Charities 'linked' to bin Laden
Not for commercial use. Solely to be used for the educational purposes of research and open discussion.
The FBI is convinced many of those who helped finance Osama Bin Laden's al-Qaeda network were involved in the BCCI scandal. The New York district attorney's office, which led some BCCI prosecutions, has given the FBI access to its old case files on the world's most spectacular banking collapse. A source said: "The FBI believes many of the key figures in the BCCI affair also have roles in financing al-Qaeda." |
The CIA used BCCI as a channel to fund the Afghan fighters who resisted
The businessman invested money in the US on behalf of Bin Mahfouz. The Sunday Express revealed three weeks ago how Bin Mahfouz, who paid $ 225million after a plea bargain with New York prosecutors over his role in BCCI, and who was accused in the Irish parliament of helping to finance Bin Laden's terror network, was a "core shareholder" along with Barclays in a Guernsey-registered bank. |
Not for commercial use. Solely to be used for the educational purposes of research and open discussion.
Vicente Fox says he wants to fight the in the Mexican government. But, to be successful, he will need more vigorous law-enforcement efforts from Washington.
Mexico welcomed its first democratic government in almost a century with the inauguration of conservative/populist president Vicente Fox Quesada on Dec. 1, 2000. Fox says he is committed to fighting corruption and narcotics trafficking, yet the former governor and businessman faces a daunting task. The Mexican bureaucracy continues to be dominated by the corrupt Party of the Institutional Revolution (PRI)
In January, Fox met in Washington with members of Congress from both political parties to discuss an end to the annual U.S. certification of Mexico's efforts against drug traffickers. The congressional group, led by Sen. Phil Gramm, R-Texas, said it would work to eliminate the certification law that has created growing tensions between the two nations. President Bush supports legislation to accomplish this. Yet law-enforcement officials say commercial, diplomatic and personal conflicts in Washington are likely to remain major obstacles to winning the war against drug trafficking and money laundering. "The good news is that Mexico has a new leader committed to fighting corruption," a veteran Drug Enforcement Administration (DEA) operative tells Insight. "The bad news is that Washington has been unwilling to act against the top people who protect the cartels. The leading Mexican families are longtime friends with key U.S. political leaders: summit meetings, fishing and hunting trips, friendships among the wives and kids. They use the same clubs and lawyers." Official indifference toward violations of U.S. law by the Mexican elite is illustrated by the scandal surrounding former president Carlos Salinas and his brother, Raul, known as Raulito in honor of their father, Raul Salinas Lozano. Former president Salinas was in office from 1988 to 1994 and repeatedly has denied knowledge of more than $200 million stockpiled in Switzerland by his brother. During a trip to Mexico last year to promote his new book, however, the former president was stunned when it was revealed that in a taped telephone conversation his brother had alleged that Carlos Salinas, contrary to assertions in his book, was the true owner of millions of dollars siphoned in part from government accounts, according to Mexican prosecutors. The government of Fox's predecessor, Ernesto Zedillo, verified the authenticity of the taped telephone conversation, which was broadcast by Mexican media giant Televisa. The Los Angeles Times excerpted the remarkable confession: "I think it's very stupid on his part to say that he's going to demand a precise clarification of the funds , and I'm going to give it to him, Adriana," says the man identified as Raul Salinas. "I'm going to clarify everything - where the money came from, who was the intermediary, what it was for, where it came from and where it went. I'm going to say what funds came from the public treasury so that they're returned." The woman identified as Adriana begins to argue, but Raul declares: "Carlos shows gigantic cowardice. The money is his. And then he says he doesn't know anything about it." The Swiss government sent Fox an official letter on Nov. 9, 2000, asking Mexico to participate in the investigation of Raul Salinas and former president Salinas, according to the respected weekly Proceso. The Swiss also cite several others with ties to the Salinas clan: Carlos Peralta Quintero, Carlos Hank Rhon and Raymundo Gomez Flores, the former head of the defunct Banca Cremi. Swiss investigators say they have determined that Banca Cremi actually was controlled by Raul Salinas. Carlos Cabal Peniche, the fugitive PRI money-laundering king now jailed in Australia, was the front man for the bank and reportedly the chief moneyman behind Carlos Salinas.
In 1987, Federico de la Madrid began to make weekend visits to the state of Tabasco with Carlos Cabal. The young men paid cash to buy the best banana plantations and other real estate in the Gulf Coast state, according to Fernandez. A decade ago, Manhattan District Attorney Robert Morgenthau investigated these matters when Carlos Cabal was charged in New York with civil fraud by a former director of BCCI, Prince Khalid bin Mahfouz. The Saudi national claimed that Cabal stole around $70 million through a scheme involving his now-defunct New York firm, Eastbrook Inc. Though virtually ignored in the United States, this episode in the larger BCCI affair was an important precursor to the alleged subsequent financial fraud reportedly designed and executed by Carlos Cabal, including the movement of millions of dollars through Citibank in New York by the Salinas family. Swiss prosecutor Paul Perraudin claims, according to Proceso and other Mexican news outlets, to have uncovered links between the drug lord Juan Garcia Abrego and the Salinas family, including massive real-estate investments in Tabasco. Swiss investigators say they have evidence of the Salinas family and their political allies using Banca Cremi to launder tens of millions of dollars. The money allegedly was sent from Mexico to Switzerland via Citibank in New York, leaving an unmistakable electronic trail. Citibank was rumored to be the subject of two separate grand-jury investigations in 1996, but no indictments were brought. "The U.S. Department of Justice has prepared a series of indictments against Raul Salinas for extortion and narcolavado drug-money laundering ," wrote Carlos Fernandez Vega in the Mexico City daily La Jornada on July 29, 1996. "Charges have also been drawn up against Citibank and its highest officials, including Chairman John Reed, for criminal conspiracy and violations of law by the company in connection with money laundering." The U.S. attorney for the Southern District of New York has for years refused to comment on the existence of an investigation into whether Citibank or its employees should be charged with money laundering. A spokesman for the Department of Justice, however, confirmed to Insight last week that an investigation still is under way - eight years after the fact - suggesting Justice, not the U.S. attorney in New York, is in charge. Citibank declined comment. Despite all of this reported evidence of wrongdoing, the Clinton administration never publicly acknowledged any probe into the alleged money-laundering activities by Raul or Carlos Salinas or their political allies and business associates in Mexico. Though the government of Switzerland also sent an official request for assistance to the Justice Department, Washington has done nothing to assist in the investigation, angering officials in Switzerland and Mexico. Swiss prosecutor Carla del Ponte privately expressed outrage at U.S. indifference, says a prominent Washington lawyer, but has made no public comment. Indeed, the only public statements came in December 1995, following an NBC News report about the Salinas scandal when the Clinton administration strenuously denied that there was any investigation of Raul or Carlos Salinas. The Democratic minority in the Senate made an exhaustive inquiry, however. Their Nov. 9, 1999, report, Private Banking and Money Laundering: A Case Study of Opportunities and Vulnerabilities, prepared by the Democratic staff of the Senate Governmental Affairs Permanent subcommittee on Investigations, details how Raul Salinas allegedly used the U.S. banking system to launder millions. Sen. Carl Levin of Michigan, the ranking Democrat on the subcommittee, has been the driving force behind congressional interest in money laundering. In January 1992, Carlos Hank Rhon, a prominent Mexican businessman and longtime client of Citibank, "telephoned his private banker, Amy Elliott, and asked her to meet with him and Raul Salinas," according to the minority-staff report. "After accepting him as a client, the private bank opened multiple accounts for Mr. Salinas and his family. i In addition, the private bank did not use Mr. Salinas' name in bank communications about his accounts, but instead referred to him as 'Confidential Client Number 2' or 'CC-2.' 'CC-1' was the code used to refer to Carlos Hank Rhon." The report discusses how Citibank allegedly acted as a willing conduit for funds moved out of Mexico by Raul Salinas, apparently on behalf of brother Carlos. "After his accounts were first opened, Mr. Salinas made an initial 1992 deposit of $2 million," the report continues. "The funds were deposited through two wire transfers from an account belonging to Mr. Hank, who told Ms. Elliott the funds had been given to him by Mr. Salinas for a business deal which did not go forward. The funds were divided between the Salinas accounts in New York and the Trocca investment accounts in London and Switzerland." |
On Feb. 28, 1995, Raul Salinas was arrested and imprisoned in Mexico on suspicion of involvement with the murder of his former brother-in-law, Jos Francisco Ruz Massieu, a leading PRI politician. The Senate report suggests that Citibank officials sought to conceal the relationship: "On the day following the arrest, a number of telephone conversations took place between Citibank private-bank personnel in New York City, London and Switzerland. The telephone conversations to London were recorded on an automatic taping system. The tape transcripts indicate that the private bank's initial reaction to the arrest was not to assist law enforcement, but to determine whether the Salinas accounts should be moved to Switzerland to make discovery of the assets and bank records more difficult."
The report further states that Citibank never verified Raul Salinas' business background or source of wealth. It says that on Nov. 17, 1995, Citibank filed a Criminal Referral Form on Raul Salinas with U.S. law-enforcement officials. According to the report, the form mentioned Salinas' accounts in New York, which held less than $200,000, but significantly not the offshore accounts in London nor the accounts in Switzerland, which held the bulk of the Salinas money. In October 1998, a Swiss federal court ordered civil forfeiture of $114 million frozen in the Salinas accounts as illegal proceeds related to narcotics trafficking. The forfeiture order purported to be based upon a report by the Swiss attorney general, summarizing a three-year investigation which concluded that Raul Salinas received substantial funds from narcotics traffickers. In July 1999, the highest Swiss court invalidated the seizure order on procedural grounds but ordered that the funds remain frozen while Swiss authorities considered further proceedings. In January 1999, after a lengthy trial, a Mexico City court convicted Raul Salinas of murder. Two years earlier, in July 1997, another Mexican court had dismissed money-laundering charges against him on the grounds that no prior court ruling had determined the $21 million in dispute had been illegally obtained. Raul Salinas now is on trial in Mexico City for "illegal enrichment" and is serving a 27-year murder sentence. Yet neither Raul nor Carlos Salinas nor any of their Mexican business associates have been called to the bar of justice in the United States for violation of federal money-laundering laws. During the last eight years, Insight has learned, the Clinton administration lent no assistance to the Swiss investigation of Raul Salinas and has made no moves against other Mexican officials with documented ties to the Salinas brothers. Even after that formal request by the Swiss government, the Clinton administration continued to ignore the Salinas matter. At the same time, despite the evidence uncovered and reported by the Senate panel, no indictments were brought against Citibank or its employees. A little-noticed legal battle between Carlos Hank Rhon and the U.S. Federal Reserve Board may provide a partial explanation. According to public documents available in the matter before federal Administrative Law Judge Arthur L. Shipe, on Oct. 4, 1996, Citibank called the Fed and requested a meeting. On or about Oct. 9, 1996, officials of Citibank's Private Banking Department, including counsel John Roche, met with the Fed's legal staff to discuss "possible violations of banking laws and misrepresentations to the board that had come to the attention of Citibank's attorneys i violations that Citibank believed should be brought to the board's attention." A news account apparently based on the same facts covered in the Oct. 9, 1996, meeting between Citibank and the board's staff appeared in the Wall Street Journal on Nov. 1, 1996. Documents in the Fed's proceedings indicate that the same Citibank private bankers who handled Raul Salinas also represented members of the Hank family and arranged various financial transactions on behalf of the Hanks or entities they controlled. The records contain extensive information about Hank-family financial transactions - information financial specialists say would be virtually impossible to obtain without access to confidential bank records. An October 1998 report by the General Accounting Office (GAO) observes: "We asked the Federal Reserve to comment on whether Mr. Salinas' private banking relationship with Citibank New York and Citibank's movement of Mr. Salinas' funds had complied with then-applicable laws and regulations. According to Federal Reserve representatives, the facts of the Salinas/ Citibank matter, as known to the Federal Reserve when we inquired, did not provide sufficient information for it to make a determination about whether any law or regulation had been violated. However, the Federal Reserve is continuing to monitor the Department of Justice's investigation." Did Citibank give the Federal Reserve confidential information about their clients in the Hank family in return for a de facto "pardon" from the Clinton administration? Citibank officials refuse to comment. However, since that October 1996 meeting between Citibank and the Fed there has been no public mention of investigations by Justice or any other federal agency regarding the active role played by Citibank in the alleged money laundering by Raul Salinas. Indeed, say insiders, were it not for the initiative taken by prosecutors in Switzerland and Mexico and the efforts of Sen. Levin, the entire episode surrounding the Salinas family and Citibank might have been happily forgotten by Washington. But questions persist. The Laredo Morning Times of Texas reported June 13, 1999, that representatives of Carlos Hank Rhon prevailed upon the Zedillo government to send a diplomatic note of protest to U.S. authorities. The note concerned the alleged leak of a secret U.S. government drug-investigation report, "Operation White Tiger," which first was reported by Insight "Family Affairs," March 29, 1999 . Insight reported that "U.S. lawmen say billionaire power broker Carlos Hank Gonzalez and sons protect narcotraffickers" and detailed allegations that the Salinas family looted public agencies in Mexico to build their $240 million offshore hoard. GOP former senator Warren Rudman of New Hampshire, who represents Carlos Hank Rhon, said in a Feb. 3, 2000, letter to then-attorney general Reno that the allegations are "false and defamatory." Rudman states that the intention of the leak was "to defame the Hank family," but DEA officials tell Insight that the result of the leak has been to halt the inquiry into the Hank family's activities. Conservatives are encouraged by President Bush's commitment to restore honor and integrity to Washington after eight years of Clinton and Reno. Bush has promised to help Fox in his campaign to save his country from the narcopolitica. But there is concern in Washington that any U.S. legal moves against the Salinas family or their political supporters in Mexico could create considerable public-relations problems for the White House. Ties between the Bush family and Mexico run deep, far beyond the public relationship between President Bush and Carlos Salinas during the fight for the North American Free Trade Agreement a decade ago. "George Bush senior began his family's relationship with Mexico in the 1960s, when his Zapata Offshore Oil Company was a partner in a border-region oil company called Perforaciones Marinas del Golfo (Permargo), with Jorg Diaz Serrano," reports Julie Reynolds, editor of El Andar magazine. "In 1988, the financial newspaper Barron's reported that the two Jorgs - Bush and Diaz Serrano - used prestanombres name-lenders to hide Bush's investment in Permargo from the Mexican government, skirting Mexican foreign-ownership laws. Barron's also accused the Securities and Exchange Commission of destroying related documents after Bush became vice president in 1981." The use of cutouts to hide U.S. ownership in Mexican business resulted from revolutionary populism in Mexico and was neither unusual nor, in many cases, illegal.
There is no indication the Bushes were aware of any of this. But by 1996, as he began his race for the presidency, Fox told the daily El Norte that he knew of Mexican Cabinet officials involved in narcotics: "Everyone knows that there are people involved with drugs at the highest levels of power," said Fox. Now he is in a position to do something about it, and he and President Bush have promised each other to do so. That may even be possible. A Mexican court decision earlier this year allows extradition of Mexican suspects involved in drug trafficking and related financial crimes. This decision allows Washington to provide real help to Fox. It also puts Fox and his senior aides in mortal danger. One member of Fox's Cabinet told Insight in January: "All of our phones, faxes and e-mails are monitored by the narcos. We are surrounded by enemies. We cannot attack the corruption unless Washington ends its indifference to wrongdoing by the Mexican elite." Christopher Whalen is a New York-based investment banker and the Latin America editor of The International Economy magazine. Photos (A,B,D, color), A) I need help: Fox is looking to the Bush administration for U.S. prosecution of foreign officials involved in drugs.; B&C) Crime family: Carlos Salinas, top, looted Mexican agencies while president. Raul Salinas, left, is serving a long sentence for the murder of a politician.; D) On the case: Sen. Levin was the catalyst for the investigation into money laundering by Raul Salinas., A) By Jeff Mitchell/Reuters; B (Top Photo): By Andrew Winning/AFP; C (Left Photo): By AFP; D) By Luke Frazza/AFP |