Breaking:Citi-Group About To Release Enron Like Problem

FOX,CNBC | 7-22-02 | my favorite headache

[liberallarry]

I assumed you were familiar with the details of the case.

The deal looked bad from the beginning. That's why the SEC investigated. They found that Bush knew that soon to be revealed losses would be in the 4 to 9 million dollar range - something like 2 to 5 times what it had been in the same quarter a year prior. He knew this because he was on a special audit committee, and also received a relevant flash report. The executive committee - of which Bush was not a member - knew the losses would be about 23 million dollars.

At the time Harken had severe problems: it was short of cash and its lenders were questioning its viability. It had only one asset of value: the Bahrain oil lease. But the market knew about that asset for months prior to the Bush sale, yet it steadily declined until it was at 1 dollar at the end of 1990. Subsequently it went up to - 8 is the usually quoted figure - but 6 and something would be more accurate. Why didn't it show a substantial decline when the 23 million dollar loss was announced? Well, it did - dropping from 3 to 2 3/8 but it immediately recovered. Why? No one is sure. Harken is thinly traded. Perhaps a single substantial buyer had a different view than others of its worth. Or perhaps someone bailed out Mr. Bush - not the first time he was helped by his friends.

[My Favorite Headache]

Even if there are courtside seats for a playoff game? LOL...stock brokers will tell you anything for the sale these days....now let's put some lipstick on this pig and sell this thing....hahaha

[jumpstartme]

Good job, but you guys are just scratching the surface. The criminal enterprise that was Clinton/Rubin goes much deeper. It goes to money laundering and drugs. That's what it was always all about. Citigroup hired Rubin for a reason. See the following article and note: if nothing REAL happened to Citigroup as a result of the below Senate inquiry, sadly, nothing will happen to them now. They pay too much protection money. If you want to do a real investigation, look into Citigroup and money laundering...

Citigroup Targeted by New Money-Laundering Rules on Shell Banks

Posted by : Bloomberg; October 26, 2001
on : lundi 29 octobre 2001 à 08:59

Citigroup Inc.'s practice of maintaining relationships with offshore shell banks in the Bahamas, the Cayman Islands and elsewhere will have to end under the anti-money-laundering law enacted by Congress yesterday.

The law prohibits U.S. banks from opening correspondent accounts for banks with no offices and no parent bank overseen by a bank regulator. Citigroup, the world's largest financial services company, has said it permits business with a shell bank if its parent is a financial institution, not necessarily a bank.

Of the 10 largest U.S. banks, eight do not allow correspondent relationships with offshore shell banks. One, FleetBoston Financial Corp., did not return phone calls.

``If you have a `bank' that has no physical presence anywhere in the world, it shouldn't be able to establish a correspondent account in an American bank,'' Sen. Paul Sarbanes, chairman of the Senate Banking Committee, said in an interview. ``We think the shell bank is just a vehicle made for abuse.''

There are no reliable figures for money held by shell banks. Offshore banks, including shell banks, are licensed in 60 jurisdictions and hold an estimated $5 trillion worldwide.

When U.S. Justice Department investigators sent $7.7 million through an offshore shell bank's Citigroup account as part of a 1998 money-laundering probe, they found a total of $1.8 billion had passed through the account over six years.

Senate Inquiry

Banks ``should not open an account with an offshore shell bank unless there is a parent bank involved,'' said John Shockey, a retired special assistant with the Comptroller of the Currency, where he investigated about 500 offshore shell banks. ``I have never known an offshore shell bank owned and operated by individuals to ever engage in legitimate commercial banking.''

An inquiry completed this year by the staff of the Senate Permanent Subcommittee on Investigations found illegal funds were funneled from shell banks through correspondent accounts of banks such as Citigroup, Bank of America Corp. and First Union Corp., now known as Wachovia. All the banks denied wrongdoing.

In response to a question about the company's policy on offshore shell banks, Citibank spokeswoman Christina Pretto referred to testimony by Carlos Fedrigotti, president of Citibank Argentina, from a congressional hearing in March.

``Citibank has strived to limit its target market to the most reputable and financially robust institutions,'' Fedrigotti said. ``For this reason, Citibank avoids doing business with offshore banks that are not affiliated with well-established onshore parent financial institutions.''

Banks' Policies

Of the top 10 U.S. banks by assets Bank of America, the second-largest U.S. bank by assets, said its policy is to decline accounts for offshore shell banks.

Wachovia spokeswoman Mary Eshet said the bank will open a correspondent account for an offshore shell bank only ``if the parent is a reputable bank.''

Fleet Boston did not provide information; the other six banks said they either had a policy of not opening accounts for offshore shell banks or that they would do so only if it was the subsidiary of an onshore bank.

The impetus for the legislation came from the Sept. 11 terror attacks on New York and Washington. It gives authorities new tools to track and freeze suspect funds. Banks also will have to obtain more detailed information about their clients, and more closely scrutinize domestic and international transactions.

Terror Attacks

``Money laundering is used to hide the assets that terrorist groups use to fund their operations in the same way that drug lords and organized crime organizations launder their money to give it a patina of legitimacy,'' said Stuart Eizenstat, undersecretary of the Treasury in the Clinton administration and lead coordinator for money-laundering efforts.

In a case investigated by Treasury, the Justice Department and the Customs Service, two units of an Argentine brokerage, including an offshore shell bank with a correspondent account at Citigroup, were used to transfer at least $11.75 million in cash from U.S. drug-enforcement agents investigating Mexico's Juarez drug cartel. In six years, $1.8 billion moved through that account, the investigation found.

The parent brokerage was regulated only by Argentine securities regulators, not banking inspectors.

Citigroup executives have said in congressional testimony that the bank has opened accounts for offshore shell banks only in cases where it already does business with a regulated parent company, such as a brokerage.

``The problem is, you don't regulate a brokerage like you regulate a bank,'' said Shockey. ``The risks are different.''

The legislation also requires banks to report on the source of funds in private bank accounts opened by non-U.S. citizens, and gives the Treasury Secretary the authority to declare a bank, jurisdiction or country a ``primary money laundering concern,'' requiring U.S. banks to gather more information about their overseas partners.

[kcvl]

May 22, 2002

THE COUNTRY'S LARGEST FINANCIAL INSTITUTION IS BUYING THE NATION'S SECOND-LARGEST SAVINGS BANK. CITIGROUP HAS AGREED TO PURCHASE CALIFORNIA'S GOLDEN STATE BANCORP FOR FIVE-POINT-EIGHT BILLION DOLLARS. THE DEAL WILL GREATLY INCREASE CITIGROUP'S PRESENCE ON THE WEST COAST

[kcvl]

June 1, 2002

07:27 ET Citigroup subpoenaed by SEC as part of Dynegy probe -- WSJ (C) 43.34: WSJ reports that the SEC has subpoenaed Citigroup for information about the "Project Alpha" transaction it helped arrange for Dynegy. Separately, WSJ reports that Jack Grubman, an analyst at Citigroup's Salomon Smith Barney unit, was instrumental in making key decisions at Global Crossing for two yrs after it went public.

[kcvl]

Citigroup -- Citigroup agreed Tuesday to buy the parent company of San Francisco's Cal Fed Bank for about $5.8 billion in cash and stock, a deal that would give the New York financial colossus the fourth-largest banking system in California.

Christian Berthelsen, Sam Zuckerman in the San Francisco Chronicle Loretta Kalb in the Sacramento Bee Dean Calbreath in the San Diego Union Paul Beckett in the Wall Street Journal Marc Albert in the Oakland Tribune -- 5/22/02

[jumpstartme]

Google results for Citigroup, money laundering.

[jumpstartme]

Google results for Citigroup, drugs.

[wingnuts'nbolts]

Thank you for the information. This transaction has been examined at length and evidently no malfeasance was found. Is this going to go on and on until some committee somewhere says they've found the smoking gun, like the 2000 election?

Investigation by the SEC won't do it? Maybe Congress will be able to nail it down to what Bush knew and when he knew it and who bailed the company out. If there was no illegality to the transaction what is the point, except the smearing of President Bush?

[liberallarry]

A big part of it is politics, of course. Nobody ever said it was a nice game - and it isn't. If Bush wasn't President and this wasn't a time of corporate scandals and a tremendous bear market, nobody would give a damn. But he is and it is so it will continue as long as it's politically useful.

Right now the paper trail is dead. But much is unknown and quite a bit is hidden. Anything could surface. My feeling - and I've stated it several times on this forum - is that the public does not blame Bush for the bear market and will not blame him for questionable deals long past IF he vigorously goes after and punishes the worst of today's corporate crooks. If he doesn't they will blame him both for sheltering the crooks and for possibly being one himself - and he'll deserve it. I'd like his presidency to succeed because it's very bad for the country if it doesn't. But I'm afraid the last thing Mr. Bush wants to do is what I've suggested.

[jumpstartme]

In view of today's announcement by Justice that an Independent Investigator will look into Worldcom, I find it highly unlikely that Bush [via his Justice Dept] will throw any wrongdoer in jail between now and the November elections.

There is only one reason any of this is political. It's not the bear market. It's not old, dead, questionable "scandals" already investigated by the SEC, it's not anything else but a power grab by democrats. They simply want the headlines non-stop between now and November.

Now they want an Independent Counsel to look into Bush/Harken. Well, if we give that to them, then kiss the elections goodbye, along with any majorities in the house or senate. That, will be a political circus. Recall what they did to Newt?

[liberallarry]

Now they want an Independent Counsel to look into Bush/Harken. Well, if we give that to them, then kiss the elections goodbye

My opinion is that if Bush were to appoint Rudolf Guilani as Independent Counsel to look into all the current book-cooking and cheating, and prosecute vigorously as justified, Harken would be completely forgotten, the Republicans would be home free, and the market would do its job of cleaning out the dead wood and getting back to growth in record time. Guiliani has the stature and expertise of Rumsfeld. No one else does.

[jumpstartme]

You may be right, but if it were me I'd stand by my choice. And, so far the president's done the right thing [IMHO] by doing just that through this witch hunt by hypocrite democrats.

[Faith65]

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