Posted on 03/16/2005 11:11:55 AM PST by NormsRevenge
WASHINGTON - Not just Riggs Bank, but eight others — including Citigroup and Bank of America — helped former Chilean dictator Augusto Pinochet (news - web sites) and members of his family build a secret network of accounts to conceal his wealth, Senate investigators have found.
In a report released Tuesday, the investigators charged that Riggs's dealings with Pinochet were far more extensive and long-standing than had been known.
The nine banks allowed Pinochet to use phony account names, offshore companies and other deceptions to hide an estimated $13 million or more from U.S. examiners and from international prosecutors seeking to seize assets they allege were pilfered from Chilean government funds, according to the report by the staff of the Senate Governmental Affairs investigative subcommittee.
For some of the banks, Riggs and Citigroup among them, the relationship with Pinochet and his family went back a quarter-century, the investigators found. They said all the banks cooperated with their five-month inquiry.
The accounts have since been closed. But the investigators' findings raise questions about the oversight of the banks by federal regulators, who already have been faulted for failed supervision of Riggs's operations in the face of repeated lapses.
The findings illuminate "another chapter in a very tawdry episode in American banking," said Sen. Carl Levin (news, bio, voting record) of Michigan, the subcommittee's senior Democrat.
Riggs pleaded guilty in January to a criminal felony charge of failing to report suspicious transactions to authorities, including those in Pinochet's accounts, and has agreed to pay $41 million in civil and criminal fines to the U.S. government.
The handling of Pinochet's accounts by Riggs managers came to light last July following a yearlong investigation by the Senate investigative panel. It found that managers at the Washington institution, working with Pinochet from 1994 to 2002, set up phony offshore companies to hide his assets.
Pinochet's son, Marco Antonio Pinochet Hiriart, called the first report by the Senate investigators "mere lies."
But the new report, based on an additional investigation begun in November, says Riggs' relationship with Pinochet and his family stretched from 1979 to 2004 and there were 28 Pinochet-related accounts and certificates of deposit at the bank — rather than the nine previously reported.
Riggs spokesman Mark Hendrix said the new report "underscores that many of the problems depicted as unique to Riggs unfortunately appear to be systemic in the banking system today."
When the first report was published, he said, Riggs investigators "took the initiative to pursue unresolved issues that the report raised ... (and) found significant information not previously known to exist, all of which it provided" to the subcommittee staff.
Riggs has agreed to be acquired by Pittsburgh-based PNC Financial Services Group Inc. for $643 million in cash and stock; the deal is scheduled to be completed by the end of May.
Citigroup, the largest U.S. financial institution, opened 63 accounts and CDs for Pinochet and another 19 for family members, and arranged international wire transfers, set up offshore companies and made large loans for Pinochet and his relatives, according to the report. In addition, it said, New York-based Citigroup, whose operations span the globe, provided some Pinochet family members with accounts, CDs and lines of credit in other countries, including Argentina, the Bahamas, Britain, Chile and Switzerland.
In a statement, Citigroup said its accounts for Pinochet, "which he opened with false documentation using pseudonyms, were shut down nearly a decade ago" and the bank began closing any remaining accounts for his children in 1998.
In the late 1990s, Citigroup was criticized by lawmakers for its handling of millions of dollars deposited by officials of several foreign countries who were accused of money laundering and corruption.
Bank of America maintained three accounts and as many as six CDs for one of Pinochet's daughters, Ines Lucia Pinochet, according to the 83-page report.
"Bank of America cooperated fully with the subcommittee in its investigation, conducted a thorough internal investigation and submitted documents as requested," the Charlotte, N.C.-based bank said in a statement. It said the accounts in question were closed last year.
The others named in the report are Banco de Chile's U.S. operation; Espirito Santo Bank, Ocean Bank and PineBank in Florida; Banco Atlantico, now part of Spain's Banco de Sabadell; and Coutts & Co. (USA) International, now part of another big Spanish bank, Banco Santander.
Officials at the Miami offices of Ocean Bank and PineBank didn't immediately return calls seeking comment. Spokesmen for Espirito Santo in Miami, Banco de Chile, Banco de Sabadell and Banco Santander couldn't be reached after business hours Tuesday.
I think I'm going to start an account with Riggs today. They're even giving away $20 for starting one up!
Just tell 'em Pinochet sent ya. ;-)
In point of fact, Chilean prosecutors appointed by the General's enemies claim that only $3.6 million of the General's personal fortune was illegally obtained - and that it was illegally obtained not through theft of assets or misappropriation of government funds, but that it was his own income retained through illegal tax shelters.
All the people who routinely call Pinochet an evil dictator, a brutal tyrant, etc. have to ask themselves why this monster of Hitlerian proportions only managed to allegedly squirrel away an average of $211,000 per year by giving himself special tax breaks. Of course, it may well be the case that the General's tax returns were not fraudulent. I wonder if any other dictator ever bothered to file a yearly return.
BTW, why did the US Senate conduct an investigation of Riggs in a matter that would normally be investigated by a federal bank examiner? Pure politics.
The way Pinochet has been treated and is being treated is disgraceful. He rescued Chile from communism and the horrific internal blood bath communism ALWAYS brings to any country it infects. The people of Chile are free and prosperous today becuase of him and his courageous overthrow of Allende and the communists. It's appalling for any U. S. governmental entity to be investigaing him in any way.
Yes, well, notice this report comes out of the Minority side, Sen. Levin (D-Communist) to be precise, who had to have leaked it, in its entirety, to the leftist reporter who wrote this, whom I happen to know is also badly dressed and ill-groomed. Had it hand-fed by Levin's staff, no doubt. Go figure. You are right on target about Pinochet, who by the way is completely gaga now. There country would be just another disfunctional banana republic, say Venezuela without oil, if it weren't for Pinochet. Instead it is a prosperous democracy with a growing middle class.
Angie Dickinson once said the only people the Mob killed in Vegas were the ones who needed killing. Same's true for the subhuman communist scum Pinochet terminally flushed in Chile.
And the leftists in the senate, like the disgraceful Carl Levin, are spending their time on this? Was there a Che Guevarra poster on the wall in the background?
Fortunately for today's Chile, Pinochet sent a lot of those leftist twits on an extended vacation to prison and far worse. They breed like rabbits so it's hard telling how long it will last. The resulting country is Bush's model for privatizing social security. The excellent highway system are tollways with semi-trucks paying a lot more than cars as they should. The national park system is outstanding. There is a very fair $100 entrance fee because it costs a Chilean citizen about $140 for a visa to the US. I could go on, but suffice to say "Chile is waiting to happen!"
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