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October 15, 2001

Narco News 2001

Citigroup's Rubin:

Banking on Terror

Citigroup Lobbies to Weaken Anti-Terror Legislation

Anti-Terror Controls Could Clip Bank Industry's Narco-Profits

Senator: Bank Lobbyists "are being very unpatriotic"

Time To Expose the "White Collar Terrorists"


By Al Giordano

Special to The Narco News Bulletin

The view is suddenly different from Citigroup headquarters in New York, and from the boardrooms of the large banks and financial institutions that compete with it, too.

We are not speaking of the empty vista of a city skyline where two towers once stood and thousands of innocent lives were lost. The sweat under the white collars of bank executives in New York is not due to fear of suicide bombers. The specter haunting Citigroup and the other large banks is that the fast march of current events could lead to a new public understanding and outrage: that terrorism and the illicit drug trade that funds it could not exist without banks to launder their funds.

The bankers and financiers knew, or should have known, all along that their money-laundering business has caused many atrocities, and would eventually lead to massacres on the scale of September 11th.

Three words must now enter the public lexicon: "White Collar Terrorists."

The kingpins of global organized crime do not wear sombreros nor turbans. They wear suits and ties. They attend political fundraisers. They hire big lobbying firms. They pressure and push lawmakers for loopholes that have, so far, allowed a system of "private banking," "correspondent banks," and "offshore shell banks" to launder the money of corrupt regimes and criminal empires across the world.

Citigroup is the largest financial institution in the world. It has been caught time and time again in narco-money laundering trails in our América and across the globe.

Citigroup, according to the Washington Post, is now lobbying to weaken anti-terrorism money-laundering legislation in Washington.

Narco News has extensively documented Citigroup's history of impunity and corruption when it comes to laundering drug money for corrupt regimes in Mexico and Peru, and Argentina, among other nations. We have also reported on the hypocrisy of Citigroup executive chairman Robert Rubin, who prosecuted Banamex in the Operation Casablanca case when he was U.S. Treasury Secretary, and then orchestrated the former National Bank of Mexico's purchase by Citigroup. Rubin, as alleged in a pending federal lawsuit by a former U.S. Customs Agent against his former department, presided over a Treasury regime that punished, harassed and silenced honest whistleblowers against corruption in his agencies.

In the aftermath of the September 11th attacks, President George W. Bush has proclaimed that Washington will now clamp down on the money laundering that funds terrorist organizations. But the White House has, so far, only frozen assets of foreign businesses, all of them from the Arab regions. The executive branch continues to allow impunity and corruption by U.S. financial powers, even as it grandstands against the terror-money trail.

Congress, however, has stood up to take on the real power-behind-the-terror-throne: United States banking and financial interests. The Washington Post reported last week that "Some of the nation's largest banks -- including Citigroup and J.P. Morgan Chase & Co. -- are lobbying to change key provisions of proposed money-laundering legislation."

The Washington Post reports:

Citigroup and other big banks want to change the wording of a provision that would require banks to actively monitor transactions they conduct for their wealthiest clients -- "private banking" customers -- and for clients of other banks -- "correspondent banking" services, sources said.

The banks want to include language that would give the secretary of the Treasury the authority to exempt U.S. banks from having to exercise enhanced oversight when doing business with banks from countries that have weak money-laundering laws, an industry lawyer familiar with the lobbying effort said.

In addition, Citigroup executive Rick Small has proposed language that would soften a provision barring U.S. banks from doing business with offshore shell banks that have no physical office and no affiliation with an established bank. Until recently, Small was one of the Federal Reserve Board's top money-laundering experts. He didn't return calls.

Each of these three areas of Citigroup's business - Private Banking, Correspondent Banking, and relations with Offshore Shell Banks - are keys to a system in which U.S. banks have been allowed to virtually monopolize the drug money trade. While U.S. authorities rail about "drug dealers," "cartels" and "narco-guerrillas," the true kingpins of the illegal drug trade are the banks and institutions that launder the drug money and hoard the profits. It is precisely for them that drug prohibition exists, and that governments protect them by prosecuting the lower levels of the illicit drug trade.

Bush's dishonest "war on terrorism" has so far followed the drug-war model of hypocrisy. He has targeted foreigners and outlaws, while leaving the powerful White Collar Terrorists within the United States to conduct business-as-usual. And thus, the institutional apparatus that funds and ensures future acts of terrorism is left in place, untouched.

Citigroup director Robert Rubin's cynical role as apologist and publicist for White Collar Terrorism did not end when he left his job as Treasury Secretary.

After the September 11th attacks, and the presidential speeches about money laundering by terrorists, Rubin penned a column for the Financial Times of London titled, with a straight face, "Getting Tough on Terror Funding."

"Fighting terrorism on a global scale must include a consistent and co-ordinated approach to stemming the flow of funds to terrorist organizations," began Rubin in his column.

Citigroup Directors Robert Rubin, Alfredo Harp, Roberto Hernández and Sandy Weill

Rubin praised the Clinton administration's actions (in effect, patting himself on the back for his own failures as Treasury Secretary) and also the Bush administration (in effect, polishing the apple for the administration whose complicity Rubin's Citigroup needs to continue business-as-usual).

According to banker Rubin, the U.S. government that regulates his and other banks has been an effective foe of illicit money laundering. In Rubin's self-interested fantasy world, one can close his eyes and almost see the twin towers of World Trade, still standing, and more than 4,000 workers assassinated there, still riding the elevator, smiling from 9 to 5 each day.

"The keys to success in this arena," writes the architect of Washington's failed policies against money-laundering, "are persistence, patience and, especially, international co-operation."

The blame, Rubin implies, lies not with the culture of impunity that allows U.S. bankers the loopholes they need to launder the drug money of despots and mafias across the world. Rubin seeks to point the finger away from his industry's responsibility and profits, toward foreign nations: "to be successful, the US must secure the full co-operation of the international community in adopting policies and procedures to identify, track and block the flow of funds related to money laundering or support for terrorism."

"Many countries," Rubin tells us, "lack the laws, enforcement mechanisms and political will to stem undesirable financial flows. Now is the time to address those weaknesses."

But what about the country where Rubin lives, and the government that regulates his bank? "The US cannot be effective in its financial assault on terrorism by going it alone," he argues.

Perhaps sensing that members of Congress are justifiably concerned that the United States has not effectively stemmed the illegal money laundering business within its borders, Rubin suggests that his fox be deputized to guard the chickens: "It is vitally important that the US government co-ordinate with the private sector throughout this process to maximise the effectiveness of this effort."

But as Rubin makes his hollow calls for "international cooperation," he and his bank are being most uncooperative with Congressional efforts to end money laundering at home, in the financial capital of the world.

Legislation sponsored by Senators Carl M. Levin (D-Michigan) and Charles E. Grassley (R-Iowa), according to the Washington Post, "is intended to make it easier for federal authorities to detect and dismantle the financial networks of global terrorists, drug dealers and other criminals."

The Senate Banking committee passed the anti-terror money laundering bill early this month. The Senators complained to the Washington Post that there are "efforts by industry to water down the bill." The Post specifically fingered Rubin's Citigroup and J.P. Morgan bank lobbyists as the perpetrators of the attempted dental surgery upon the legislation, intended, said Senator Levin, to assure that the anti-money laundering provisions would "have no teeth."

At Narco News, we will add this entire affair to our growing list of questions to be posed to Citigroup's Robert Rubin when we place him under oath and depose him in the Drug War on Trial case.

Levin warned that failing to clamp down on this kind of money laundering in the United States "could subjugate national security interests to those of big business."

Catherine Austin Fitts, the former managing director of New York financial powerhouse Dillon Read, warned, more than a year ago, that the United States policies on money laundering would lead to atrocity. She said that U.S. enforcement efforts against money laundering are "designed to make the least possible investment in the appearance of financial integrity, while ensuring that the US can become the premier money laundering country in the world, as well as the premiere reinvestment market for successfully laundered funds."

"Money laundering is the engine" wrote Fitts, in her April 2000 correspondence from the Fountainbleu Hotel in Miami Beach, where she attended Money Laundering Alert's Conference on Money Laundering. "It provides a low cost source of capital to build corporations in a manner that destroys the ability of the customers to maintain their cultural or political organization."

"The US enforcement effort to prevent money laundering is the financial equivalent of landing on Normandy beach with a water pistol," wrote Fitts, who said that even honest law enforcement officials are completely outgunned by the banks, their attorneys and lobbyists in trying to stamp out money laundering. "The Money Laundering Enforcement and Compliance Industry is designed to fail."

Writing from the belly of the beast, Fitts reported in April 2000, "This is the most uptight uncomfortable group I have ever been with. I got into the elevator with a relaxed and fun black guy yesterday. I commented about how uptight this crowd was. He laughed and said "Oh, that is because there are so many spooks around."

"At lunch," Fitts reported from the conference, "the guy from Citigroup was talking with someone from Bank of New York who looked genetically just like him. They were talking about who was 'agency' or not and how they coordinate
with the 'agency'. I was wearing blue jeans. I guess they did not realize I would understand what they were talking about."

The 'agency'? This brings us to the "CIA exemption" in U.S. money-laundering laws. One of the tougher U.S. anti-money laundering laws is called the Narcotics Kingpins Act. This act was approved by Congress in 1999 to freeze and seize the assets of drug money launderers. Industry lobbyists worked so hard to weaken that bill that a U.S. Congressmen, on the floor of the House, felt compelled to criticize the "narco-lobbyists" who pressured to gut the bill.

"The narco-lobbyists were paid well," said the Congressman in 1999. Apparently, it is still happening in 2001.

A little-known fact about the Narco Kingpins act is that it provides for a "CIA exemption." Before the U.S. publishes and updates its list of narco-kingpins across the globe whose assets are to be frozen and seized, the list is shown to the U.S. Central Intelligence Agency, which has, under the law, a veto power exercised in secrecy. This provision is both to protect criminals and bankers who launder drug money while simultaneously serving as CIA informants, and to give the CIA tremendous power to recruit new informants among corrupt officials and bankers, trading impunity for agency.

How could this be relevant to the September 11th attacks?

The U.S. government and media have placed the blame for the attacks on the organization of Osama Bin Laden and his allies, the Taliban in Afghanistan. Narco News repeats that Washington has not yet offered clear evidence of who may have been behind the crimes of September 11th, as articulately explained by former U.S. Army Special Operations Master Sgt. Stan Goff on our pages.

But Citigroup's Bob Rubin seems to accept the hypothesis that Bin Ladin and the Taliban were responsible. In his Financial Times column, he praises the Clinton and Bush administrations for their actions, prior to September 11th, against Bin Laden and the Taliban, as if they had done any good at all in protecting the victims of September.

"In July 1999," writes Rubin of his salad days at Treasury, his boss, Bill Clinton, "signed an order imposing an asset freeze against the Taliban. The basis of this order was a finding that the Taliban had allowed Osama bin Laden and his al-Qaeda organisation to use its territory as a safe haven and base of operations." Still, if bin Laden and the Taliban were, as Washington claims, responsible for the September 11th attacks, the asset freeze obviously proved impotent.

In Rubin's July of 1999, the U.S. government was still backing the Peru regime of Alberto Fujimori and his strongman Vladimiro Montesinos, despite mountains of evidence linking that regime, and Montesinos in particular, with terrorism and narco-trafficking. It is now undisputed that Montesinos was a CIA "intelligence asset." He was run by the CIA, even as he trampled on human rights and impeded true democracy in Peru - maybe, in fact, because he committed those atrocities.

During that same period, while Citigroup's Robert Rubin was the top U.S. official against money laundering as Treasury Secretary, Citigroup helped Montesinos and his family launder more than $18 million U.S. dollars. This was documented last Spring by Narco News.

Montesinos subsequently fell from grace with Washington and the CIA, became a fugitive, was later apprehended by the government of Venezuela and immediately extradited to Peru, where he is now reportedly incarcerated and awaiting trial for a long list of crimes and corruptions.

Among the large body of evidence against Montesinos are videotapes he made, secretly, of his meetings with officials, including U.S. officials, in his office. Videos that Montesinos had intended to blackmail others now have converted into evidence against him.

On one of those videotapes, filmed in January 2000, Montesinos told a Peruvian official that Bin Laden used Peru's capital city of Lima as his organization's center of Latin American activities. ``This is the rest area," Montesinos was recorded as saying, almost boasting, "not to carry out operations in Lima but to act on white Americans in Argentina, Brazil, Chile, and the rest of Latin America.''

The videotape was broadcast on September 21 on the TV station Frequencia Latina in Peru.

The Al Quaida network of Bin Laden could not have enjoyed such refuge in Peru without the approval of Montesinos, who ran Peru with an iron fist, and collected a fee from all whom he protected. This, as the U.S. government, according to Peruvian prosecutors, also gave $10 million dollars to groups under control of Montesinos, and as Citigroup helped launder $18 million dollars in Montesinos' illicit money.

Specifically, Citigroup laundered Montesinos money through its "Private Banking" program; the precise program that would be targeted by the legislation in Washington that Citigroup is lobbying to gut.

Robert Rubin of Citigroup says that "Fighting terrorism on a global scale must include a consistent and co-ordinated approach to stemming the flow of funds to terrorist organizations." Afghanistan is being bombed today for exactly what Citigroup Private Banking client Montesinos did: for giving refuge to Bin Laden's organization.

Meanwhile, Rubin's lobbyists, backed by all the economic and political power of Citigroup, the largest financial institution in the world, are working overtime to make sure that nothing - not even the lessons of September 11th - will be able to stop them from laundering the dirty money of terrorists like Montesinos and those he protected, again and again.

The impunity of White Collar Terrorism, reaping its profits from the U.S. policy of drug prohibition and the corrupt and selective enforcement by the government that protects it, guarantees that Bush's "war on terrorism" is already lost. "Very unpatriotic," comments Senator Grassley of the bankers' lobbying efforts.

Rubin and Citigroup, by placing everyone at future risk to ensure their future Private Banking profits, are very unpatriotic, indeed.

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