.
The second apparently negative experience was a certain 1914 event (“The Ludlow Massacre”) that persuaded JDR, until then utterly contemptuous of public opinion, to gloss over his own image.
(For the story of the Ludlow Massacre, see Workers of the World in Part III.)
Thorough Facelift
The worldwide revulsion that followed was such that JDR decided to hire the most talented press agent in the country, Ivy Lee, who got the tough assignment of whitewashing the tycoon’s bloodied image.
When Lee learned that the newly organized Rockefeller Foundation had $100 million lying around for promotional purposes without knowing what to do with it, he came up with a plan to donate large sums - none less than a million - to well-known colleges, hospitals, churches and benevolent organizations.
The plan was accepted. So were the millions.
And they made headlines all over the world, for in the days of the gold standard and the five cent cigar, there was a maxim in every newspaper office that a million dollars was always news.
That was the beginning of the cleverly worded medical reports on new “miracle” drugs and “just-around-the-corner” breakthroughs planted in the leading news offices and press associations that continue to this day.
And the flighty public soon forgot, or forgave, the massacre of foreign immigrants for the dazzling display of generosity and philanthropy financed by the ballooning Rockefeller fortune and going out, with thunderous press fanfare, to various “worthy” institutions.
The Purchase of Public Opinion
In the following years, not only newsmen, but whole newspapers were bought, financed or founded with Rockefeller money. So Time Magazine, which Henry Luce started in 1923, had been taken over by J.P. Morgan when the magazine got into financial difficulties. When Morgan died and his financial empire crumbled, the House of Rockefeller wasted no time in taking over this lush editorial plum also, together with its sisters Fortune and Life . . .
Rockefeller was also co-owner of Time’s “rival” magazine, Newsweek, which had been established in the early days of the New Deal with money put up by Rockefeller, Vincent Astor, the Harrimann family and other members and allies of the House.
The Intellectuals - A Bargain
For all his innate cynicism, JDR must have been himself surprised to discover how easily the so-called intellectuals could be bought. Indeed, they turned out to be among his best investments.
By founding and lavishly endowing his Education Boards at home and abroad, Rockefeller won control not only of the governments and politicos but also of the intellectual and scientific community, starting with the Medical Power - the organization that forms those priests of the New Religion that are the modern medicine men.
No Pulitzer or Nobel or any similar prize endowed with money and prestige has ever been awarded to a declared foe of the Rockefeller system.
Henry Luce, officially founder and editor of Time Magazine, but constantly dependent on House advertising, also distinguished himself in his adulation of his sponsors. JDR’s son had been responsible for the Ludlow massacre, and an obedient partner in his father’s most unsavory actions.
Nonetheless, in 1956 Henry Luce put Junior on the cover of Time, and the feature story, soberly titled “The Good Man”, included hyperboles like, “It is because John D. Rockefeller Jr.’s is a life of constructive social giving that he ranks as an authentic American hero, just as certainly as any general who ever won a victory for an American army or any statesman who triumphed in behalf of U.S. diplomacy.”
Clearly, Time’s editorial board wasn’t given the choice to change its tune even after the passing of Junior and Henry Luce, since it remained just as dependent of House of Rockefeller advertising.
Thus, when in 1979 one of Junior’s sons, Nelson A. Rockefeller died — who had been one of the loudest hawks in the Vietnam and other American wars, and was personally responsible for the massacre of prisoners and hostages at Attica prison — Time said of him in its obituary, without laughing:
“He was driven by a mission to serve, improve and uplift his country.” . . .
* * *
See also: Bishop Estate; MacArthur Foundation; McKenzie Methane; The Media
Round Table - From Conspirators’ Hierarchy: . . . The Watergating of Nixon was the biggest coup yet pulled off by the Round Table as an agency and an arm of the RIIA. . . .
The humiliation of Nixon was a object lesson and a warning to future Presidents of the United States not to imagine they could go against the Committee of 300 and win. Kennedy was brutally murdered in full view of the American people for the same reason; Nixon was not considered worthy enough to suffer the same fate as John F. Kennedy. . . .
But whatever the method used, the Committee of 300 made sure that all would-be aspirants for the White House got the message: “Nobody is beyond our reach.” That this message remains just as forceful as it was when Kennedy was murdered and Nixon hounded out of office, is evidenced by the character of President George Bush, whose eagerness to please his masters should be cause for grave concern among those who worry about the future of the United States.
Sanwa Bank - The Chicago branch of this Japanese bank played an interesting role in the Clinton - Rubin - Goldman Sachs - American International Group - Coral Reinsurance - and Arkansas Development Finance Authority (ADFA) shell game in 1987.
Watch carefully! Sanwa loaned $5 million to ADFA. ADFA then purchased slightly over $5 million in stock of Coral Reinsurance, the Barbados company founded by AIG. Coral then deposited the $5 million, along with $55 million in other investors’ funds, in Sanwa Bank.
Under what shell is ADFA’s $5 million??? Surprise! It never left Sanwa Bank (at least not until it found its way into some of the executives’ pockets).
This strange deal was the scheme of Goldman Sachs, headed at the time by Robert Rubin.
* * *
From NAPLESnews.com, 02/16/98:
Japan’s Top Banks Implicated in Bribery Scandal
Two of Japan’s top commercial banks, Bank of Tokyo-Mitsubishi and Sumitomo Bank were implicated Monday in a widening bribery scandal that has shamed the powerful Finance Ministry. . .
The scandal centers on allegations that two senior ministry bureaucrats were wined and dined by financial institutions in exchange for tipping them off about ministry inspections. . . The two officials . . . were arrested last month on suspicion of taking bribes from Sanwa Bank Ltd, Asahi Bank Ltd, Dai-Ichi Kangyo Bank Ltd, and Hokkaido Takushoku Bank. . .
* * *.
See also: American International Group; Arkansas Development Finance Authority; Coral Reinsurance; Sumitomo Bank; Yakuza.
Schools and Libraries Corporation - From The Buying of the President 2000: . . . On Jan 1, 1998, the federal government imposed a flat tax of 3% on every telephone call as a means of raising money to make every school in the nation Internet-accessible. Al Gore and Reed Hundt, then the chairman of the Federal Communications Commission, had dreamed up the idea the year before. (Gore and Hundt are old friends, having been classmates at St. Albans.)
The tax raises upward of $2.3 million a year, which is to be released to the nation’s schools through a program called “E-rate.” Gore and Hundt didn’t have to fight with Congress to get the extra money; the FCC imposed the tax by an act of bureaucratic fiat. . . .
The tax costs the average American about $30 a year. The money goes to schools, eventually. Before it gets there, it sits at something called the Schools and Libraries Corporation, one of three not-for-profit operations set up by the FCC to administer the “E-rate” program.
From its inception in Nov 1997 until Sept 1998, Ira Fishman, a fund-raiser for Gore and a former White House lobbyist, was the president of the Schools and Libraries Corporation. His salary was $200,000 a year — the same as President Clinton’s.
But Fishman had trouble getting the operation off the ground, and when he resigned after just nine months on the job, the Schools and Libraries Corporation had yet to release any funds to the schools.
Fishman did, however, find ways to spend money. In the first quarter of its existence, Schools and Libraries Corporation projected its expenses to be $2.7 million; when the receipts were added up, the cost of administering the E-rate program— which hadn’t done anything yet— came to $4.4 million. . . .
Now that the “E-rate” program is up and running, some of Gore’s top patrons have climbed aboard the gravy train. BellSouth and Bell Atlantic each made millions of dollars from providing telephone lines to schools. So did software companies like The Learning Company (Gore’s No. 7 career patron), a division of Mattel, Inc., which makes educational software ...
Sino Finance Group - Subsidiary of Bishop Estate, with William Simon and others as co-investors. Owns nearly 5% of Xiamen International Bank in China.
See: Lippo Group; Long Term Capital Management; Panin Group; Xiamen International Bank
See in Part I: Henry Peters; Mochtar Riady; William Simon.
SoCal Holdings, Inc. - A bank holding company in southern California, largely owned by Bishop Estate and William Simon. See: Bishop Estate; Henry Peters; William Simon.
Smith Barney, Inc. - From Honolulu Star-Bulletin, 6/23/98: Isle Hotel Union Funds Suing Stock Brokerage - Two trust funds for the hotel workers union in Hawaii are suing Smith Barney Inc. alleging that the brokerage ran up excessive commission on trades made for fund investment advisers.
The action was filed in state Circuit Court by Tony Rutledge as a trustee of the $300 million-plus Hotel Union and Hotel Industry of Hawaii Pension Plan and the AFL Hotel & Restaurant Workers Health & Welfare Trust Fund.
It alleges that Smith Barney, hired by the funds as a consultant, helped the funds select financial advisers and then coerced those advisers to execute their trades through Smith Barney.
Other brokers were available who would have charged lower commissions, contends the lawsuit, which was filed last week. . . .
Rutledge ... charged that the investment advisers recommended by Smith Barney “placed nearly three-fourths of the listed trades through Smith Barney in order to retain their jobs and stay on good terms with Smith Barney.”
The class-action lawsuit, which seeks unspecified damages, claims that in a sample year, 1996, Smith Barney got $300,000 in commissions out of the total $400,000. . . .
Sports Shinko, Inc. - This Japan-based real estate development firm, invested heavily in Hawaii in the bubbling 1980s (these were big bubbles, not tiny bubbles). The Queen Kapiolani Hotel in Waikiki is one of the better known properties purchased by the company. One investigative reporter who interviewed the company’s officers in Japan, informs me that Sports Shinko is controlled by Yakuza.
* * *
From the Honolulu Star-Bulletin, 7/6/98, by Rick Daysog: . . . House Speaker Joseph Souki was questioned by the state attorney general’s office over a Maui land deal involving the Bishop Estate that netted him a $132,000 commission. . . .
According to Souki, the state subpoenaed the Bishop Estate for information about its $5.3 million purchase of a 100-acre parcel in Pukalani, Maui, from developer Everett Dowling. Souki had served as a consultant to Dowling. . . . Bishop Estate plans to build its permanent Maui campus on the site. . . .
Estate critics have cited Souki’s involvement as a conflict of interest, saying he led opposition to a bill to limit the compensation of trustees of the Bishop Estate and other charitable trusts. After it failed on an initial vote, public pressure prompted the House to pass the measure. . . .
Souki has denied any wrongdoing, saying it was a private real estate transaction. . . .
As part of its inquiry into the Maui land deal, the state also has subpoenaed Dowling and state Sen. Joe Tanaka. . . . Tanaka earned $42,000 commission from Dowling last year but said his consulting work did not involve the Bishop Estate. Tanaka, who has not yet met with state attorneys, said he helped introduce Dowling to Sports Shinko, Inc., which originally owned the Maui property. . . .
State records show that Dowling acquired 273 acres from Sports Shinko in Dec. 1996, before selling 100 acres of it to the estate. . . .
See also: Bishop Estate; Yakuza.
Stanford University - Catbird Pondering: Hmmm. I know there’s a nest around here somewhere. Now just where . . . ?
See also: Rockefeller Foundation; Larry Yung.
Stephens & Company - From Compromised: Clinton, Bush and the CIA - “. . . I’m curious; how did Mr. Clinton and company gain access to our funds in First American?”
“Through bond business here in Arkansas. It seems this was brainchild of Mr. Dan Lasater. But with Mr. Lasater out of way, state has implemented the plan through biggest firm here in Arkansas, Stephens & Company.”
“Let me get this straight,” Johnson said. “Clinton needs money in order to keep his promises to bring industry to Arkansas. So, Stephens issues a municipal bond or whatever, and our bank, First American, buys or underwrites the goddamn thing. So our offshore money is laundered right here in Arkansas through legitimate industrial loans, and Clinton benefits?”
By “offshore” Johnson was referring to CIA money held in foreign banks to disguise the fact that it was money used to fund intelligence operations. This was a Cold War technique designed to prevent the money’s source from being traced back to Washington. . . .
Having run short on “laundry,” Clinton and his friends had tapped into other sources of “dirty money.”
* * *
The public would learn years later of the tenebrous connection between Stephens, First American Bank and the Bank of Credit and Commerce International, later to have its acronym, BCCI, emblazoned in headlines throughout the world. CIA Director Robert Gates later labeled it the “Bank of Crooks and Criminals, Inc.,” but admitted to its extensive use by the Agency.
And Jackson T. Stephens, the chairman of Stephens & Company in Little Rock, who would later be identified as the one who helped BCCI get its financial foothold in America, had replaced Lasater as the state’s investment banker of choice to attract new capital. . . .
* * *
For more GO TO > > > A Flock of Donkeys; The Donkey Nests
For More >>> Dubious Deals in Arkansas
For More >>> Rise UP! The Crimes of Mena
For More >>> Clinton Scandal Clips
Sumitomo Bank - This Japanese financial giant pumped around $500 million into Goldman Sachs in 1986. After Goldman’s IPO in 1999, Sumitomo held about a 6% interest in Goldman. In Hawaii, Sumitomo formerly owned the majority interest in Central Pacific Bank.
* * *
From Organized Crime Registry: Who Got Yakuza Into Our Banking System? — Business Week carried a feature story in its Jan 29, 1996 edition with the headline, “The Yakuza and the Banks” . . . The main focus of the parliamentary debate begun recently is whether tax money should be used to bail out the special housing loan companies, “jusen,” whose management collapsed under the weight of trillions of yen in bad loans. . . .
The seven failed jusen companies have a combined total of claims amounting to 13.2 trillion yen, at least half of which was lent to the yakuza (organized crime)-related companies at the peak of the economic bubble. . .
* * *
From futuresmag.com, - August 1996: The copper trader who fell from grace . . .
Yasuo Hamanaka is a name that has grown in notoriety. . . . Hamanaka, king of the copper market for the past 10 years, now makes losses from Codelco’s alleged rogue trader Juan Pablo Davila look like a petty miscalculation. Davila is in a Santiago prison facing charges that as Codelco’s chief trader he lost $200 million in an alleged scheme whereby he diverted business to various dealers for kickbacks. Davila says he lost the money on a computer error.
But that was only $200 million. This is $1.8 billion, and some market watchers have forecast losses for Sumitomo to reach as much as $4 billion. . . .
* * *
From www.aci.net/kalliste: How to Launder Money in the Copper Market: (Yasuo) Hamamada would often enter the copper market with large-size trades, and slam the copper price in this direction or that. The logic of the pattern of trading would often appear mystifying, creating paranoid uncertainty as to Sumitomo’s intentions in the minds of its competitors and counterparties.
But it all makes a little more sense when you realize Hamanaka was not only meeting the considerable copper-trading needs of the Sumitomo empire, but also conducting a major money-laundering operation for funds arising from the Southeast Asian heroin trade.
The press has lumped this affair into the convenient category of that of one more rogue trader operating without proper management supervision. This in itself is nonsense.
First of all, the operating assumption of both the press and the investigating authorities should be that upper management knew very well what was going on, as is usually the case.
Second of all, the “trading losses” are related to missing heroin money. Sumitomo is not about to announce that “a large sum of heroin money entrusted to our care is missing.” . . .
So the loyal Hamanaka takes the fall for “copper-trading losses.”
* * *
From Rueter’s News Service, 02/16/98: Sumitomo Bank and Bank of Toyko-Mitsubishi (BTM) Linked to Bribery Scandal:
Two of Japan’s leading banks, Sumitomo and Bank of Tokyo-Mitsubishi, were implicated on Monday in a widening bribery scandal involving officials at Japan’s powerful Ministry of Finance (MoF). . .
Tokyo prosecutors on Monday issued a fresh arrest warrant against tow MoF inspectors . . . on suspicion of receiving bribes from Sumitomo Bank and Bank of Tokyo-Mitsubishi, as well as Sanwa Bank, in exchange for confidential information. . . . Many of them were encroached by Kanto-based yakuza, incurring massive losses in failed stock and land speculation. . .
The article by Insider said: “MOF at the end of 1984, through the underground connections of former officials, requested the then leader of Yamahuchi Gumi, the late Takenaka Masahisa, to come to Tokyo and help kick out Kanto-based yakuza from Sogo banks.” . . .
At the time, Yamaguchi Gumi was in the midst of an internal breakup, and Takenaka needed money. He immediately complied with the request and went to Tokyo to start talks with the Kanto-based yakuza. But immediately after, he was killed by an unknown assassin.
However, taking advantage of this situation, Yamaguchi Gumi not only expanded its business territory but also started interacting openly with the bank’s top management with the consent of the Ministry.
For instance, Sumitomo Bank, originally headquartered in Osaka and weak in Tokyo, acquired a Tokyo-based Sogo bank, Heiwa Sogo Bank, from 1985 to 86. Through the acquisition, the Sumitomo offices in Tokyo increased, leading to their ascent to the number one position in the nation’s banking industry.
That was made possible by the Ministry and then Finance Minister Takeshita Noboru at the front, and Yamaguchi Gumi in the back. . . .
* * *
See: Bishop Estate; Central Pacific Bank; Goldman Sachs; Triads; Yakuza
Technology Strategies and Alliances - From The Buying of the President: . . . Defense Dollars and Deal Making. . . .
In Feb of 1995, the administration announced that for the first time it would consider the financial state of U.S. defense contractors when negotiating overseas arms sales. The administration has also pushed to relax export restrictions on high-tech equipment used to manufacture sophisticated weapons systems. Part of what has ingratiated the Clinton administration to weapons manufacturers has been the presence of William J. Perry, first as Deputy Secretary and later as Secretary of Defense.
Perry is a former defense consultant who headed Technology Strategies and Alliances (TSA) between 1985 and 1993. TSA’s 1994 clients included Boeing, Grumman, Lockheed, Martin Marietta, McDonnell Douglas, Northrop, Textron, Texas Instruments, TRW, Westinghouse, and 20 other defense contractors.
While Perry severed his ties with the company, he had amassed more than a million dollars in consulting fees from TSA’s clients. Not long after he joined the Defense Department, Perry began going to bat for the industry.
One of Deputy Defense Secretary Perry’s extra base hits came when he and then-Defense Undersecretary for Acquisitions and Technology John Deutch quietly agreed to provide U.S. defense contractors with taxpayer-finance subsidies for mergers and acquisitions. That was a dramatic shift in Pentagon policy. Usually, such issues are taken before Congress. Instead, Deutch, in a July 21, 1993 memo, reversed the Pentagon’s ban on the subsidies and underwrote $270 million worth of TSA client Martin Marietta’s acquisition of General Electric’s Aerospace Division.
Just seven weeks earlier, on June 3, 1993, industry CEOs, including Martin Marietta’s Norman Augustine, had sent a letter to Perry and Deutch asking for DOD funding of “restructuring costs” for mergers and acquisitions. Perry also approved Northrop’s $2.1 billion acquisition of Grumman. Both were TSA clients. The Pentagon called the policy shift a “clarification” that did not require congressional consent. . . .
The policy shift required both Perry and Deutch to seek ethics waivers from rules that call for a one-year “cooling off” period before Pentagon officials can deal with former clients. They got them from then-Defense Secretary Les Aspin, whom Perry replaced in February 1994. Paul Kaminski got an ethics waiver in November of 1994, when he was named to head the Pentagon’s Acquisitions and Technology Department, replacing Deutch.
Deutch remained in the Pentagon loop a while longer and became Deputy Secretary of Defense before moving to the CIA.
Kaminski, who worked at TSA, is responsible for awarding $43 BILLION in defense programs to Pentagon contractors.
The Kaminski appointment marked the first time former defense industry consultants filled the Pentagon’s top three policy posts. . . .
* * *
For more GO TO > > > A Flock of Donkeys; The Donkey Nests
See also: CITIC; People’s Republic of China; The Communist Party
The Commission on Presidential Debates - From the Commission’s website: . . . The Commission on Presidential Debates was established in 1987 to ensure that debates, as a permanent part of every general election, provide the best possible information to viewers and listeners. Its primary purpose is to sponsor and produce debates for the U.S. presidential and vice presidential candidates and to undertake research and educational activities relating to the debates. The organization, which is a nonprofit, NONPARTISAN (emphasis added) corporation, sponsored all the debates in 1988, 1992, and 1996.
* * *
In the 1996 presidential elections, the Commission refused to allow Reform Party candidate Ross Perot to appear in the candidate debates. Perot sued to be allowed to participate. He lost.
The Commission has recently announced the candidate selection criteria to be used in the 2000 debates: 1) Candidates must be constitutionally eligible to become president, 2) They must be on enough state ballots to have a mathematical chance to win in the Electoral College, and 3) They must average at least 15 PERCENT support in nationwide polls by ABC News/Washington Post; CBS News/New York Times, NBC News/Wall Street Journal; CNN/USA Today/Gallup; and Fox News/Opinion Dynamics.
According to the commission, the rules were designed to make sure that only candidates who have a realistic chance to win the presidency are included in the debates.
Under the 15% “opinion poll” rule, it appears that neither the Reform Party candidate (which will probably be Patrick Buchannan), nor the Green Party candidate, Ralph Nader, or any others will be allowed to participate in the debates.
* * *
In their Pro/Con arguments on whether the Reform Party candidate should be allowed to participate in the debates, VOTE.COM presented the following PRO argument: . . .
Exclusionary rules only benefit the establishment - The Reform Party is nationally recognized and it receives federal campaign funds. Yet for reasons beyond justification, the Commission on Presidential Debates has recommended rules that could exclude all but Democrats and Republicans from the general election debates.
Under the recommendations, a candidate who wants to be included in the debates must average 15 percent support in national polls to participate. Yet according to widely respected University of Virginia Political Scientist Larry Sabato, the reliability of such data is questionable.
“Polling is not that precise,” Sabato told the Associated Press. “Even when you average five polls you don’t eliminate the individual margins of error.”
Polling shouldn’t determine if voters should get the opportunity to learn about their options. Buchanan campaign co-chair Pat Choate points out that no third party Presidential candidate has ever been at 15 percent in September prior to the debates. “The only way that Perot rose above that level was to be in the 1992 debates. Prior to the debates he was at 7 percent. After, he got more than 19 percent of the vote.”
Former Democratic National Chairman Paul Kirk and former Republican National Chairman Frank Fahrenkopf head the Commission on Presidential Debates. By design, it seems slighted in favor of a two-party system.
“Let’s be plain,” says Reform presidential candidate Pat Buchanan. “This is nothing but a Beltway conspiracy by the two establishment parties to corner the market forever on the presidency of the United States.”
Reform Party chairman Jack Gargan agrees. “They picked the wrong time to play exclusionary politics,” he says. “The number of voters in claiming to be ‘independent’ is on the rise in our country ... If this set of protocols stand, we might as well box up this gift we call democracy and send it back postage due.”
* * *
The Catbird, being curious by nature, decided to see what other information could be found about this noble, nonprofit, nonpartisan, tax-exempt corporation. Here are some of the more interesting sightings:
The CPD’s creation came about as the result of the recommendations of two groups:
1) The Commission on National Elections, under the direction of the Center for Strategic and International Studies, Georgetown University, Washington, D.C.
2) The 20th Century Fund.
* * *
Findings of The Commission on National Elections on Presidential Forums
In its report, released in April 1986, the CNE included in its “official findings”:
● In the post-nomination period, the commission believes that American citizens have come to expect joint appearances by the major party nominees for the presidency. These joint appearances should be made a permanent part of the electoral process. They are such an important factor that they should not be left to the vagaries and uncertainties of each presidential election but rather ... should be institutionalized.
● The commission believes that this institutionalization is most likely to take place if the two political parties assume direct responsibility for sponsoring the joint appearances. . . .
● The commission therefore urges the two parties to assume responsibility for sponsoring and otherwise ensuring that presidential candidate joint appearances are made a permanent and integral part of the presidential election process. . . .
● Major questions remain regarding the equal time requirements for television coverage of party versus independent or third-party candidates. Yet in the commission’s judgement, the importance of television forums argues for erring on the side of favoring the party nominating process rather than the rights of other candidates. . . .
* * *
So just what, or who, is this Commission on National Elections?
At the time of its Report in 1986, the Commission Co-Chairs were Melvin R. Laird and Robert S. Struass.
There were 38 members on the Commission, and included such unbiased public-minded citizens as Lloyd Bentsen, Thornton F. Bradshaw, Tony Coelho, Frank J. Fahrenkopf, Jr., Vernon E. Jordon, Jr., and Robert Rubin.
The Staff Director was John F. Kennedy.
* * *
20th Century Fund Recommendations For Presidential Debates
Excerpted from a Twentieth Century Fund Paper, 1987:
Televised presidential debates provide a unique opportunity for Americans to see and hear the candidates for the presidency, and it is an opportunity that millions of Americans take advantage of. ... Therefore, we offer the following recommendations: . . .
● Quadrennial presidential debates should be institutionalized. . . .
● The Democratic and Republican parties should establish a bipartisan Presidential Debates Organization now to administer the 1988 debates. . . .
● The use of journalists as questioners should be eliminated in favor of allowing the candidates the opportunity of questioning each other. . . .
● The question of third-party candidates should not undermine the goal of institutionalizing debates between the Democratic and Republican party candidates. . . .
● To insure third-party access, other avenues, such as free television time for candidates, should be explored and adopted.
● As in 1960, Congress should suspend Section 315 of the Federal Communications Act for presidential and vice presidential candidates.
* * *
And just who are the patriots that made up this 20th Century Fund group? Well, included in its 31 members were none other than Ron Brown (Democratic National Committee), Walton Chalmers (Democratic National Committee), Walter Mondale (Former Vice President), and David F. Norcross (Republican National Committee). Members representing any third party were conspicuous, as they say, by their absence.
* * *
Based on the “official findings” of these two groups, the Commission on Presidential Debates was ultimately hatched to take CONTROL of the Presidential debates.
* * *
From the Commission’s own website: . . . The CPD is not affiliated with any political party. It does not lobby, take positions on political issues, or report on elections. The CPD accepts no money from the government or political parties and it finances the debates entirely through private contributions. . . .
So far, so good?
Well, let’s just take a look at the public-spirited sponsors of these debates in the 1992 and 1996 elections:
1992 National Sponsors
AT&T; Atlantic Richfield; Sheldon S. Cohen (Morgan, Lewis & Bocklus); Dun & Bradstreet; Ford Motor Company; Hallmark; IBM; The Marjorie Kovler Fund; J.P. Morgan & Co.; Philip Morris Companies; Prudential.
1996 National Sponsors
Anheuser-Busch; Sheldon S. Cohen (Morgan, Lewis & Bocklus); Dun & Bradstreet; Joyce Foundation; Lucent Technologies; The Marjorie Kovler Fund; Philip Morris Companies; Sara Lee Corp; Sprint; Twentieth Century Fund.
Hm-m-m-m. . . .
* * *Who are the current leaders in the Commission on Presidential Debates?
The Commission is co-chaired by Frank J. Fahrenkopf, Jr. (who served as Chairman of the Republican Party during Ronald Reagan’s tenure, and is currently the President and CEO of the American Gaming Association.), and by Paul G. Kirk, Jr.
Honorary Co-Chairmen are Gerald R. Ford, Jimmy Carter and Ronald Reagan.
The Board of Directors are Clifford Alexander, Jr., Howard Buffett, Senator Paul Coverdell, John Danforth, Rep. Jennifer Dunn, Antonia Hernandez, Caroline Kennedy, Newton Minow and Dorothy Ridings.
The Executive Director is Janet H. Brown.
And if you still believe that the public only needs to hear the views of Al Gore, Joseph Lieberman, George W. Bush and Dick Cheney in the coming election, perhaps you should read further . . .
See: A Simple Solution to Campaign Finance Reform
See also: AT&T; The Communist Party; The Democratic Party; The Lobbyists; The Media; The Republican Party;
And in Part I: Al Gore; Dan Lasater; Dick Cheney; Don Tyson; Frank J. Fahrenkopf; George Bush; George W. Bush, Jr.; Joseph Lieberman; Richard Rainwater; Ron Brown; Terry McAulliffe; Thomas Hicks; William Clinton.
The Communist Party - From The American Spectator, June, 1997: While America Sleeps.
Since 1993, front companies for Communist China have been actively buying up (and spying on) the U.S. — which is fine by Washington and Wall Street.
by Kenneth R. Timmerman
What else is Bill Clinton willing to do to aid Communist China?
So far the President of the United States has accepted campaign contributions from mainland Chinese donors, sponsored questionable investments for them in the U.S., approved the sale of sophisticated technology to the Chinese military, failed to enforce U.S. laws when the Chinese sell cruise missiles to Iran by sanctioning the Chinese firms involved, welcomed the most notorious Chinese arms dealer into the White House, and encouraged the man’s firm to raise money in U.S. capital markets.
It’s an appalling record by any standard — and there’s apparently no end in sight for Clinton’s open-arms policy toward Peking. . . .
While federal investigators are just beginning to untie the knots of Chinese government attempts to influence the White House and other elected officials through campaign contributions and other means, it is overwhelmingly clear that Peking has recognized that the U.S. is easy enough to infiltrate. Chinese state-run companies are snatching up strategic real estate in places like Long Beach, California, where they plan, with Clinton’s warm approval, to turn a former U.S. Navy base into a container port to be used by a company identified by U.S. counterintelligence officials as a front for Chinese espionage efforts.
Meanwhile, the Chinese government’s leading business conglomerate, CITIC, has been floating bond issues in the U.S., tying the knot with major U.S. investment banks who are lobbying Congress against revoking China’s Most Favored Nation (MFN) trading status. People’s Liberation Army (PLA) weapons firms have set up shop on our shores through a variety of front companies and obscure subsidiaries.
China’s “stealth” invasion has also included old-fashioned influence peddling. The Wall Street Journal revealed in March that the state-owned Bank of China made wire transfers “in increments of $50,000 and $100,000 to Clinton crony Charlie Yah Lin Trie, who then donated large sums to the DNC and Bill Clinton’s Legal Defense Fund.
In exchange, Trie was granted direct access to the White House and an appointment to a presidential Commission of U.S.-Pacific Trade and Investment Policy. In Feb, 1996, he brought Wang Jun, the head of China’s notorious state-run arms company, Poly Technologies, to the White House for coffee with the president. . . .
Trie is not the only White House visitor with direct business ties to the PLA. Johnny Chung, the California businessman who contributed $366,000 to the DNC is exchange for open access to the Clinton White House (which he visited no fewer than 51 times) has brought a number of questionable visitors to 1600 Pennsylvania Avenue. In March 1995, Chung brought along Jichun Huang, identified in White House records as a CITIC v.p. . . .
On Dec 24, 1994 (Christmas eve), Chung brought Chen Shizeng, the president of a Chinese beer company, Haoman, to meet with Clinton. After the meeting, Chung squired his Chinese guest over to the Commerce Dept to discuss how to facilitate the sale of Haoman beer in the United States. Chung also set up a meeting with Energy Secretary Hazel O’Leary for the head of China’s state-run petrochemical company, Sheng Hauren, in Oct 1995.
Chung also happens to be the American representative of the daughter of a senior Chinese general, Liu Huaqing, who may have been hoping to use Chung’s influence with Clinton to gain favors and access to U.S. technology. General Liu sits on virtually every leadership panel of the People’s Republic of China, including the Politburo of the Chinese Communist Party. (He is also the Vice Chairman of the Central Military Commission, which overseas the PLA’s vast empire of defense, industrial, and trading companies.)
His daughter, Liu Chao Ying, is a managing director of China Aerospace International Holdings (CASIL), a Hong Kong subsidiary of China Aerospace Corp. Controlled by China’s Ministry of Aerospace Industry, CASIL manufactures everything from missiles to semiconductors, telephone switching equipment, and fax machines. In its 1997 annual report, the company boasts that it has become “the largest ‘window company’ of China Aerospace Corp both in Hong Kong and overseas,” and soon plans to open up a major U.S. operation, CASIL (America).
It also has joint investments with the notorious Lippo Group. . . .
* * *
For More >>> Could a Traitor Do Any Worse Than Clinton?
For More >>> Tenacious Tentacles
For More >>> A Simple Solution to Campaign Finance Reform
For More >>> Year of the Dragon?
The Democratic Party - From Year of the Rat - How Bill Clinton Compromised U.S. Security for Chinese Cash . . .
Even if composed of hundred dollar bills, $175,000 in cash makes quite a bundle. We can only imagine what went through the minds of Treasury Department officials as Macau criminal syndicate figure Ng Lapseng sailed through the San Francisco airport on June 20, 1994, after declaring that amount of money— in cash.
Within two days Ng was dining at the White House mess with presidential aide and Democratic Party fund-raiser Mark Middleton. Later that evening Ng and his associate Charlie Trie would make honored guest appearances at a DNC-sponsored Presidential Gala. . . .
* * *
In late 1996 and throughout 1997 ... we learned that President Clinton was personally involved in raising and channeling millions of dollars in Democratic Party contributions to his own reelection campaign ... The Democratic Party accepted millions of dollars in illegal contributions from foreign nationals, many of whom met personally with the President.
Vice President Albert Gore, Jr., spoke at a fund-raising event at a Buddhist monastery in Los Angeles, and everyone from a Columbian drug trafficker to Chinese arms dealers passed through the White House, obtaining access for cash.
Separately, from January 1995 to August 1996, the White House hosted 103 coffees— attended by 1,544 people seeking “face time” with the President, the Vice President, and their spouses— who collectively contributed at least $26.4 million to the Democratic Party for the 1996 election.
Besides being rewarded with overnight stays at the White House and Camp David, in 1995 and 1996, major Democratic Party donors and fund-raisers rode on Air Force One, Marine One, Air Force Two, and Marine Two (the latter two are the Vice President’s aircraft) more than 300 times.
In addition, both the President and Vice President solicited campaign contributions by telephone from the White House ... At first Gore said that he dialed for dollars “on a few occasions”; he later acknowledged that he did it 56 times. This was the potentially criminal matter that produced the now infamous statement by the Vice President: “My counsel advises me that there is no controlling legal authority or case that says that there was any violation of law whatsoever in the manner in which I asked people to contribute to our reelection campaign.” . . .
Sadly, Gore was right. None of this unprecedented activity, which certainly had the stench of misconduct and impropriety, was seriously prosecuted by the Justice Department. Only the small fry were pursued. Attorney General Janet Reno steadfastly refused to name an independent counsel to investigate the various 1996 campaign finance allegations.
And when the Senate Governmental Affairs Committee attempted to investigate the 1996 election more than 45 potential witnesses fled the United States or invoked the Fifth Amendment...
To add insult to injury, the following year Americans suffered through Monica Mania, ending with the first impeachment of an elected President in U.S. history. ... In 1998, we reached the lowest point in our nation’s political discourse and decorum, including the most blatant, look-you-in-the-eye-with-a-straight-face lying by a sitting President ever. . . .
And let us not forget that this whole sordid episode got its start with campaign contributions: Lewinsky became a White House intern in the first place because a friend of her family had given more than $330,000 to the Democratic Party. . . .
For More: A Flock of Donkeys
For More: The Donkey Nests
For More: Tenacious Tentacles
For More: Sen. Dan Burton’s Campaign Finance Reform Committee
For More: John Chung Tells About Chinese Campaign Donations
For More: The Buying of the President
For More: Year of the Dragon? Why Congress Should Vote NO!
For More: A Simple Solution to Campaign Finance Reform
See also: The Commission on Presidential Debates; The Media;
The Justice Department - From Sellout: The Inside Story of President Clinton’s Impeachment, by David P. Schippers: . . .
It was the morning of Jan 14, 1998 ... I saw a message on my desk to call Henry Hyde. ... He called me back an hour or so later and said that he, as the Chairman of the Judiciary Committee, was interested in beginning an oversight of the Justice Department. He told me the Justice Department hadn’t had any oversight for something like twenty years ...
He gave me some broad background of what he wanted to do ... and we agreed that he’d come out and see me to talk it over.
Then the story broke about the President, the intern, a possible cover-up, and a likelihood that Independent Counsel Kenneth Starr— whose people were already investigating Bill Clinton’s alleged sexual assault on Paula Jones, not to mention Whitewater, former Associate Atty Gen Webb Hubbell, and campaign fund-raising irregularities involving China, Indonesia, and the Riady group— might be involved.
So, the next time I talked to Henry, in the last week of January, he said to me, “Dave, I think there is a possibility that we may have the ‘I’ problem.”
“The ‘I’ problem?”
“God forbid we may have to go into an impeachment inquiry.”
I reminded Henry that not only was I a Democrat, but my cousin Tom Lyons was the Cook County Chairman of the Democratic Party . . .
“Well, it’s highly unlikely it will come to that, but if you’re doing oversight and Starr brings over material, you need to be prepared to changes horses immediately and analyze it.”
I had known Henry since 1968. At that time I was a Democratic appointee to the Illinois Crime Commission, and he was a state representative. One of the first things he said to me was, “Just remember, don’t let anybody interfere with your ideas of what you think is right and wrong; just do what you have to do and everything will be fine.” I always respected him, even if I disagreed with him politically.
I had worked for U.S. Attorney General Robert Kennedy and was extremely active in Democratic politics— as my entire family had been for generations. I didn’t realize until I was ten that it was “Republican,” not “damn Republican,” and I grew up believing that the lowest thing you could do was to be a registered Democrat and vote Republican. I voted for Bill Clinton. Twice. I did it because he was the Democratic candidate for President of the United States. . . .
Despite all that, I was also interested in doing what sounded like a necessary and important job, and my family supported that decision. . . .
Hyde’s decision to hire me wasn’t popular, as I discovered when he introduced me to the Republican members of the Judiciary Committee. It was no secret that I lacked experience in Washington politics. I often heard people say, “He’s not a K Street lawyer.” By that they meant I wasn’t one of those fancy-suit, $500-an-hour, Ivy League guys from an influential Washington firm. . . .
Our oversight investigation began by analyzing more than a dozen separate allegations concerning the Department of Justice and its subagencies. We knew our time was limited and that once Judge Starr’s referral on impeachable offenses was received, we would have to abandon our efforts in other areas. So we quickly narrowed our scope.
It was narrowed further because the Justice Department flat-out wouldn’t cooperate with our investigation.
We asked to talk to some people in the Immigration and Naturalization Service (INS). They said, “No.”
We asked to talk to some Assistant U.S. Attorneys. They said, “No.”
And so on.
Henry Hyde arranged a meeting between me and Attorney General Janet Reno and members of her staff so that I could talk this through with her. She promised to cooperate fully— but then added that we would have to clear any interviews with the department.
I reminded her: “We have people who are claiming that their own bosses are doing illegal activities. We’re not going to go through you. We’re going to talk to these people.”
“They’re not allowed to talk to you.”
“If we have people who are Justice Department employees who have information about illegal activity in the Justice Department, I’m not going to go to the Justice Department and tell them who we’re talking to and what they’re telling us.”
“They’re not supposed to talk to you.”
“I really don’t care. We’re going to do it.”
After that meeting, a Justice Department staffer told me: “Dave, you’re not from Washington. You don’t know how we operate out here.”
“You’re right, I’m not from Washington— but you don’t know how I operate. We’re going to get this stuff ... If you try to stop us, you may find yourself involved in obstruction of Congress.”
I did this without approval from anybody; I didn’t think I needed it. When I told the Judiciary Committee staff, they were appalled.
All they could say was, “You can’t do that!”
And all I could say was, “I just did.”
INJUSTICE FOR ALL
My staff and I agreed that we needed to focus on the Immigration and Naturalization Service (INS), which appeared to be running out of control.
By the time we came to the subject, investigations by the General Accounting Office (GAO) and congressional committees had already indicated that the White House used the INS to further its political agenda. A blatant politicization of the agency took place during the 1996 presidential campaign when the White House pressured the INS into expediting its “Citizenship USA” (CUSA) program to grant citizenship to thousands of aliens that the White House counted as likely Democratic voters.
To ensure maximum impact, the INS concentrated on aliens in key states— California, Florida, Illinois, New York, New Jersey, and Texas— that hold a combined 181 electoral votes . . .
The program was placed under the direction of Vice President Al Gore. ... He was responsible for keeping the pressure on, to make sure the aliens were pushed through by Sept 1, the last day to register for the presidential election. . . . The White House, the INS, and the Justice Department publicly denied any political motive in the CUSA program to expedite the citizenship procedure. What the United States got is undeniable:
1.More than 75,000 new citizens who had arrest records when they applied;
2.An additional 115,000 citizens whose fingerprints were unclassified for various technical reasons and were never resubmitted; and
3.Another 61,000 people who were given citizenship with no fingerprints submitted at all. . . .
What we had here was a perfect example of the Clinton-Gore administration’s overarching political philosophy: “The ends justify the means,” coupled with “win at any cost.” It was a philosophy of governance that, as our investigations into other areas proceeded, we would find repeated again and again. . . .
In June 1998, as part of our oversight investigation of the Justice Department, we continued the investigation of CUSA. Our interest intensified when we heard unconfirmed reports that a similar plan was in the works for the next presidential election. . . .
In the course of our investigation, we discovered that FBI arrest records were still missing from the proper files; many were still in boxes. We unearthed that several individuals who had been naturalized illegally were now trying to sponsor their relatives fro citizenship. We found sponsors who were unable to speak a word of English, a condition that should have prevented naturalization
Similarly, we uncovered arrest records or other information that should have been disqualifiers for naturalization. But ... INS agents who had found these irregularities were ordered to ignore them and to revoke citizenship only in cases ordered by the auditors. . . .
We received no cooperation from either the Justice Department or the INS. Instead we received nothing but complaints about not going through proper channels, investigating old news, being partisan— if not racist— and so on. But we reasoned that if criminals were given citizenship in 1996, at least some of them had probably continued their criminal activity in the two years since.
We asked the GAO ... to give us FBI arrest records related to the CUSA program ... We reviewed every document in those boxes, pulling out about a hundred of the most violent or serious crimes committed by aliens prior to naturalization and documented by arrest records. ... I asked the staff to search for drug trafficking and violent crimes such as rape and child abuse ... After a few days ... we had our basic 100 heinous crimes, including one criminal who was actually in fail at the time he was naturalized.
We asked the FBI if it had arrest records for crimes committed by the same aliens in this country since 1996 and sent them our 100 profiles.
Less than a week later, the FBI sent the updated arrest records to the Justice Department. (Per an agreement between the FBI and the Justice Dept, all materials requested from the Bureau must go through Justice.) But when we inquired about them, the department claimed that it hadn’t yet received the records. An hour later, however, Justice called back to say that the “misplaced” reports had been located.
Of those one hundred arrest records updated by the Bureau, some 20 percent showed arrests for serious crimes after the subject was given citizenship. . . .
Based on these random results, we asked for updates on every arrest record in our 20 boxes. ... Unfortunately, before we could go further, the referral from Independent Counsel Kenneth Starr arrived. Had we been given sufficient time to develop evidence and witnesses, the CUSA matter might have been included in the abuse of power impeachment article.
The 1996 arrest records are still available, and I am sure the FBI is still willing to update all of them. In the meantime, thousands of criminals are now citizens of the United States because it was assumed they would vote for Bill Clinton and Al Gore....
* * *
That was just one of the things we were doing during the summer months of 1998. We had investigations opened on the DEA and the Bureau of Prisons, where allegedly a prison employee had killed an inmate in jail and officials there had covered it up.
We were also looking into the many referrals to the Justice Department that had been ignored. There were accusations that lies had been told about who was on Hillary Clinton’s health care task force. A judge had recommended that the Justice Dept investigate, but nothing had been done.
Allegations of serious campaign abuses in New York had been brought to the Justice Dept, but again no action resulted. . . .
* * *
See in Part I: Al Gore; Janet Reno; William J. Clinton
The Lobbyists - From Washington on $10 Million a Day - How Lobbyists Plunder the Nation:
PIMPS TO POWER
Lobbyists and the Destruction of Democracy
When Fortune published its 1997 list of the nation’s top 500 corporations, the magazine could barely restrain its exuberance. The previous year had been “extraordinary” with regard to profitability, Fortune said, as companies “restructured, reegineered, refinanced, downsized, laid off, split up, and merged their way to prosperity.” . . .
For business and the wealthy, these past few years truly have been the best of times. Profits at Fortune 500 firms rose by 23.3% in 1997, after climbing by 13.4% the previous year.
Salaries for top managers are also soaring. Business Week ... says executive pay is “Out of Control.” The magazine reports that the average salary and bonus for CEOs at the nation’s biggest firms rose by 39% in 1996, to $2.3 million. Total compensation, which includes retirement benefits, incentive plans and stock option packages, was up 54%, to $5.7 million.
Corporate America’s hired help didn’t do nearly as well. Workers’ salaries rose about 3% in 1996, leaving average compensation for CEOs at 209 times higher than that of factory workers.
Meanwhile, the wealthy are paying less and less to the treasury in the form of taxes. . .
Corporations are also avoiding tax payments. Two loopholes Congress provided to companies with operations overseas— the foreign tax credit and tax deferral of foreign income— cost the treasury about $24 billion per year. . . .
Huge corporate profits and low taxes for the wealthy do indeed result from a “favorable economic climate,” but there’s nothing magical about it, as Fortune would have you believe. The politics behind the favorable climate are designed by politicians who are dependent on cash from Corporate America to finance their political careers. The deluge of business dollars— in 1996, the parties and their candidates raised $2.1 billion, an average of $5.75 million every day— means that elected leaders are sure to implement policies designed to fatten their sponsors’ bottom lines.
The link between campaign donations and political policy was brought into sharp focus by the campaign finance scandals that erupted during the 1996 campaign. Even jade observers were started by the Clinton administration’s selling of the Lincoln bedroom to the highest bidder, and its organizing of White House coffee klatsches to reward donors and encourage them to make additional contributions.
But political contributions are only one way that big business wins favors in Washington. ... Understanding how the capital works, and how business prospers here, requires a trip through the world of beltway lobbying and a review of the vast army of hired guns working at the behest of Corporate America.
Dollar for dollar, lobbying is a better investment than campaign contributions— one reason business spends far more on the former than on the latter.
In 1996, Philip Morris coughed up $19.6 million for lobbying programs vs. $4.2 million for campaign donations (making it the leader in both categories). The same pattern holds true with other firms.
For 1996, Georgia Pacific spent $8.9 million for lobbying and handed out $527,000 in political money. Corresponding figures for AT&T are $8.4 million vs. $1.8 million; for Phizer, $8.3 million vs. $775,000; for Boeing, $5.2 million vs. $770,000; for ARCO, $4.3 million vs. $1.4 million; for Lockheed, $3.5 million vs. $1.26 million; for FedEx, $3.1 million vs. $1.9 million; for Dow Chemical $1.5 million vs. $578,000.
In addition to in-house efforts, most big corporations spend lavishly for outside lobbying firms. Lockheed, for example, retains at least two dozen beltway lobby shops to supplement its own efforts, while FedEx has an additional 10 firms on retainer.
In 1996, Boeing hired seven outside lobby shops for the sole purpose of pushing renewed Most Favored Nation trade status for China, paying them a combined total of at least $160,000 for their efforts.
While corporate lobbying has long been a major force in American politics, it has been greatly transformed during the past few decades. Today, many efforts involve stealth lobbying— the chief tactic here is mobilizing fake “grassroots” campaigns— or with indirect methods, such as buying research from friendly “think tanks” in order to influence Congress and public opinion. All of this makes calculating corporate lobbying expenditures nearly impossible, though it’s safe to say that lobbying has now become a multi-billion dollar-per-year industry. . . .
When you consider the enormous benefits bestowed on Corporate America by the White House and Congress, the big sums companies spend to win favors are revealed as chump change. Lockheed’s combined expenditures on lobbying and campaign contributions were about $5 million in 1996. That same year, Lockheed’s lobbyists, with help from other arms makers, won approval for the creation of a new $15 billion government fund that will underwrite foreign weapon sales.
In 1996, Microsoft spent less than $2 million for its combined lobbying and campaign contribution expenditures (the former accounted for more than two-thirds of that amount). The following year, Congress awarded the company tax credits worth hundreds of millions of dollars for the sale of licenses to manufacture its software programs overseas....
It is indisputable ... that corporate citizens who retain lobbyists have an enormous advantage in Washington over the regular ones who merely vote. Tommy Boggs, perhaps Washington’s best known influence peddler, charges $550 per hour for his services. That’s a drop in the bucket to Philip Morris, but Boggs’ rate would eat up the average salary earner’s entire annual income after a mere 43 hours of lobbying activity.
That lobbying has corrupted the political system is no secret. During his 1992 presidential campaign, Bill Clinton promised to “break the stranglehold the special interests have on our elections and the lobbyists have on our government.”
Such promises (like many others the president made) were forgotten as soon as the election votes were counted. Clinton picked