Thursday, February 4, 2010

U.S. Banks Abetting Corrupt Regimes: Money Laundering Corrupt Politico Style

The global bank HSBC may be running offshore accounts for central banks, reports Lucy Komisar.

The central banks through shell companies wash funds through HSBC and then use the funds for a variety of purposes, often personal in nature.

According to a Senate Subcommittee on Investigations report to be released today and obtained by Komisar, from 2004 to 2008, Teodoro Nguema Obiang Mangue, son of the president of Equatorial Guinea, employed two lawyers, Michael Berger and George Nagler, to set up U.S. shell companies – Beautiful Vision Inc., Unlimited Horizon, Inc., Sweetwater Malibu LLC, Sweetwater Management Inc., and Sweet Pink Inc. – with no employees or places of business, to open bank accounts and move money.

The lawyers used their attorney client and law office accounts to hide the origin of the money and transfer it to an account in Citibank, which would never see a wire transfer from Equatorial Guinea. At this time Obiang was the subject of criminal investigations and complaints in the U.S. and France.

The lawyers moved nearly 30 million dollars in wire transfers to buy a 30-million-dollar residence in Malibu, on the California coast. An escrow agent, the Sidley Austin law firm, sent 900,000 dollars to help purchase the Malibu mansion.

When the law firm inquired of the Justice Department if it was okay to accept the funds, part of a 21-million-dollar transfer that initially was to buy a Gulfstream jet, the department replied it had no basis for seizing the funds, the report said.

Money moved from Obiang’s bank in Equatorial Guinea to a correspondent account at Wachovia Bank which then transferred the funds to Bank of America in Oklahoma City. In a six-month period, about 73 million dollars went through the Wachovia account. Another 37 million dollars went through Citibank.

Also according to Komisar:

In a Nigeria case, the report described how Jennifer Douglas, the fourth wife of Atiku Abubakar, who was vice-president of that country, helped him bring 40 million dollars in suspect funds into the U.S. Some of it was bribe payments made by Siemens, the German electronics company that paid some two billion dollars in global bribes.

Edward Weidenfeld, Douglas’s lawyer, received funds from offshore accounts and told the committee that he assumed that it was Abubakar’s money. Under the law, he was not required to inquire further.

The late president of Gabon, Omar Bongo, hired a U.S. lobbyist, Jeffrey Birrell, to arrange to buy an armoured car from a Utah company and to purchase a U.S.-made C130 transport aircraft from Saudi Arabia.

He got U.S. permission for the aircraft deal – required because U.S. military sales require permission for resales – and had no trouble moving money from shell companies for the deal. Along the way Birrell was sending out wire transfers directed by Bongo and his advisors, some to accounts in Brussels, Paris and Malta.
Bottom line: If you have the money, you can find ways to move the money.

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