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Posted by Dr. Manzer Durrani in Politics on June 20th, 2012
This article is written by a distinguished Pakistani journalist in our series, Zardari’s plan to destroy Pakistan. It describes how Zardari is devoting his crafty machinations to control governing power in Pakistan. He cares about nothing, even it leads to a destruction of national institutions like the Judiciary. But, he will fail miserably and his end will be worse than that of the poor American soldiers caught by Somalian rampaging mobs. He will not even get two yards of earth to intern his carcass in Pakistan. He is committing crimes against humanity, by taking back Pakistan to a near Stone Age Era. But, Pakistanis need not despair, There is a Zardari Plan for Pakistan and there is Allah’s Plan for Pakistan. Allah Plan Works. Zardari is a paid agent of a America as his protege Hussain Haqqani revealed. Haqqani was staying with Zardari in the Presidenc. He was likely following the blue print his American masters have given him. Why, you may say is Zardari following this path? As we have recently shown, Zardari has no interest in Pakistan, except for areas around his properties in Nawabshah and Naudero. Zardari is also the biggest enemy of Sindh. He was touring all around the globe, when Sindh was under with floodwater. So far, he has done nothing for flood stricken people and never even bothered to visit interior Sindh. All he cares about is his own interests and that of his prodigal son, Bilawal.
Bhutto family is a black cloud of curse on Pakistan. Since the time Z.A.Bhutto appeared on the scene, Pakistan has been sliding down a slippery slope of social turmoil, and national disintegration, which has included fall of East Pakistan. Z.A. Bhutto, first destroyed the tranquility of the educational institutions of Pakistan, by politicizing the students. From the hellish womb of Bhutto ideology, demonic organization took off. MQM, a separatist anti-Islamic, anti-Pakistan organization was born among Karachites. This came as a reaction to Bhuttos’, Sindhi and Non-Sindhi policies in Education, Economics, Social, and Developmental Programs. A satanic fat buffoon, named Altaf Hussain became Supremo of Karachi Killers Inc., or MQM (Maroo-Qatiloo-Maroo), it played the very clever Mohajir Card against the PPP-Sindi Nationalism based Stealth Separatist Policies.
In Punjab, another buffoon in the shape of Nawaz Sharif has received credibility, due to the untiring efforts of his American friends. The Shariff brothers have protected American interests in Pakistan from the time of Abbajee. They are under the delusion that they are the Kennedys of Pakistan. Their roots lie in the “lohar,” bhattas of Brandereth Road, Lahore.
Pakistani politicians are like whores, who spend the night with the “John;” who pays the highest price. In KPH, Asfandyar Wali and his touts run another brothel, where, Pakistan’s interests are bartered and sold. In Balochistan, a drunk and druggy, feudal, sardar, Aslam Raisani holds the fort. Most of the time, he is playing to the media audience as a bungling comic.
The Paindoo/Jagirdar mafia has a strangle hold on Pakistan for the last 60 years. The only light at the end of the long dark tunnel of poor governments is Imran Khan. Most Pakistanis are counting on deliverance from corruption and have hedged their bets on him. Imran Khan has very little time to stand and deliver. The country is ready to implode. The only other sign of a cleansed Pakistan, is its Judiciary, under the leadership of the Honorable Chief Justice Iftikhar Chaudhry. He is like rock protecting a drowning “Basti of Pakistan,” from the violent tidal waves of corruption and misgovernance. However, every Pakistani “showdah and lafanga,” like Malik Riaz is out to topple him. The octopus of corruption is crawling out of the cesspool known as the Presidens’ House in Islamabad. Even though it has lost two of its tentacles, namely, Narco Gilani and his cohort Malik Riaz. Zardari’s stable of crooks has lot of depth; as one crook leaves, another one replace him. Another criminal by the name of Shahabuddin, has been born out of Zardaris’ political womb, as Pakistanis are sent flying, from the frying pan, into the fire
Epicentre
The writer is editor The News, Islamabad.
“We’ll get your chief justice by July, max,” he leaned over and whispered in my ear. We were both at a conference, waiting to take our places on the stage. He was one of the speakers on a panel of which I was the moderator. The time between panels presented the opportunity to share important information.
The original plan, he told me, was to “hit the chief justice while he was abroad” receiving an award in London; but the Malik Riaz disclosures were delayed on the ill-advise of a silver-haired top legal aide of the government — a newly re-discovered party asset, to borrow someone’s words. The top lawyer, according to my fellow speaker at the conference, had advised the unleashing of the corruption-charges avalanche when the CJ got back in the country.
“Why?” I asked. A resigned shrug of shoulders and rolling of the eyes was the only response I got. So what happens now was my next question. “We will make his continuity simply unviable for the continuity of the institution itself,” he said with a knowing smile. But why did Malik Riaz suddenly start talking to so many senior journalists in what appeared to be an obvious and desperate bid for the Arsalan affair to become shoptalk? He turned, looked me straight in the eye and said, “You wanted us to wait till the court had read the last rites of the PM in the conviction case? Something bigger had to occur before that”.”
And then we were both called to the stage. This happened mid-week.
The contours of the get-CJ-by-July strategy became evident the day after, within hours of my stage-side discourse, and right in the well of courtroom 1. In what was clearly a preplanned move, Attorney General Irfan Qadir stood up at one point and addressed the bench, led by Chief Justice Iftikhar, in an extremely rude and provocative manner. He brashly accused the court of rushing through the case and dismissively asked the CJ to recuse himself from hearing the prime minister’s conviction case review. And then, insisting that the seven-member bench that delivered the guilty verdict against the prime minister had immediately “fled the courtroom,” he shocked the packed courtroom by gesticulating in a manner known to every street urchin of Pakistan.
Understandably, the AG has his personal bias against the CJ who cost him his illegal continuation in the office of Chief Prosecutor NAB, but Qadir’s behavior was still shameful. However, there was a clear method to the AG’s madness. The plan was simple: force the bench to react and respond in the same coin — a reaction that would have been presented as more evidence, a footnote perhaps, of “conduct unbecoming of a judge” in some future presidential reference.
But the bench saw through the scheme and responded with utmost restraint with only Justice Khwaja ‘advising’ the AG to conduct himself properly. For how long such restraint will last, is the real question.
I am fond of my ‘whispering’ friend on a personal level and though his politics may be problematic, his access to the epicenter of political maneuvering and intrigue in the capital is certain. He knows what he was talking about and isn’t someone whose utterances can be ignored as typical Islamabad conspiracy-theorising. Another gentleman also in the know of things had another interesting take to share on the Arsalan Iftikhar saga. According to him, the entire issue would have been ‘outed’ even if Arsalan had supposedly “delivered” on his commitment and Bahria Town had been blessed with favourable court verdicts. In such an eventuality, the favourable verdicts would have been presented as being irrefutable evidence of a criminal collusion between an erring son and his collaborating father. Unfortunately, for the CJ-slayers, no ‘incriminating’ favourable verdicts were handed down to be exploited as proof of a successfully-concluded criminal arrangement.
The first setback came when instead of cowering into a corner or submitting to the will of Malik Riaz & Co, the CJ took the bull by the horns and brought his own son and his accuser in the dock. The second blow was struck by the two-member bench on Thursday when it referred the case to the government for thorough probe and action against Arsalan, Malik Riaz and Ahmed Khalil. The ball to investigate and convict is now in the government’s court. Surely that was not a part of any Plan A, B or C.
The fundamental question at the heart of the Malik Riaz explosion remains unanswered to date: why would a super rich businessman, a multi billionaire in dollar terms, put his entire empire and his own future at risk for a paltry Rs340 million? Especially when only recently the same man doled away Rs 140million to secure the release of a Pakistani sailor from Somali sea pirates? He claims to have donated Rs850million to subsidise Shahbaz Sharif’s Ashiana housing scheme for the ‘under privileged.’ In his high roller power games, giving away hundreds of millions of rupees to politicians, generals, bureaucrats and dirty journalists is business as usual for him. So why the fuss over a measly Rs340m? He is man who has made his billions by buying the powerful and bullying the weak and has never alienated centres of power and influence. Looking at his past, his latest behavior just doesn’t add up unless one configures the picture to the much larger than that painted by the self-proclaimed victim, Malik Riaz.
The script may have been read by Mailk Riaz but he is definitely not the sole author. He has to be part of a bigger conspiracy and must have been given impregnable guarantees that no harm would come to his person, or personal fortunes for throwing himself in front of the judicial juggernaut. This raises another question: What do you offer a man who already has everything?
How about public office? For a man of Malik Riaz’s humble beginnings, and who has controlled the political scene from behind the curtain for over a decade, what could be more desirable than to be occupying the very high offices that he has so diligently ‘served’ — and serviced? It’s a fact that he had been assured the governorship of Punjab, both by Zaradri and Nawaz, in recognition of his mediatory services during their 2008 parlays. Indeed, Malik sahib often makes references to late governor, Nawab of Kalabagh, and never hides his desire to ‘walk in Nawab sahib’s footsteps.’
Unfortunately, Nawaz and Zardari fell apart and so did Malik’s dreams of being Punjab’s Laat Sahib. Second best alternative: interim prime minister? Fantastical as it may sound, you can never blame someone for being overtly ambitious. Clearly the gentleman has big plans for the future and the controversial mode of his entry notwithstanding, he seems to be moving from being a king maker to a king of sorts himself. And what better beginning than slaying a giant like CJ Iftikhar Chaudhry?
For all practical purpose, public office may forever remain a pipe dream for an individual who had the audacity to justify, in a televised interview, that he offered bribes and illegal gratifications to conduct routine business in Pakistan. That he has been intelligently used is now quite obvious and it’s only a matter of time before the real players get exposed.
There is always a time to cut losses and quit and the sooner the executive and the intelligence combine realize this the better. About 60 judges of the superior court quit when Gen Musharraf sacked Justice Iftikhar. In the event of an attempted repeat of the same stupidity, the government will not be able to find a single sitting judge in any of the high courts and the supreme court to abandon the CJ and cross over the dirty line. Lets face it, the crude attempt to malign the CJ is already showing signs of failure, and showing itself detrimental to the powers that be.
Email: [email protected]
Posted by Dr. Manzer Durrani in Corruption on June 19th, 2012
Looking for the lost money that belonged to the Pakistani people…
The money is gone: Pakistani people own the loans & Citibank knew where it was:
Saturday August 8, 2009
GEO TV: For the first time in YEARS, on Pakistan mainstream TV network, Dr. Shahid Masood in his “Mere Mutabiq” program reveals the facts that money from Pakistans treasury was taken by Asif Ali Zardari, the CURRENT President of Pakistan, and laundered through the Cayman Islands, finally winding up at Citibank Switzerland. Also named in the charges is former Prime Minister Shaukat Aziz (who now lives in London).
Dr. Shahid Masood reports, “As the Pakistani Army and people fight terrorists in the country, we have financial terrorists attacking in Pakistan, and present a much greater threat to the country.” (Translation).
Oil companies who have recently collected 7 billion rupees in carbon taxes (ordered by Zardari), have yet to pay a single rupee in taxes to the Pakistan treasury.
Nothing yet in print media; but here are two articles from Pakistani online news back in 2007.
Ref
Shaukat Aziz and Citibank’s Laundering of Asif Zardari’s Money
Posted: Nov 22, 2007 Thu 12:00 am
How Citibank Laundered Asif Zardari’s Money, provides a case history excerpted from a US Congress Subcommittee’s investigation of moneylaundering by private banking groups within US banks during the 1990s. The present post reproduces an interesting document, “List of meetings between Mr. Zardari and Citibank personnel, provided by Citibank,” being document “h” of a list of “Documents relating to Asif Ali Zardari” appended to the Report.
As part of its investigation, the subcommittee asked Citibank to provide a written record of meetings held between Citibank officials and four high profile Citibank account holders, including Mr. Asif Ali Zardari. Unlike the other cases, in which the names of relatively low level Citibank private banking group staff emerges in the records provided, the names of Citibank staff involved in the case of Benazir Bhutto and Asif Ali Zardari consists of men who have gone on to play a prominent role in Pakistan:
Shaukat Aziz, Until recently Prime Minister of Pakistan (close ties to CIA
Shaukat Tarin, Chairman, Board of Directors, Karachi Stock Exchange
Sajjad Rizvi
Nadeem Hussain, CEO, Tameer Bank & President, Tameer Foundation
The statement provided by Citibank lists date, participants, location, and summary of contacts between Citibank staff and the Bhuttos. This statement is reproduced below, interspersed with important events in the more detailed Asif Zardari case summary [see here] provided in the House Sub-Committee Report, inserted chronologically:
Senate Permanent Subcommittee on Investigations
Exhibit # 31h.
Meetings, Events, or Functions at which Benazir Bhutto, Asif Ali Zardari, or Both Were Present
Date: Late January/Early February 1994
Participants: William Rhodes, Shaukat Aziz, Benazir Bhutto, Asif Ali Zardari, and others
Location: Davos, Switzerland
Summary: William Rhodes and Shaukat Aziz attend Davos economic conference. During conference, they are guests at a dinner hosted by Benazir Bhutto and attended by approximately 150 others.
Date: February 1994
Participants: John Reed, Paul Collins, Shaukat Tarin, Benazir Bhutto, and Asif Ali Zardari
Location: Islamabad
Summary: Discussion of Pakistani and world affairs
NOTES on the Citibanksters:
William Rhodes: William R. “Bill” Rhodes Rhodes is the Senior Vice Chairman of Citigroup Inc. and the Chairman of Citigroup and Citibank. He is also Chairman of the Board of both the Americas Society and its affiliate, the Council of the Americas, which were originally founded by David Rockefeller in 1965, and is a board member of the Group of Thirty.
Rhodes was educated at Northfield Mount Hermon, a college preparatory school, and Brown University; he joined Citibank in 1957. As the Senior International Officer for Citigroup, Mr. Rhodes has specific responsibilities for client relationships in emerging markets worldwide, relationships with governments and other official institutions and appointments of Citibank’s senior country officers outside the U.S.
John Shepard Reed [/b] (born 1939) is the former Chairman of the New York Stock Exchange. He previously served as Chairman and CEO of Citicorp, Citibank, and post-merger, Citigroup.was asked to be interim CEO of the New York Stock Exchange after the Richard Grasso over-compensation scandal. He accepted the job for a $1 salary and set up new governance rules as the NYSE became a public corporation. Reed is on the board of directors at Altria Group.
Paul J. Collins became a director of the [Enstar Group Ltd.] on January 31, 2007 in connection with the completion of the Merger. Mr. Collins served as a director of The Enstar Group, Inc. from May 2004 through the Merger. Mr. Collins retired as a Vice Chairman and member of the Management Committee of Citigroup Inc. in September 2000. From 1985 to 2000, Mr. Collins served as a director of Citicorp and its principal subsidiary, Citibank; from 1988 to 1998, he also served as Vice Chairman of those entities. Mr. Collins currently serves as chairman of the University of Wisconsin Foundation and a trustee of the Glyndebourne Arts Trust. He is also a member of the Advisory Board of Welsh, Carson, Anderson & Stowe, a private equity firm. He was previously a director of Kimberly Clark Corporation, Nokia Corporation and BG Group and a member of the supervisory board of Actis Capital LLP.
Date: August 1994
Participants: Sajjad Rizvi, Paul Collins, Shaukat Tarin, Benazir Bhutto, and others
Location: Prime Minister’s Residence, Islamabad
Summary: General courtesy call, discussion of Citibank, macroeconomics and socio-political issues.
[Oct 1994 Mr. Zardari’s relationship with Citibank begins, with an account opened for Capricorn Trading, S.A. a British Virgin Island company, reportedly “through the services of Kamran Amouzegar, a private banker at Citibank private bank in Switzerland, and Jens Schlegelmilch, a Swiss lawyer who was the Bhutto family’s attorney in Europe and close personal friend for more than 20 years.”]
[5-6 Oct 1994 ARY International Exchange, a Dubai company owned by Abdul Razzak Yakub, alleged to have been given a gold import monopoly by Benazir Bhutto, deposits $5 million into the Capricorn Trading account on 5 Oct 1994; and another $5 million on 6 October 1994.]
Date: December 1994
Participants: Shaukat Aziz, Benazir Bhutto, Asif Ali Zardari, Benazir Bhutto’s economics advisor, Pkistani ambassador to Washington and others
Location: Prime Minister’s Residence, Islamabad
Summary: Discussion of Pakistani economy during a dinner meeting
[25 Feb 1994 A 3rd deposit, this time of $8 million, is made to the Capricorn trading account. Citibank says it does not know the source of this deposit.]
[27 Feb 1995 “Mr. Schlegelmilch, working with Mr. Amouzegar, opened three accounts at the Citibank Switzerland private bank. The accounts were opened in the name of M.S. Capricorn Trading, which already had an account at Citibank’s Dubai branch, aswell as Marvel and Bomer Finance, two other British Virgin Island PICs established by Mr. Schlegelmilch, according to Citibank. Each private bank account listed Mr. Schlegelmilch as the account contact and signatory. Citibank informed the Subcommittee that the Swiss Form A, a government-required beneficial owner identification form, identified Mr. Zardari as the beneficial owner of each PIC.”
[6 March 1995 $8.1 million, routed through Citibank, NY, transferred from Dubai to Swiss account.]
Date: March 7-10, 1995
Participants: Shaukat Aziz, William Rhodes, Benazir Bhutto, Asif Ali Zardari and others
Location: Singapore
Summary: During a state visit to Singapore by Benazir Bhutto, William Rhodes and Shaukat Aziz meet with Benazir Bhutto and her advisors in Benazir Bhutto’s hotel suite to discuss the Pakistani economy. At several official events
during this state visit, Shaukat Aziz exchanges greetings with Benazir Bhutto and Asif Ali Zardari
Date: March 7-10, 1995
Participants: Shaukat Aziz, William Rhodes, Benazir Bhutto, Asif Ali Zardari and others
Location: Singapore, Dinner hosted by the Pakistani Ambassador
Summary: Shaukat Aziz exchanges greetings with Benazir Bhutto and Asif Ali Zardari. Benazir Bhutto’s economic advisor asked Benazir Bhutto if she had ever visited Shaukat Aziz’s home in Singapore. She replied that she has never been invited. Shaukat Aziz stated that the Prime Minister was welcome.
Date: March 7-10, 1995
Participants: Shaukat Aziz, Shaukat Aziz’s wife, Benazir Bhutto, Asif Ali Zardari, protocol chiefs for Pakistan and Singapore, the Pakistani Ambassador, and numerous aides and security officials
Location: Shaukat Aziz’s home in Singapore
Summary: During state visit to Singapore Benazir Bhutto makes a surprise visit to Shaukat Aziz’s home. The Benazir Bhutto party remains for approximately one hour.
5 May 1995 $10.2 million, routed through Citibank, NY, transferred from Dubai to Swiss account. Shortly thereafter, Capricorn Trading’s Dubai account was closed. “Citibank has indicated that significant amounts of other funds were also deposited into the Swiss accounts. As described below, the $40 million cap was reached, and millions of additional dollars also passed through those accounts. However, Swiss bank secrecy law has prevented the Subcommittee from obtaining the details on the transactions in the Zardari accounts.”]
Date: July 1995
Participants: Shaukat Aziz, Benazir Bhutto, Asif Ali Zardari and others
Location: Kuala Lumpur, Malaysia
Summary: Shaukat Aziz exchanges greetings with Asif Ali Zardari and Benazir Bhutto at a lunch given by Malaysian foreign minister in connection with benazir Bhutto’s state visit to Malaysia. Shaukat Aziz may also have exchanged greetings with Benazir Bhutto and Asif Ali Zardari at other events during the visit.
Date: Sometime during Benazir Bhutto’s second term as Prime Minister
Participants: Shaukat Aziz, Shaukat Tarin, Asif Ali Zardari and others
Location: Prime Minister’s Residence, Islamabad
Summary: Shaukat Aziz, Shaukat Tarin meet, perhaps on two different occasions, with Asif Ali Zardari and his aides for informal discussions about the Pakistani economy.
Date: September or October 1995
Participants: Sajjad Rizvi, Paul Collins, Shaukat Tarin, Benazir Bhutto and others
Location: Prime Minister’s Residence, Islamabad
Summary: General courtesy call, discussion of Citibank, macroeconomics and socio-political issues.
Date: December 1995
Participants: Shaukat Aziz, Paul Collins, Asif Ali Zardari and 1,500 others
Location: Karachi
Summary: Asif Ali Zardari is a guest at the wedding of Shaukat Aziz’s daughter
Date: During Benazir Bhutto’s second terms as prime minister
Participants: Shaukat Aziz and representatives of various banks
Location: Karachi
Summary: Asif Ali Zardari arrives at the end of dinner gathering of bank representatives in Karachi
Date: Late in Benazir Bhutto’s second terms as prime minister
Participants: Shaukat Aziz, Benazir Bhutto, Benazir Bhutto’s Finance Secretary and other economic advisors
Location: Prime Minister’s Residence, Islamabad
Summary: Discussion of Pakistani economy
Date: February 1996
Participants: Nadeem Hussain, Shaukat Tarin, Asif Ali Zardari and Javed Pasha
Location: Prime Minister’s Residence, Islamabad
Summary: Courtesy meeting to introduce Hussain as Citibank’s new consumer bank head in Pakistan
Date: March 1996
Participants: Sajjad Rizvi, possibly Shaukat Tarin, Margaret Thatcher, Benazir Bhutto and others
Location: Prime Minister’s Residence, Islamabad
Summary: Courtesy call with Lady Thatcher, whose speaking tour was sponsored by Citibank.
Mar/Apr 1996 “Mr. Amouzegar asked that the overall limit on the Zardari accounts be increased from $40 million to $60 million, apparently because the accounts had reached the previously imposed limit of $40 million. Citibank told the Subcommittee staff that Mr. Holderbeke considered the request, but declined to increase the $40 million limit.
June 1996 UK press reports that Mr. Zardari had purchased real estate in London. Citibank claims that an internal review was done, but Mr. Schlegelmilch allegedly indicated the funds had come from the sale of some sugar mills and were legitimate,” which Citibank accepted.
Date: August 1996
Participants: Paul Collins, Citibank Country Corporate Officer for Pakistan and Benazir Bhutto
Location: Probably Islamabad
Summary: Discussion regarding Citibank, the Pakistani economy, and regional economic and political developments.
Date: Fall 1996
Participants: Shaukat Aziz, Benazir Bhutto, Nusrat Bhutto, Sanam Bhutto, Dr. Bunyad Haider and others
Location: Waldorf Astoria, New York City
Summary: Discussion of Pakistani economy. Shaukat Aziz expressed condolences regarding the death of Benazir Bhutto’s brother. Following this meeting, Shaukat Aziz,
Benazir Bhutto and 20 others have dinner at the hotel.
[Nov 1996 Zardari arrested, for the second time, on charges of corruption.]
[Jan 1997 Citibank closed the Zardari accounts.
8 Sep 1997 Swiss government issued orders freezing the Zardari and Bhutto accounts at Citibank and three other banks in Switzerland, at the request of the Pakistani government.
5 Dec 1997 Citibank prepared a Suspicious Activity Report on the Zardari accounts and filed it with the Financial Crimes Enforcement Network at the U.S. Department of Treasury. Note: So Citibank finally ‘notices’ suspicious activity – what took them so long???
Date: 1998
Participants: Shaukat Aziz, Shaukat Aziz’s wife, Benazir Bhutto, Dr. Bunyad Haider and his wife and several other couples
Location: The Haider’s New Jersey home
Summary: Meeting among Pakistanis in the New York area and Benazir Bhutto
[END]
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Source: PRIVATE BANKING AND MONEY LAUNDERING: A CASE STUDY OF OPPORTUNITIES AND VULNERABILITIES, Hearings before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, One Hundred Sixth Congress, First Session, November 9 and 10, 1999. Pages 474-477.
http://www.gpo.gov/congress/senate/senate12sh106.html
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“They who have put out the people’s eyes, reproach them of their blindness.” — –John Milton
Re: Pakistan’s Looted Treasury: Stashed in Swiss Citibank Accounts
« Reply #1 on: August 08, 2009, 05:37:46 PM »
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How Citibank Laundered Asif Zardari’s Money
Posted: Nov 7, 2007 Wed 08:53 am
http://www.chowk.com/ilogs/64054/44106
In addition to Mr. Shaukat Aziz, current Prime Minister of Pakistan, numerous former Citibankers occupy highly influential positions in the government and the private sector in Pakistan.
Citibank is one of the largest banks, and operates one of the largest private banks in the US and globally. Of the 40 private banks reviewed by the Federal Reserve during its industry wide examination of private banking in the 1990s, only one — Citibank — was reviewed in detail by Federal Reserve examiners three years in a row. It is a private bank that has struggled with a wide range of anti-money laundering issues. Although Citibank, under Shaukat Aziz’s leadership (from May 1997 to October 1999) and his successors’ has done much to tighten controls, it was beset by numerous scandals during the 1990s.
A 1999 US Congress investigation (exact reference given at end) into Citibank, provides a fascinating inside look at how Citibank helped launder the ill-gotten gains of four high profile corrupt figures: Raul Salinas, brother of the former president of Mexico, Carlos Salinas, Asif Ali Zardari, the husband of Benazir Bhutto, former Prime Minister of Pakistan (reproduced below), El Hadj Omar Bongo, the elected president of Gabon since 1967, and Mohammed, Ibrahim, and Abba Sani Abacha, three sons of General Sani Abacha, who was the military leader of Nigeria from 1993 until his death in 1998.
Of the four case histories provided in the Report, the following is a complete excerpt of the Case History for Asif Zardari. The report also provides photocopies of signed documents, banks records, etc. (listed below, at the end).
[Beginning of Excerpt]
(2) Asif Ali Zardari Case History
The Facts
The second case history involves Asif Ali Zardari, the husband of Benazir Bhutto, former Prime Minister of Pakistan. Ms. Bhutto was elected Prime Minister in 1988, dismissed by the President of Pakistan in August 1990 for alleged corruption and inability to maintain law and order, elected Prime Minister again in October 1993, and dismissed by the President again in November 1996. At various times, Mr. Zardari served as Senator, Environment Minister and Minister for Investment in the Bhutto government. In between the two Bhutto administrations, he was incarcerated in 1990 and 1991 on charges of corruption; the charges were eventually dropped. During Ms. Bhutto’s second term there were increasing allegations of corruption in her government, and a major target of those allegations was Mr. Zardari. It has been reported that the government of Pakistan claims that Ms. Bhutto and Mr. Zardari stole over $1 billion from the country.
During the period 1994 to 1997, Citibank opened and maintained three private bank accounts in Switzerland and a consumer account in Dubai for three corporations under Mr. Zardari’s control. There are allegations that some of these accounts were used to disguise $10 million in kickbacks for a gold importing contract to Pakistan.
Structure of Private Bank Relationship. Mr. Zardari’s relationship with Citibank began in October 1994, through the services of Kamran Amouzegar, a private banker at Citibank private bank in Switzerland, and Jens Schlegelmilch, a Swiss lawyer who was the Bhutto family’s attorney in Europe and close personal friend for more than 20 years. According to Citibank, Mr. Schlegelmilch represented to Mr. Amouzegar that he was working for the Dubai royal family and he wanted to open some accounts at the Citibank branch office in Dubai. Mr. Schlegelmilch had a Dubai residency permit and a visa signed by a member of the Dubai royal family. Mr. Amouzegar agreed to introduce Mr. Schlegelmilch to a banker in the Citibank branch office in Dubai.
According to Citicorp, Mr. Schlegelmilch told the Citibank Dubai banker that he wanted to open an account in the name of M.S. Capricorn Trading, a British Virgin Island PIC. The stated purpose of the account was to receive money and transfer it to Switzerland. The account was opened in early October 1994.
According to Citibank, Mr. Schlegelmilch informed the Dubai banker that he would serve as the representative of the account and the signatory on the account. Under Dubai law, a bank is not required to know an account’s beneficial owner, only the signatory. Citibank told the Subcommittee staff that Mr. Schlegelmilch did not reveal to the Dubai banker that Mr. Zardari was the beneficial owner of the PIC [Private Investment Company: an offshore company often used to launder money], and the account manager never asked him the identity of the beneficial owner of the account. Instead, according to Citibank, she assumed the beneficial owner of the account was the member of the royal family who had signed Mr. Schlegelmilch’s visa. According to Citibank, the account manager actually performed some due diligence on the royal family member whom she believed to be the beneficial owner of the account.
Shortly after opening the account in Dubai, Mr. Schlegelmilch signed a standard referral agreement with Citibank Switzerland private bank guaranteeing him 20% of the first three years of client net revenues earned by the bank from each client he referred to the private bank.
On February 27, 1995, Mr. Schlegelmilch, working with Mr. Amouzegar, opened three accounts at the Citibank Switzerland private bank. The accounts were opened in the name of M.S. Capricorn Trading, which already had an account at Citibank’s Dubai branch, as well as Marvel and Bomer Finance, two other British Virgin Island PICs established by Mr. Schlegelmilch, according to Citibank. Each private bank account listed Mr. Schlegelmilch as the account contact and signatory. Citibank informed the Subcommittee that the Swiss Form A, a government-required beneficial owner identification form, identified Mr. Zardari as the beneficial owner of each PIC.
Lack of Due Diligence. The decision to allow Mr. Schlegelmilch to open the three accounts on behalf of Mr. Zardari, according to Citibank, involved officials at the highest levels of the private bank. The officials were: (a) Mr. Amouzegar, the private banker; (b) Deepak Sharma, then head of private bank operations in Pakistan; (c) Phillipe Holderbeke, then head of private bank operations in Switzerland (who became head of the Europe, Middle East, Africa Division in February 1996); (d) Salim Raza, then head of the EMEA Division of the private bank; and (e) Hubertus Rukavina, then head of the Citibank private bank. Mr. Rukavina told the Subcommittee staff that when he was asked about opening the Zardari accounts, he did not make the decision to open them, but rather directed that the matter be discussed with Mr. Sharma. According to Mr. Rukavina, he never heard whether the accounts were ultimately opened. Mr. Rukavina left the private bank in 1996 and left Citibank in 1999.
Citibank informed the Subcommittee staff that the private bank was aware of the allegations of corruption against Mr. Zardari at the time it opened the accounts in Switzerland. However, Citibank reasoned that if the charges for which Mr. Zardari had been incarcerated for two years had any merit, they would not have been dropped. Bank officials also believed that the family wealth of Ms. Bhutto and Mr. Zardari was large enough to support a large private bank account, even though Citibank was not able to specify what actions were taken to verify the amount and source of their wealth. Citibank said that bank officials were also aware of the M.S. Capricorn Trading account in Dubai, and they were comforted by the fact that there had been no problems with that account. According to Citibank, Mr. Amouzegar informed his superiors that Mr. Zardari was the beneficial owner of the Capricorn account in Dubai when they were considering the request to open the accounts in Switzerland. Inexplicably, however, the Dubai account manager was apparently still operating under the assumption that the beneficial owner of the Dubai Capricorn account was a member of the Dubai royal family. Subcommittee staff have been unable to determine whether Citibank officials were unaware of or inattentive to the serious inconsistency between Citibank Switzerland and Citibank Dubai with respect to the Capricorn Trading account. Citibank also informed the Subcommittee staff that bank officials had some concerns that if they turned down the accounts, their actions may have implications for the corporation’s operations in Pakistan; however, they said they never received any threats on that issue.
Citibank told the Subcommittee staff the private bank decided to allow Mr. Schlegelmilch to open the three accounts for Mr. Zardari on the condition that the private bank would not be the primary accounts for Mr. Zardari’s assets and the accounts would function as passive investment accounts. Citibank told the Subcommittee staff that Mr. Holderbeke signed a memo delineating the restrictions placed on the accounts, including a $40 million aggregate limit on the size of the three accounts, and transaction restrictions requiring the accounts to function as passive, stable investments, without multiple transactions or funding pass-throughs. None of the Citibank personnel interviewed by Subcommittee staff could identify any other private bank account with these types of restrictions. Other private banks interviewed by the Subcommittee staff were asked if they had ever accepted a client on the condition that certain restrictions be imposed on the account. The banks all said they had not. One bank representative explained that if the bank felt that it needed to place restrictions on the client’s account, it didn’t want that type of client. The existence of the restrictions are in themselves proof of the private bank’s awareness of Mr. Zardari’s poor reputation and concerns regarding the sources of his wealth.
Movement of Funds. Citibank told the Subcommittee staff that, once opened, only three deposits were made into the M.S. Capricorn Trading account in Dubai. Two deposits, totaling $10 million were made into the account almost immediately after it was opened. Citibank records show that one $5 million deposit was made on October 5,1994, and another was made on October 6, 1994. The source of both deposits was A.R.Y. International Exchange, a company owned by Abdul Razzak Yaqub [since then, the owner of several ARY television channels that, incidentally, have been providing favorable coverage of Ms. Bhutto’s recent political activities], a Pakistani gold bullion trader living in Dubai.
According to the New York Times, in December 1994, the Bhutto government awarded Mr. Razzak an exclusive gold import license. In an interview with the New York Times, Mr. Razzak acknowledged that he had used the exclusive license to import more than $500 million worth of gold into Pakistan. Mr. Razzak denies, however, making any payments to Mr. Zardari. Citibank could not explain the two $5 million payments. Ms. Bhutto told the Subcommittee staff that since A.R.Y. International Exchange is a foreign exchange business, the payments did not necessarily come from Mr. Razzak, but could have come from a third party who was merely making use of A.R.Y.’s exchange services. The staff invited Ms. Bhutto to provide additional information on the M.S. Capricorn Trading accounts, but she has not yet done so.
On February 25, 1995, a third deposit of $8 million was made into the Dubai M.S. Capricorn Trading account. Records show that the payment was made through American Express, with the originator of the account listed as “Morgan NYC.” Citibank indicated it does not know who Morgan NYC is, nor does it know the source of the $8 million.
All of the funds in the Dubai account of M.S. Capricorn Trading were moved to the Swiss accounts in the Spring of 1995. On March 6, 1995, $8.1 million was transferred; and on May 5, 1995, another $10.2 million was transferred. Both transfers involved U.S. dollars and were routed through Citibank’s New York offices. Citibank informed the Subcommittee staff that M.S. Capricorn Trading closed its Dubai account shortly after the last transfer was completed.
Citibank has indicated that significant amounts of other funds were also deposited into the Swiss accounts. As described below, the $40 million cap was reached, and millions of additional dollars also passed through those accounts. However, Swiss bank secrecy law has prevented the Subcommittee from obtaining the details on the transactions in the Zardari accounts.
Account Monitoring. Citibank told the Subcommittee staff that, in 1996, the Swiss office of the private bank conducted a number of reviews of the Zardari Swiss accounts, finally deciding in October to close them.
The first review was allegedly in early 1996, triggered by increasing publicity about allegations of corruption against Mr. Zardari. Citibank told the Subcommittee staff that Messrs. Holderbeke, [Salim] Raza, Sharma and Amouzegar participated in the review, and apparently concluded that the allegations were politically motivated and that the accounts should remain open. The Subcommittee staff was told that the review did not include looking at the accounts’ transaction activity.
In March or April, 1996, Mr. Amouzegar asked that the overall limit on the Zardari accounts be increased from $40 million to $60 million, apparently because the accounts had reached the previously imposed limit of $40 million. Citibank told the Subcommittee staff that Mr. Holderbeke considered the request, but declined to increase the $40 million limit.
In June, press reports in the United Kingdom that Mr. Zardari had purchased real estate in London triggered still another review of the Zardari accounts. Citibank private bank told the Subcommittee staff that its Swiss office internally discussed the source of the funds for the property purchase. Mr. Amouzegar and Mr. [Salim] Raza then met with Mr. Schlegelmilch, who allegedly informed them that funds had been deposited into the Citibank accounts, transferred to another PIC account outside of Citibank and used to purchase the property. Mr. Schlegelmilch allegedly indicated the funds had come from the sale of some sugar mills and were legitimate. Citibank told the Subcommittee staff it is not sure if anyone at the private bank attempted to validate the information about the sale of the sugar mills. In addition, even though this account activity violated the condition imposed by Citibank that the accounts were not to be used as a pass through for funds, the accounts were kept open.
Closing the Accounts. In July 1996, after Mr. Amouzegar left the private bank to open his own company, another private banker, Cedric Grant, took over management of the Zardari accounts. Citibank told the Subcommittee staff that Mr. Grant began to review the Zardari accounts about one month later to familiarize himself with them. He also reviewed the transactions that had taken place within the accounts.
In September and October 1996, press accounts in Pakistan repeatedly raised questions about corruption by Mr. Zardari and Ms. Bhutto, as Ms. Bhutto’s re-election campaign increased its activities prior to a February election date. In September, Ms. Bhutto’s only surviving brother, Murtaza Bhutto, was assassinated, and Ms. Bhutto’s mother accused Ms. Bhutto and Mr. Zardari of masterminding the murder, because the brother had been leading opposition to Ms. Bhutto.
In October, Mr. Grant completed his review of the Zardari accounts and provided a written analysis to Messrs. Holderbeke, Sharma and [Salim] Raza, according to Citibank. Mr. Grant had found numerous violations of the account restrictions imposed by Citibank, including multiple transactions and funding pass-throughs. Citibank told the Subcommittee staff that the accounts had functioned more as checking accounts than passive investment accounts, directly contrary to the private bank’s restrictions. Apparently, well over $40 million had flowed through the accounts, though Subcommittee staff were unable to ascertain the actual amount because Swiss bank secrecy law prohibits Citibank from sharing that information with the Subcommittee. Citibank indicated that Mr. Amouzegar had either ignored or did not pay attention to the account activity. Mr. Grant recommended closing the accounts, and they were closed by January 1997.
[Note: In May 1997, Mr. Shaukat Aziz was transferred at Citibank’s New York headquarters, from his position as head of credit card operations to head of private banking. In November 1996, Mr. Farooq Laghari had dismissed the government of Ms. Benazir Bhutto-Zardari; and in February 1997, Mr. Nawaz Sharif became Prime Minister.]
Legal Proceedings. On September 8, 1997, the Swiss government issued orders freezing the Zardari and Bhutto accounts at Citibank and three other banks in Switzerland at the request of the Pakistani government. Since Citibank had closed its Zardari accounts in January 1997, it took no action nor did it make any effort to inform U.S. authorities of the accounts until late November 1997. Citibank contacted the Federal Reserve and OCC [Office of the Comptroller of the Currency, the banking supervision arm of the US Department of Treasury] about the Zardari accounts in late November, in anticipation of a New York Times article that eventually ran in January 1998, alleging that Mr. Zardari had accepted bribes, and that he held Citibank accounts in Dubai and Switzerland. On December 8 and 11, 1997, Citibank briefed the OCC and the Federal Reserve, respectively, about the accounts and the steps it had taken as a result of the Zardari matter. These steps included: closing all of the accounts that had been referred by Mr. Schlegelmilch to the private bank and terminating his referral agreement; reviewing all of the accounts opened in the Dubai office; and tightening up account opening procedures in Dubai, including requiring the Dubai office to identify the beneficial owner of all Dubai accounts. Citibank did not identify any changes made or planned for the Swiss office, even though the majority of the activity with respect to the Zardari accounts had taken place in Switzerland.
On December 5, 1997, Citibank prepared a Suspicious Activity Report on the Zardari accounts and filed it with the Financial Crimes Enforcement Network at the U.S. Department of Treasury. The filing was made fourteen months after its decision to close the Zardari accounts; thirteen months after Mr. Zardari was arrested a second time for corruption in November 1996; and nearly two months after the Swiss government had ordered four Swiss banks (including Citibank Switzerland) to freeze all Zardari accounts.
In June 1998, Switzerland indicted Mr. Schlegelmilch and two Swiss businessmen, the former senior executive vice president of SGS and the managing director of Cotecna, for money laundering in connection with kickbacks paid by the Swiss companies for the award of a government contract by Pakistan. In July 1998, Mr. Zardari was indicted for violation of Swiss money laundering law in connection with the same incident. Ms. Bhutto was indicted in Switzerland for the same offense in August 1998. A trial on the charges is expected.
In October 1998, Pakistan indicted Mr. Zardari and Ms. Bhutto for accepting kickbacks from the two Swiss companies in exchange for the award of a government contract. On April 15, 1999, after an 18-month trial, Pakistan’s Lahore High Court convicted Ms. Bhutto and Mr. Zardari of accepting the kickbacks and sentenced them to 5 years in prison, fined them $8.6 million and disqualified them from holding public office. Ms. Bhutto, who now lives in London, denounced the decision. Mr. Zardari remains in jail. Additional criminal charges are pending against both in Pakistani courts.
On December 11, 1997, Citicorp’s Chairman John Reed wrote the following to the Board of Directors:
“We have another issue with the husband of Ex-Prime Minister Bhutto of Pakistan. I do not yet understand the facts but I am inclined to think that we made a mistake. More reason than ever to rework our Private Bank.”
Mr. Reed told the Subcommittee staff that it was the combination of the Salinas and Zardari accounts that made him charge Mr. [Shaukat] Aziz [currently, Prime Minister of Pakistan], the new private bank head, with taking a hard look at the bank’s public figure policy and public figure accounts.
The Issues
The Zardari case history raises issues involving due diligence, secrecy and public figure accounts. The Zardari case history begins with the Citibank Dubai branch’s failure to identify the true beneficial owner of the M.S. Capricorn Trading account. As a result, the account officer in Dubai performed due diligence on an individual who had no relationship to the account being opened. In Switzerland, Citibank officials opened three private bank accounts despite evidence of impropriety on the part of Mr. Zardari. In an interview with Subcommittee staff, Citigroup Co-Chair John Reed informed the Subcommittee staff that he had been advised by Citibank officials in preparation for a trip to Pakistan in February 1994, that there were troubling accusations concerning corruption surrounding Mr. Zardari, that he should stay away from him, and that he was not a man with whom the bank wanted to be associated. Yet one year later, the private bank opened three accounts for Mr. Zardari in Switzerland. Mr. Reed told the Subcommittee staff that when he learned of the Zardari accounts he thought the account officer must have been “an idiot.”
Citibank has been unable to confirm that bank employees verified that Mr. Zardari had a level of wealth sufficient to support the size of the accounts that he was opening. In addition, the Swiss private banker took no action to validate the legitimacy of the source of the funds that were deposited into the account. For example, there was no effort made to verify the claims that some of the funds derived from the sale of sugar mills.
Citibank also performed no due diligence on the client owned and managed PICs that were the named accountholders. Because the PICs were client-created, the bank’s failure to perform due diligence on the PICs meant that it had no knowledge of the activities, assets or entities involved with the corporations. One of the PICs, Bomer Finance, has been determined to have been a repository for kickbacks paid to Mr. Zardari, and those kickbacks tainted funds deposited at the Geneva branch of Union Bank of Switzerland. Documentation has not been made available to determine whether Bomer Finance also used its Citibank account for illicit funds.
Another due diligence lapse was the private bank’s failure to monitor the Zardari accounts to ensure that the account restrictions imposed on them were being followed. When officials were presented with evidence in 1996 that the restrictions were being violated, they nevertheless allowed the accounts to continue.
The Zardari accounts in Switzerland were opened one day before Raul Salinas was arrested. The account was repeatedly reviewed in 1996, after the Salinas scandal became public. Yet there is no evidence that anyone in the private bank had been sensitized to the problems associated with handling an account of a person suspected of corruption.
The Zardari example also demonstrates the practical consequences of secrecy in private banking. Citibank claims that its decisionmaking in the Zardari matter cannot be fully explained or documented, since all Citibank officials are subject to Swiss secrecy laws prohibiting discussion of client-specific information. In light of the fact that U.S. banks are supposed to oversee their foreign branches and enforce U.S. law, including anti-money laundering requirements, this inability to produce documentation related to a troubling case again highlights the problems with U.S. banks choosing to operate in secrecy jurisdictions.
Pattern of Poor Account Management. The Zardari case history took place during a series of critical internal and federal audits between 1992 and 1997 of the Swiss office which, during most of that time, served as the headquarters of the private bank. The shortcomings identified in the audits included policies, procedures, and problems that affected the management of the Zardari accounts. They included:
* failure of the “corporate culture” in the Swiss office to foster ” ‘a climate of integrity, ethical conduct and prudent risk taking’ by U.S. standards”;
* inadequate due diligence;
* “less than acceptable internal controls”;
* lack of oversight and control of third party referral agents such as Schlegelmilch; and
* inadequate monitoring of accounts;
all of which resulted in “unacceptable” internal audit ratings. In December 1995, the Swiss office received the lowest audit score received by any office in the private bank during the 1990s. These audit scores indicate the office’s poor handling of the Zardari accounts was part of an ongoing pattern of poor account management.
[End of excerpt]
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Source: MINORITY STAFF REPORT FOR PERMANENT SUBCOMMITTEE ON INVESTIGATIONS HEARING ON PRIVATE BANKING AND MONEY LAUNDERING: A CASE STUDY OF OPPORTUNITIES AND VULNERABILITIES, November 9, 1999
http://www.senate.gov/~gov_affairs/110999_report.htm
The Report features as an annex to
S. Hrg. 106-248
PRIVATE BANKING AND MONEY LAUNDERING: A CASE STUDY OF OPPORTUNITIES AND VULNERABILITIES, Hearings before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, One Hundred Sixth Congress, First Session, November 9 and 10, 1999.
This xiv+1114 pages report is available at:
http://www.gpo.gov/congress/senate/senate12sh106.html
as TEXT [424KB] and as PDF [30MB] files
It provides (on page numbers indicated) the following:
Documents relating to Asif Ali Zardari:
a. Swiss Form A identifying Asif Ali Zardari as the
beneficial owner of the Capricorn Trading S.A.
account in the Citibank Private Bank in Switzerland
[600]…………………………………. 445
[Signed by “Asif Ali Zardari, Bilawal House, Karachi
(Pak)”]
b. Wire transfer records documenting transfers of $18
million into Mr. Zardari’s Capricorn Trading S.A.
account in Dubai and transfers of $18.3 million out
of the Dubai account into the Capricorn Trading S.A.
account in Citibank Private Bank in Switzerland
……………………………………… 446
10/5/94 transfer of $5 million from A.R.Y. International
Exchange into the Capricorn Trading S.A. account in
Citibank in Dubai [X6903-4];
10/6/94 transfer of $5 million from A.R.Y. International
Exchange into the Capricorn Trading S.A. account in
Citibank in Dubai [X6900-2];
2/24/95 transfer of $8 million from Morgan NYC into the
Capricorn Trading S.A. account in Citibank in Dubai;
3/6/95 transfer of $8.1 million from the Capricorn
Trading S.A. account in Citibank in Dubai into the
Capricorn Trading S.A. account in Citibank Private Bank
in Switzerland;
5/3/95 transfer of $10.2 million from the Capricorn
Trading S.A. account in Citibank in Dubai into the
Capricorn Trading S.A. account in Citibank Private Bank
in Switzerland;
5/4/94 record of Citibank Private Bank in Switzerland
credit of $10.2 million to account of Capricorn Trading
S.A.
c. Mandate Agreement between Asif Ali Zardari and Jens
Schlegelmilch concerning Bomer Finance, Inc.
[601-2]………………………………… 466
d. Mandate Agreement between Begum Nusrat Bhutto and Jens
Schlegelmilch concerning Mariston Securities, Inc.
[603-4]………………………………… 468
e. British Virgin Islands Certificate of Incorporation
for Capricorn Trading S.A.
[605]………………………………….. 470
f. 6/29/94 letter from Cotecna Inspection S.A., stating
that if it receives a contract from the government of
Pakistan for the inspection and price verification of
imported goods, it will pay Mariston Securities, Inc.,
6 percent of the payments made under the contract
[597]………………………………….. 471
g. 12/11/97 communication from John Reed to Citibank Board,
including a discussion of the Zardari matter.. 472
h. List of meetings between Mr. Zardari and Citibank
personnel, provided by Citibank ………….. 474
US Bank Money Laundering –
Enormous By Any Measure
By James Petras
Professor of Sociology, Binghamton University
9-1-2
There is a consensus among U.S. Congressional Investigators, former bankers and international banking experts that U.S. and European banks launder between $500 billion and $1 trillion of dirty money each year, half of which is laundered by U.S. banks alone. As Senator Carl Levin summarizes the record: “Estimates are that $500 billion to $1 trillion of international criminal proceeds are moved internationally and deposited into bank accounts annually. It is estimated that half of that money comes to the United States”.
Over a decade then, between $2.5 and $5 trillion criminal proceeds have been laundered by U.S. banks and circulated in the U.S. financial circuits. Senator Levin’s statement however, only covers criminal proceeds, according to U.S. laws. It does not include illegal transfers and capital flows from corrupt political leaders, or tax evasion by overseas businesses. A leading U.S. scholar who is an expert on international finance associated with the prestigious Brookings Institute estimates “the flow of corrupt money out of developing (Third World) and transitional (ex-Communist) economies into Western coffers at $20 to $40 billion a year and the flow stemming from mis-priced trade at $80 billion a year or more. My lowest estimate is $100 billion per year by these two means by which we facilitated a trillion dollars in the decade, at least half to the United States. Including the other elements of illegal flight capital would produce much higher figures. The Brookings expert also did not include illegal shifts of real estate and securities titles, wire fraud, etc.
In other words, an incomplete figure of dirty money (laundered criminal and corrupt money) flowing into U.S. coffers during the 1990s amounted to $3-$5.5 trillion. This is not the complete picture but it gives us a basis to estimate the significance of the “dirty money factor” in evaluating the U.S. economy. In the first place, it is clear that the combined laundered and dirty money flows cover part of the U.S. deficit in its balance of merchandise trade which ranges in the hundreds of billions annually. As it stands, the U.S. trade deficit is close to $300 billion. Without the “dirty money” the U.S. economy external accounts would be totally unsustainable, living standards would plummet, the dollar would weaken, the available investment and loan capital would shrink and Washington would not be able to sustain its global empire. And the importance of laundered money is forecast to increase. Former private banker Antonio Geraldi, in testimony before the Senate Subcommittee projects significant growth in U.S. bank laundering. “The forecasters also predict the amounts laundered in the trillions of dollars and growing disproportionately to legitimate funds.” The $500 billion of criminal and dirty money flowing into and through the major U.S. banks far exceeds the net revenues of all the IT companies in the U.S., not to speak of their profits. These yearly inflows surpass all the net transfers by the major U.S. oil producers, military industries and airplane manufacturers. The biggest U.S. banks, particularly Citibank, derive a high percentage of their banking profits from serving these criminal and dirty money accounts. The big U.S. banks and key institutions sustain U.S. global power via their money laundering and managing of illegally obtained overseas funds.
U.S. Banks and The Dirty Money Empire
Washington and the mass media have portrayed the U.S. as being in the forefront of the struggle against narco trafficking, drug laundering and political corruption: the image is of clean white hands fighting dirty money. The truth is exactly the opposite. U.S. banks have developed a highly elaborate set of policies for transferring illicit funds to the U.S., investing those funds in legitimate businesses or U.S. government bonds and legitimating them. The U.S. Congress has held numerous hearings, provided detailed exposés of the illicit practices of the banks, passed several laws and called for stiffer enforcement by any number of public regulators and private bankers. Yet the biggest banks continue their practices, the sum of dirty money grows exponentially, because both the State and the banks have neither the will nor the interest to put an end to the practices that provide high profits and buttress an otherwise fragile empire.
First thing to note about the money laundering business, whether criminal or corrupt, is that it is carried out by the most important banks in the USA. Secondly, the practices of bank officials involved in money laundering have the backing and encouragement of the highest levels of the banking institutions – these are not isolated cases by loose cannons. This is clear in the case of Citibank’s laundering of Raul Salinas (brother of Mexico’s ex-President) $200 million account. When Salinas was arrested and his large scale theft of government funds was exposed, his private bank manager at Citibank, Amy Elliott told her colleagues that “this goes in the very, very top of the corporation, this was known…on the very top. We are little pawns in this whole thing” (p.35).
Citibank, the biggest money launderer, is the biggest bank in the U.S., with 180,000 employees world-wide operating in 100 countries, with $700 billion in known assets and over $100 billion in client assets in private bank (secret accounts) operating private banking offices in 30 countries, which is the largest global presence of any U.S. private bank. It is important to clarify what is meant by “private bank.”
Private Banking is a sector of a bank which caters to extremely wealthy clients ($1 million deposits and up). The big banks charge customers a fee for managing their assets and for providing the specialized services of the private banks. Private Bank services go beyond the routine banking services and include investment guidance, estate planning, tax assistance, off-shore accounts, and complicated schemes designed to secure the confidentiality of financial transactions. The attractiveness of the “Private Banks” (PB) for money laundering is that they sell secrecy to the dirty money clients. There are two methods that big Banks use to launder money: via private banks and via correspondent banking. PB routinely use code names for accounts, concentration accounts (concentration accounts co-mingles bank funds with client funds which cut off paper trails for billions of dollars of wire transfers) that disguise the movement of client funds, and offshore private investment corporations (PIC) located in countries with strict secrecy laws (Cayman Island, Bahamas, etc.)
For example, in the case of Raul Salinas, PB personnel at Citibank helped Salinas transfer $90 to $100 million out of Mexico in a manner that effectively disguised the funds’ sources and destination thus breaking the funds’ paper trail. In routine fashion, Citibank set up a dummy offshore corporation, provided Salinas with a secret code name, provided an alias for a third party intermediary who deposited the money in a Citibank account in Mexico and transferred the money in a concentration account to New York where it was then moved to Switzerland and London. The PICs are designed by the big banks for the purpose of holding and hiding a person’s assets. The nominal officers, trustees and shareholder of these shell corporations are themselves shell corporations controlled by the PB. The PIC then becomes the holder of the various bank and investment accounts and the ownership of the private bank clients is buried in the records of so-called jurisdiction such as the Cayman Islands. Private bankers of the big banks like Citibank keep pre-packaged PICs on the shelf awaiting activation when a private bank client wants one. The system works like Russian Matryoshka dolls, shells within shells within shells, which in the end can be impenetrable to a legal process.
The complicity of the state in big bank money laundering is evident when one reviews the historic record. Big bank money laundering has been investigated, audited, criticized and subject to legislation; the banks have written procedures to comply. Yet banks like Citibank and the other big ten banks ignore the procedures and laws and the government ignores the non-compliance. Over the last 20 years, big bank laundering of criminal funds and looted funds has increased geometrically, dwarfing in size and rates of profit the activities in the formal economy. Estimates by experts place the rate of return in the PB market between 20-25% annually. Congressional investigations revealed that Citibank provided “services” for 4 political swindlers moving $380 million: Raul Salinas – $80-$100 million, Asif Ali Zardari (husband of former Prime Minister of Pakistan) in excess of $40 million, El Hadj Omar Bongo (dictator of Gabon since 1967) in excess of $130 million, the Abacha sons of General Abacha ex-dictator of Nigeria – in excess of $110 million. In all cases Citibank violated all of its own procedures and government guidelines: there was no client profile (review of client background), determination of the source of the funds, nor of any violations of country laws from which the money accrued. On the contrary, the bank facilitated the outflow in its prepackaged format: shell corporations were established, code names were provided, funds were moved through concentration accounts, the funds were invested in legitimate businesses or in U.S. bonds, etc. In none of these cases – or thousands of others – was due diligence practiced by the banks (under due diligence a private bank is obligated by law to take steps to ensure that it does not facilitate money laundering). In none of these cases were the top banking officials brought to court and tried. Even after arrest of their clients, Citibank continued to provide services, including the movement of funds to secret accounts and the provision of loans.
Correspondent Banks: The Second Track
The second and related route which the big banks use to launder hundreds of billions of dirty money is through “correspondent banking” (CB). CB is the provision of banking services by one bank to another bank. It is a highly profitable and significant sector of big banking. It enables overseas banks to conduct business and provide services for their customers – including drug dealers and others engaged in criminal activity – in jurisdictions like the U.S. where the banks have no physical presence. A bank that is licensed in a foreign country and has no office in the United States for its customers attracts and retains wealthy criminal clients interested in laundering money in the U.S. Instead of exposing itself to U.S. controls and incurring the high costs of locating in the U.S., the bank will open a correspondent account with an existing U.S. bank. By establishing such a relationship, the foreign bank (called a respondent) and through it, its criminal customers, receive many or all of the services offered by the U.S. big banks called the correspondent.
Today, all the big U.S. banks have established multiple correspondent relationships throughout the world so they may engage in international financial transactions for themselves and their clients in places where they do have a physical presence. Many of the largest U.S. and European banks located in the financial centers of the world serve as correspondents for thousands of other banks. Most of the offshore banks laundering billions for criminal clients have accounts in the U.S. All the big banks specializing in international fund transfer are called money center banks, some of the biggest process up to $1 trillion in wire transfers a day. For the billionaire criminals an important feature of correspondent relationships is that they provide access to international transfer systems – that facilitate the rapid transfer of funds across international boundaries and within countries. The most recent estimates (1998) are that 60 offshore jurisdictions around the world licensed about 4,000 offshore banks which control approximately $5 trillion in assets.
One of the major sources of impoverishment and crises in Africa, Asia, Latin America, Russia and the other countries of the ex-U.S.S.R. and Eastern Europe, is the pillage of the economy and the hundreds of billions of dollars which are transferred out of the country via the corresponding banking system and the Private Banking system linked to the biggest banks in the U.S. and Europe. Russia alone has seen over $200 billion illegally transferred in the course of the 1990s. The massive shift of capital from these countries to the U.S. and European banks has generated mass impoverishment and economic instability and crises. This in turn has created increased vulnerability to pressure from the IMF and World Bank to liberalize their banking and financial systems leading to further flight and deregulation which spawns greater corruption and overseas transfers via private banks as the Senate reports demonstrate.
The increasing polarization of the world is embedded in this organized system of criminal and corrupt financial transactions. While speculation and foreign debt payments play a role in undermining living standards in the crisis regions, the multi-trillion dollar money laundering and bank servicing of corrupt officials is a much more significant factor, sustaining Western prosperity, U.S. empire building and financial stability. The scale, scope and time frame of transfers and money laundering, the centrality of the biggest banking enterprises and the complicity of the governments, strongly suggests that the dynamics of growth and stagnation, empire and re-colonization are intimately related to a new form of capitalism built around pillage, criminality, corruption and complicity.
James Petras is a Professor of Sociology at Binghamton University in Binghamton, New York. He is the author of 57 books. His latest, Globalization Unmasked: Imperialism in the New Millenium
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Posted by Dr. Manzer Durrani in Politics on June 19th, 2012
LETTER TO EDITOR
June 19th, 2012
Gillani Replaces Gilani
Has Gilani been ousted by the SC or he took to the alter to save Zardari? Whatever, but aren’t we as a nation back to square one? Whoever be the next PM, would he write to the Swiss Court to reopen the 60 million dollar case? Not Likely. Would that not restart the replay of the entire episode?
And, if the ruling elite is determined for the replay, why not do it with gusto? Get the younger MNA Gilani (Musa or Ali whatever his name) elected as the leader of the house. It will not only be a “Tit for Tat, If you kill my rat I will kill your cat”, but also provide elder Gilani with the continuity of staying put in the PM House and travelling with his son in the flag car. If Lalu Parasad could get his illiterate wife Rabri Devi elected as the CM Bihar overnight, why can’t we do it here also?!
Col. Riaz Jafri (Retd)
Posted by Dr. Manzer Durrani in Pakistan's Hall of Shame on June 19th, 2012
Fact 1. On September 5, 2005, Interior Ministry through an official notification placed the services of Dr Arsalan Iftikhar (Health/B-17), Section Officer Health Department Balochistan, at the disposal of Ministry of Interior for his posting as an assistant director FIA on deputation basis for a period of three year.Fact 2. On September 18, 2005 Chief Secretary Balochistan K B Rind through an official notification referred to the Interior Ministry’s Sept 5 notification announces to relieve Dr Arsalan of his duties from the province with immediate affect.Fact 3. On October 1st, 2005, the ministry issued yet another order to the commandant National Police Academy, Islamabad saying: “Dr Arsalan Iftikhar (Health/BS-17) Government of Balochistan, posted in FIA vide Notification No.3/1/2002-Estb (FIA) dated 5.9.2005 is hereby attached with the National Police Academy to undergo training with the C.T.P Batch for the period of nine (09) months w.e.f. 3.10.2005.”Fact 4. On May 24, 2006, the ministry issued an order to allow Dr Arsalan for completion of remaining (field) training programme alongwith the 32nd batch of the PSP probationers.Fact 5. On June 27th 2006, the National Police Academy issued an order saying, “Vide Govt. of Pakistan, Ministry of Interior letter No. 3/4/2006/Estb/(FIA), dated 24.05.2006, Dr Arsalan Iftikhar (DD FIA), is hereby relieved on 27th June, 2006 (A.N) for completion of remaining training programme of 32nd CTP, and directed to report to Elite Police Training School, Bedian Lahore on 02.07.2006 for six weeks Orientation Course. After completion of the said course he will report to CPO Punjab, Lahore for Phase-III part of training which is six month Field Attachment.Fact 6. On 19.08.2006, the Inspector General of Police Punjab issued order for Dr Arsalan’s attachment with Superintendent of Police Cantt. Division, Capital City District, Lahore for field training phase-III.Fact 7. On 30.08.2006, the police department Punjab issued Dr Arsalan’s detailed schedule attachment for 24 weeks.Fact 8. On October 19, 2006, Punjab Police issued yet another order announcing that along with seven other regular serving police officers, Arsalan Iftikhar is nominated for a foreign short training course in combating international terrorism and organised crime. The same order added: “Ministry of Interior, National Police Bureau, Islamabad has approved the nomination of following officers (that include Dr Arsalan) for the subject course scheduled to be held from 30-10-2006 to 03-11-2006 in Istanbul.”
How a trained medical doctor of modest financial background, unemployed as recently as 2008, landed himself with a net worth of Rs900 million is a question which we cannot wish away.
Posted by Dr. Manzer Durrani in Corruption on June 18th, 2012
Parchee Player Muhammad Sami, Manzoor-i-Nazar of Zardari, deliberately lost todays ODI match against Sri Lanka. This match also smacks of a fix!
Zardari’s appearance on Pakistan’s political scene, came as a gift of Pakistan’s destruction Party Chief, Zulfiqar Ali Bhutto and his CIA agent daughter Benazir. By her death, the baton of power went to Zardari, Bhuttos son-in-law. Incompetent power hungry Indian Gujratis like Bhuttos, joined hand with Sindhi Wadera like Hakim ali Zardari, and his evil son Zardari.
Zardari’s figerprints are seen in the destruction of the following Pakistani institutions, one by one:
“Even the Asif Ali Zardari, is at times photographed with wine in hand. Many army officers are whisky-quaffers. Adverts for alcohol-detox clinics are widespread.”
The Economist also showed a cartoon of a Pakistan Army Officer with a whiskey bottle (see below):
Even the last bastion of entertainment for Pakistani public, sports, have also been hijacked by Zardari. This incompetent matriculate has now destroyed Pakistan’s cricket.
Zardari has destroyed Pakistan cricket by loading the Pakistan Cricket Control Board and the Cricket Selectors Committee by PPP Jiyalas
TODAY PAKISTAN LOST AN ODI TO SRI LANKA, BECA– — USE ZARDARI SIFARASHI MUHAMMAD SAMI PLAYED DISASTROUS CRICKET AND SNATCHED DEFEAT FROM THE HANDS OF VICTORY.
The last source of enjoyment for the suffering 180 million Pakistanis has also been destroyed by Zardari’s meddling. PPP has become like the Communist Party of the Soviet Era, it has its tentacles in all endeavour of Pakistani public life.
Pakistanis are in despair, but Zardari’s patrons the Americans are jumping with joy. He has removed all obstacles for them to use Pakistani roads to take supplies to their troops from Karachi to Khyber. It is also rumored that Zardari has allowed some of the three thousand Americans, who were kicked out from Pakistan over Raymond Davis Affair. In all these activities CIA agents like Farhatullah Babar, Rehman Malik, Shakeel Afridi, Yousuf Raza Gilani, Nawaz Sharif, Shahbaz Sharif, Asfandyar Wali, Gov.Raisani (who is getting a regular supply of Kentucky Bourbon through the NATO supplies), and a mysterious person named Khan. This name has appeared before in Los Angeles Times report, May 09, 2011.
Zardari’s alcoholic habits are well known. Once druk, he yelled at a reporter to shut up. The Economist reported on April 21st, 2012 about Zardari’s alcoholism:
Even the president, Asif Ali Zardari, is at times photographed with wine in hand.”. Adverts for alcohol-detox clinics are widespread (in Rawalpindi).
Yahya Khan was the first Sharabi, who destroyed hlf of Pakistan, Zardari is the second Sharabi, who will destroy the rest.
Alcoholic Zardari’s Damage to Pakistan Cricket Bore Fruit
The Pakistan Cricket Board is full of nincompoops and jokers, they don’t know anything about cricket and they don’t know anything about management. Each time there is a new tournament or a new tour, the team selection is pathetic. Earlier I used to get surprised and shocked but, not any more because, you can always expect the unexpected from these goons.
Number one, they are biased and select players and captains on the basis of regionalism, nepotism and cronyism. Number two, they don’t care about the game or the future of cricket in Pakistan, they are interested about their future and how much money and fame they can get in making a fast buck. Hence, they select the “Parchee Players” like, Muhammad Sami, Shoaib Malik, Faisal Iqbal, Imran Farhat who are backed by their respective Chachas, Mamas and Father-in-Laws.
The appointment of the Captain is so sacred and so holy that he must be from the holy-land only otherwise he cannot survive. I was wondering what was wrong with Shahid Afridi Captaining the ODI and T20′s side and he did a pretty good job in gelling the wounded “langree-looli” team after that SPOT FIXING incident and under his captaincy he made it to the World Cup semifinals and we all know what happened during that match in Mohali and the reward for making it up to the semifinal which was a feat that was achieved after more than a decade was, ‘stripping him off the captaincy job’. This happens only in Pakistan.
Making Hafeez the T20 Captain “just for the Sri Lanka tour” is another joke and a Frankinstein experiment. Hafeez has been playing cricket for almost a decade and in between he was lost and forgotten during the days of Inzamam, Younus Khan captaincy. The person who rediscovered Hafeez is Afridi. Afridi as a captain gave Hafeez numerous opportunities to open the batting and bowling for Pakistan at international level. He actually made Hafeez what he is today by building his confidence. Now, they make Hafeez the Captain and make Afridi play under him? Obviously it hurts to anyone be it Afridi or anyone if such a musical chair game is played where he is demoted for no reason.
WE all thought that anyone who will replace Ijaz Butt would be a better Chairman but, Zaka Ashraf having no experience of the game or even that of man management appears to be a puppet and a toy in the hands of the old regime of bureaucrats, he does nothing and his main goal is to bring a club level team from Canada to play in Pakistan to prove to the nation that he has restored international cricket in Pakistan? If he does so it shouldn’t be a feather in his cap but, a shovel in Ijaz’s Butt.
Now, look at the team that has been selected for all three formats, Hafeez is the captain of the T20 and Misbah remains captain for Test and ODI’s. How farcical and how comical? And, on top of that the news that ”Misbah stepped down from T20″ Why the F is he playing cricket? He should retire and play Carom Board in Mianwali.
As regards the players, they are either Sifarishi or Sialkoti. Count the number of sifarishi players and the Sialkoti players, is it 73.87% ???? 🙂
Most appalling inclusions are of Shoaib Malik, Sohail Tanvir and Yasir Arafat in the T20 squad.
For ODI, Sarfaraz Ahmad the wicket keeper should not be in the team. That is my view because, I have not seen him doing anything with the bat, even that Asia Cup final score was nothing to write home about it was more of a pain than a pleasure. Farhat is back again with a pain in his whatever and that is because he got a new Parchee, for Tests, Taufiq Umar, Faisal Iqbal are a drag and Who is Mohammad Ayub and Misbah ul Haq?
If the writing is honest it cannot be separated from the man who wrote it.
YAARI HAI ZARDARI HAI – AUR – CRICKET KI BARBADI HAI
YAARI HAI-ZARDARI HAI AUR CRICKET KI BARBADI HAI
WHY is Mr. Asif Zardari poking his nose in cricket? Just because he is the sleeping patron in chief of the cricket board in Pakistn does not give him the right to do so. In politics, he used ALL his resources to come into power and sneaked in through the backdoor. The PPP got sympathy votes because of BB’s demise and Zardari bulldozed himself into power. Ever since he came into power he is bulldozing the country, which is almost flattened by corruption, lawlessness and disasters.
Recently he went on a YATRA to INDIA and came back looking holier than the COW. He seems to be looking very inspired by Manmohan Singh and wants to follow his footprints. Also, talking too much about developing bilateral ties between the two countries.
I hope its not going to be a “Kawwa Challa Hans Ki Chaal…” or, follow the sheep or the PiedPipper story? You created IPL, I will create PPL and you roar, I fart. Why the HELLO Pakistan needs to follow the footsteps of The BCCI? They can do weird things, adapt strange policies, demand extreme measures but, the PCB cannot do the same. They are in no position to demand, they have everything to lose and nothing to gain i.e., if they further antagonize the ICC, they will be isolated. Is this what Mr. Zardari wants do do before he takes another permanent one way flight to Dubai?
Zardari himself is always in “Chay-Oss” (this is exactly how he reads Chaos – so now his speeches are written in phonetics.) and he sought advise on cricket from 5 ex-Chairmen of the PCB and one of them is the “Buffoon” Ijaz Butt. (By the way its not me but Malcolm Speed the former Chairman of the ICC called him “A Buffoon”). And, why is DNA not in this committee? That is because he is a sensible person and he is the one who gave the PCB a written constitution for the first time in 60 years?
I support this rule i.e., the ICC has set March 2013 deadline for all its affiliated members/boards to make their system more democratic and to ensure that no kind of interference is done in their affairs by their respective governments. The maximum punishment for not following the instructions could amount to disaffiliation of the PCB from the ICC.
Pakistan is already isolated from the rest of the world. Not even Bangladesh wants to come to Pakistan to play cricket in Pakistan. What a shame this happened during Zardari and Ijaz Butt’s time and neither of the two has extended their apologies to the Sri Lankan government, their cricket board, nor the players or, the people of Sri Lanka for that horrendous terrorist attack in Lahore.
Since then Pakistan is still playing International cricket outside their country and are at the mercy of the other board’s schedule and their moods. Right now they are at the mercy of SL and Australian cricket board and waiting for a reply from them i.e., to the SOS that Zaka has sent it to them saying, please, please, please accommodate us in your schedule and let us play a couple of matches with you in Sri Lanka.
Pakistan, if they remain adamant in their stupid approach will soon become an ORPHAN in the cricketing world. Paani may reh ker magar much say bair? Kimpossible. Neither Zardari nor Zaka or any of their cronies are able to see what they are doing? Zardari and Zaka will soon be gone it will be left for others may be Imran Khan to flung the Dung left by these Buffaloes and Cows.
Well, the PCB is a cash cow and that is why they are all hovering around like vultures and they have not wasted any opportunity in damaging the game of cricket in Pakistan. To make it to the British theater, you need to be White, middle-class, Oxbridge educated. And this is not just a single person’s opinion but, has been highlighted in the last 12 months by people all over in the UK.
Likewise in Pakistan if you want to make it to the national team and if you ant to be the captain of the Pakistan cricket team you have to be an elitist from the province of Punjab. You don’t need anyone to vouch for this bold statement, its known to everyone and everyone who is not from the Punjab is saying this. Well this blunt statement may hurt some of the people who are involved in it and they may say its not true but, history is there to prove it. Shall we start digging out the names or, shall we leave it here for the grave diggers to their job? Just for info: I’m writing a book. I’ve got the page numbers done! 🙂
The best thing for Zardari is to become a janitor at the Mazaar of his ex-wife.
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