The Komisar Scoop Reports & Analysis by Investigative Journalist Lucy Komisar

Tuesday, April 17, 2007

How Tax Cheats Are Using Your Money to Fund Politicians

Filed under: offshore,Politics,Scoops,tax evasion — Tags: — Lucy Komisar @ 9:43 am

By Lucy Komisar
AlterNet – April 17, 2007

When it comes to tax cheats, the government has beenSam Wyly vocal about catching the little guys but doesn’t spotlight the big-time frauds, like Swift Boat financier Sam Wyly, who happens to be a top-tier Republican contributor.

Every year, just before Tax Day, the Internal Revenue Service conducts a dog and pony show to demonstrate how it is cracking down on tax cheats.

Routinely, the IRS focuses on stories that involve crooked tax preparers and small-time taxpayers who try to erase a few hundred and occasionally even a few thousand dollars from their bills.

This year was no exception. At a press conference on April 3, IRS Commissioner Mark Everson announced civil injunction suits against five corporations in Atlanta, Detroit, Chicago and Raleigh that are franchises of Jackson-Hewitt, the nation’s second-largest tax preparation firm, which the IRS accused of routinely faking returns for some of its 100,000 clients.

Jackson-Hewitt is a quickie, low-fee operation. The IRS says stores accepted false W-2s and faked data to get clients the earned-income credit for the poor. The amount underpaid through returns prepared by 125 stores was estimated at $70 million.

While the story made national headlines, the government targeted an operation that catered to little guys, the poor and lower middle class. However, they failed to mention some big-time tax cheats whose fraud was much greater, but who happen to be top-tier Republican contributors. What the press conference should have announced was: “Swift Boat” financier Sam Wyly cheated the U.S. of at least $300 million in taxes.” And, “The money that paid for the “Swift Boat” campaign was your money!”

How does someone cheat the government out of that much money and — until now — get away with it?

Megabucks Sam didn’t pull into a mall with a Jackson-Hewitt franchise store. He had expensive help from his bankers and accountants. The scam is detailed in a report issued Aug. 1 by the Senate Subcommittee on Investigations, the result of a lengthy probe by the staff of Sen. Carl Levin, D-Mich.

Mark Everson at Aug 1 06 Senate hearing, photo by Lucy KomisarEverson knows about it because he testified at the hearing that presented the report.

Wyly did his cheating through an offshore scheme that hid $1 billion in profits via Isle of Man “shell companies” that existed only on paper, were registered under front men to hide the Wylys’ names, and were used to carry out transactions and launder money. And that’s only the hidden income that was found. The Dallas mogul, with a $1 billion admitted net worth, may be guilty of the biggest personal tax fraud in U.S. history.

Wyly used a system popular with megarich corporate executives. In 2000, Bank of America, the country’s second-largest commercial bank, began offering a tax shelter called STARS, which the IRS has ruled illegal. Among the happy clients were Wyly and his Michaels Stores logobrother Charles, who controlled the $5 billion Michaels Stores, the arts-and-crafts retailer with 900 shops.

The idea was to evade taxes by giving themselves stock options and transferring them to offshore corporations controlled by secret trusts in the Isle of Man, that famous British tax haven in the Irish Sea. “Manx” companies are routinely fakes; one of the front men on the boards of all the Wyly entities is a sheepherder, who picks up cash for use of his name.

U.S. law requires major stockholders to report their holdings to the Securities and Exchange Commission. Company officials from Michaels Stores admitted that the Wylys had transferred company securities to offshore trusts and subsidiaries, and that the company and the Wylys had not reported it.

Senate Report: The Wyly Offshore Structure

If you want to know how they did it, read the following paragraph. If your eyes glaze over, skip to the next.

Wyly Bulldog Trust: how the scam workedHow the scam works: A public company grants stock options to a top executive. The executive transfers the options to a trust or partnership controlled by his or her family. The transfer is called a “sale” and the trust “pays” for the options with a note due in 20 or 30 years. After the options are transferred, the trust exercises the option to buy stocks which it sells on the market. The executive plays out the fiction that tax is not owed until the deferred payment date, although in fact he controls the profit stashed offshore in a secret account where the IRS can’t find it.

Wyly dumped profits into two hedge funds in the offshore Cayman Islands and laundered that into an investment in an annuity in offshore Bermuda. The annuity was written by a Bermuda reinsurance company he set up himself and which had one client, Sam.

Senate Report: The Wyly Pass-Through Loans

He and brother Charles used some of the tax-evading profits for loans, homes and ranches (two ranches worth $54 million near Aspen, Colo.; condominiums worth $13 million in downtown Aspen; a 95-acre ranch worth $12 million near Dallas; and an oceanfront property worth $8 million in Malibu). He also bought jewelry and art (a Rockwell painting). (These excerpts from inside communications show how that worked.) Why did Bush’s IRS commissioner forget to mention Wyly? He might say it’s because the IRS is investigating the case but hasn’t taken definitive action.

However, there could be two other reasons. One is that Wyly was not only the financier of the Swift Boats fraud to discredit John Kerry during the 2004 presidential campaign, but the Wylys were Bush’s ninth greatest career contributors, “Bush Pioneers,” who collected $100,000 for the 2000 and 2004 presidential campaigns. (Your money.)

They also funded other leading Republicans. Sam Wyly, since 1997 has given Republicans more than $1 million and his brother Charles and wife have donated more than $1.3 million. Among the beneficiaries were William H. Frist, Wilbert J. Tauzin, Thomas Delay, John D. Ashcroft, Richard J. Santorum, John S. McCain, Mitch McConnell, Dick Armey, Elizabeth H. Dole, Christine Todd Whitman, Orrin G. Hatch, Phil Gramm, Alfonse M. D’Amato, Rudolph W. Giuliani and Arnold Schwarzenegger. They also funded the ironically named Good Government Fund, Freedom Works Pac and Straight Talk America.

But there’s another reason why the Bush administration doesn’t like highlighting Wyly-style tax cheating. The Wylys have a lot of company. Every major private banking department offers a product called the “private placement offshore of variable annuities.”

According to the IRS, business executives have used such shelters to evade taxes on $8 billion in income. Assume that means “at least.” And that’s just one swindle in the panoply of tax cheating which the IRS says contributes to the loss of $40 billion to $70 billion a year from individual use and $30 billion from corporate use of tax havens.

Compare $100 billion of offshore cheating to the $70 million headlined by Everson this month.

Those numbers are probably low: According to a Tax Justice Network report quoted by the Senate investigation and based on statistics from Merrill Lynch/Cap Gemini’s “World Wealth Report” and the Boston Consulting Group’s “Global Wealth Report,” 16.2 percent of the private wealth of North Americans, $1.6 trillion, is held offshore. The overwhelming reason for that is tax evasion.

The Wylys’ fraud tells us what we ought to be focusing on in order to stop the mega-tax cheats. Think “offshore” and “tax haven,” the parallel international financial system run by the world’s big banks. It is built on a network of more than 70 jurisdictions that in various combinations sell secret shell companies — fake paper fronts — and anonymous bank accounts.

Tax Havens map, by Ianiv Wainberg

The big time cheaters — individuals and corporations — who evade taxes in the millions don’t go to the mall, they go offshore. The multinational banks run the secret accounts and accept as legitimate the paper shells that “own” them and that serve the world’s crooks, terrorists, dictators, arms and drug traffickers — and tax cheats.

Banks such as Citibank set up shell companies themselves for clients’ convenience and sometimes have their own employees serve as front men, i.e., “directors.”

Everson indicated concern at the April press conference about “the increasing complexity associated with structured entities and transactions in the international arena and then the offshore area.”

But, at the same press conference, when Eileen O’Connor, assistant attorney general for the Tax Division, mentioned the nine-year prison term awarded tax cheat Walter Anderson, who started his fortune with Mid-Atlantic Telecom in Washington, D.C., she didn’t explain that he had evaded more than $200 million in taxes through schemes based in the offshore British Virgin Islands and Panama. The investigation started in the Clinton administration.

The Bush Administration from its first year, when Treasury Secretary Paul O’Neill torpedoed an OECD (Organization for Economic Cooperation and Development) attempt to crack down on tax havens, has shown itself a friend of the shadowy system.

Senator Carl LevinNow, Congress has a chance to act against the offshore tax-cheating Wylys of America. Carl Levin (shown here) and Norm Coleman, a Minnesota Republican who is savvy about the issue because he was a prosecutor, along with Barak Obama, have sponsored The Stop Tax Haven Abuse Act (S-681). It would:

* Presume that nonpublicly traded offshore corporations and trusts are controlled by the U.S. taxpayers who formed them or sent them assets, unless the taxpayer proves otherwise;

* Impose tougher requirements on U.S. taxpayers using offshore secrecy jurisdictions;

* Give Treasury authority to take special measures against foreign jurisdictions and financial institutions that impede U.S. tax enforcement;

* Require U.S. financial institutions that open accounts or entities in offshore secrecy jurisdictions for U.S. clients to report such actions to the IRS;

* Tax offshore trust income used to buy real estate, artwork and jewelry for U.S. persons, and treat as trust beneficiaries those persons who actually receive offshore trust assets;

* Increase the maximum fines on tax shelter promoters to 150 percent of their ill-gotten gains, and on corporate insiders who hide offshore stock holdings to $1 million per violation of U.S. securities laws;

* Prohibit U.S. patents for “inventions designed to minimize, avoid, defer, or otherwise affect liability for federal, state, local or foreign tax”; and

* Require hedge funds and company formation agents to establish know your customer and anti-money laundering programs like other U.S. financial institutions.

Most of those provisions could have blocked the Wylys’ Isle of Man tax evasion.

Levin said, “None of these offshore schemes would work without the secrecy that prevents U.S. agencies from enforcing our laws. Our bill offers innovative ways to combat offshore secrecy. We can’t let the offshore tax havens hide $100 billion in U.S. tax revenues which are needed to protect our troops, fund healthcare and education, and meet the other needs of American families.”

But Obama’s presidential candidacy website doesn’t mention the issue. Neither do those of Hillary Clinton, who hasn’t signed on to the bill, or John Edwards or Bill Richardson. If any of them have talked about offshore tax evasion in speeches, it hasn’t gotten coverage. Where do they stand on S-681?

For Democrats concerned about national health insurance and social welfare, blocking offshore tax evasion belongs at the top of the domestic agenda. Senate Finance Committee Chair Max Baucus ought to call hearings to move S-681 down the legislative track.

The next Democratic president needs to sign the bill. He or she also must get America’s G-8 partners to agree to end access by nontransparent financial centers to the world’s major banking systems.

Every year that doesn’t happen, billions of U.S. tax dollars are lost to the black hole of offshore bank secrecy. It’s your money!

Story on AlterNet Site

Sunday, April 15, 2007

“The Coast of Utopia” — Stoppard contemplates 19th century Russian radicals

Filed under: Theater — Lucy Komisar @ 9:16 am

Details of personal lives overwhelm epic of politics and action

By Lucy Komisar

Tom Stoppard’s theater trilogy about Russian radicals and reformers of the 19th century is a drawing room drama of upper class life overlaid with the revolutionary ideas that set the stage for the Russian revolution. The content is disappointing, a Russian history “lite” that seems to want to make viewers feel as if they are getting to know the shapers of history without being forced to concentrate too seriously or for too long on their actions and ideas.

Characters are placed and moved through stylized vignettes as if in a diorama, in tableaux. The pageants are beautiful, but sometime they lack substance. Often there are pronouncements instead of dialogue. And, unfortunately, just announcing events rather than showing them makes even exciting history lifeless.


At a costume ball, photo Paul Kolnik.

The best part of the production is the stunning staging by director Jack O’Brien. “Salvage” opens with the cooing of pigeons and the lapping of waves made real by sound and light. There’s little scenery: perhaps a dining table, the bed and table in someone’s room, a villa’s silvery chairs or, in summer, rattan, and a chandelier that seems to be an onion domed ice sculpture. All are set on a shiny round black marble stage. (The sets are by Bob Crowley and Scott Pask.) The clothes of the aristocracy lend fashionable elegance, especially at a Russian costume ball. (Costumes are by Catherine Zuber.)

The epic begins in 1833, on the estate of the family of Michael Bakunin, now known to the world as the originator of anarchism, and takes us through 35 years with the story of six friends, intellectual aristocrats, who sought to change the repressive Czarist regime. They are imbued with the ideas of cutting-edge European philosophers and writers – of Kant and Hegel and of novelist George Sand. During the next decade, many of them visit the estate of Alexander Herzen, a reformer who has inherited a fortune from his father. The story moves with them to Paris and the heady days of the Revolution of 1848, then to London and finally to Geneva. Meanwhile, Herzen founds “The Bell,” a broadsheet that is smuggled into Russia.

Hamilton, O’Byrne, Krohn, Photo Paul Kolnik

There is serious realism when two radicals tell Herzen about a writer jailed for a theater review that offended the czar. Or of the fear of living in a time when “somebody sitting next to you in class disappears for insulting the Czar’s portrait.”

But that’s not the stuff of the plot. In spite of purporting to present to us the ideas and history of the figures he depicts, underlined by publicity about how many history books he read in preparation, Stoppard appears fascinated primarily by the intimate lives of the famous. The views and actions of important historical figures such as Herzen (given a performance of sympathy and depth by Brian F. O’Byrne) and Bakunin (a larger-than-life Ethan Hawke) vie for attention with Herzen’s marital problems or Bakunin’s repeatedly borrowing money from friends and family. Drinking, unfaithfulness and personal tragedies are used to spice up the story, but after a while, what might be interesting detail overwhelms the significant narrative.

Ethaln Hawke, photo Paul Kolnik.

Ethan Hawke, photo Paul Kolnik.

The intellectuals themselves are often cartoonish, with comic opera shouting and posturing. Bakunin and literary critic Vissarion Belinsky (Bill Crudup) seem ridiculous clowns.

Bakunin prances in and out and declaims about life and art. He cavorts and runs and growls and screeches. He runs through philosophers like a new age devotee running through gurus, announcing with each new discovery, “Kant is the man,” or “Fichte is the man” or “Hegel is the man.” Later, he proclaims that, “The first task is to destroy authority; there is no second task.”

Belinsky says what he believes, no matter who it offends, but rather than showing him as a man of principle, Crudup portrays him as a bit of a jerk.

At a London Ball, photo Paul Kolnik.

At a London Ball, photo Paul Kolnik.

In chic Hampstead, in 1853, we see the Left at a ball, with Marx (Adam Dannheisser), Italian nationalist leader Giuseppe Mazzini (Brian Sgambati) and the other internationalists musing and dreaming of world revolution. Herzen dismisses what he calls the theater of political exiles. Stoppard must agree; the event itself is presented as vaudeville.

And what about the women? Amy Irving, Jennifer Ehle, and Martha Plimpton in multiple roles, especially Irving as Maria Ogarev, estranged wife of Herzen’s hard-drinking friend Nicholas; Ehle as Herzen’s wife Natalie and then as his children’s governess; and Martha Plimpton as Natalie’s friend, the intense Natasha Tuchkov, offer excellent portrayals as the action turns to revolve around them.

Ehle, Harbour, Plimpton, photo Paul Kolnik.

Ehle, Harbour, Plimpton, photo Paul Kolnik.

They play a major role, but not for the reasons one might expect in a political play. The female characters are mostly reasonably bright women who spend their free moments thinking about husbands. Bakunin argues for the education of women and for love matches. Did none of the women in that radical milieu ever challenge women’s role? Even the one woman who attends political meetings seems more interested in men than ideas.

Is this an attempt at a Shavian combination of politics and manners? Or perhaps Stoppard wants to show that the men’s inability to organize a political movement is mirrored by the messiness of their personal lives and betrayals. At any rate, “Fiddler on the Roof” makes more of a feminist statement about the role of women in Russia.

The trilogy is overloaded with trivia. Herzen argues about paying for the Polish opposition. Marx won’t share a platform with him at the 1848 anniversary at St Martin’s Hall. Herzen begins in measured tones about the need for change, even revolution. Then in the second play he is consumed with his wife. Not to dismiss his own family’s importance to Herzen, but that’s not why he interests the rest of us.

While the “revolutionaries” are prancing around declaiming about life, illusion and art and how they will save the downtrodden, behind a gauzy curtain we see lines of people immobile, dressed in sepia shrouds, like spirits. The serfs remain a silent backdrop. Perhaps Stoppard’s most telling point is that the radical elite describes properties not in hectares or acres but in the number of “souls” who work the land. The naïveté of the aristo-intellectuals is their apparent surprise that when 50 million serfs are freed without sources of livelihood, there are riots on estates when they are charged rent.

Stoppard’s trilogy gives us a thin taste of Russian radical history and philosophy. Still, in an era when American theater is dominated by revivals, even an imperfect new Stoppard work is welcome.

The Coast of Utopia: Voyage.” Written by Tom Stoppard. Directed by Jack O’Brien. Vivian Beaumont Theater, 150 W. 65 St. Running time 2:40. Through May 13, 2007. 212-239-6200.

Tuesday, April 10, 2007

Citigroup’s Charles Prince: “Let’s go back to the bad old days.”

Filed under: Banks,Blog,Citigroup,offshore,tax evasion — Tags: , — Lucy Komisar @ 12:39 pm

By Lucy Komisar
April 10, 2007

The New York Times reports today that Charles Prince, CEO of Citigroup, is planning to cut the corporation’s compliance staff. Reporter Eric Dash says it’s “to keep the bank from getting bogged down” because “the compliance overhang has made it difficult to be competitive” and “unnecessarily slowed the company down.”Citigroup logo

Translation: the other banks are laundering profits or running scams that help their clients cheat tax authorities and investors, and they make good money at it. Why shouldn’t we do so without running the risk of internal whistleblowers?

Dash noted that Citigroup had been “beefing up its compliance staff after several scandals. Citigroup, like other banks, was tarred by its dealings with Enron and WorldCom and by investigations into analysts’ conflicts during the Internet boom.”

The NY Times has apparently forgotten that “tarred by its dealings” really means that Citigroup set up offshore shell companies that helped Enron cook the books. Citing details is so messy.

The use of shell companies to disguise financial operations was –is — standard for Citigroup. In the Enron case, Citigroup’s lawyers, Milbank Tweed, worked with the Cayman Islands agent Maples and Calder to set up the shell company, Delta Corp, in 1993 to do commodity swap transactions that involved “prepays” that were fake loans. No commodities ever changed hands between Enron and Delta.

Delta was owned by another shell, a so-called charitable trust, Grand Cayman Commodities Corporation. Testifying at a hearing organized by Sen. Carl Levin (shown here), Sen. Carl LevinCitigroup official Richard Caplan, explained, “Citibank forms special purpose entities to do lots of structure finance transactions, much as other institutions in the market form special purpose entities.” He said, “We do this all the time. This is standard operating procedure in the structured finance industry.”

Levin asked, “You’re forming an entity. The operations of that entity are hidden. There’s linkage between the transactions. Why are you forming this kind of entity in the Cayman Islands, a secrecy jurisdiction? Why do you hesitate to say that you’ll give us authority to try to pierce that secrecy to find out who owns that trust which holds the stock in Delta? That’s troubling, and I want to know your answers. Why do you do this in secrecy jurisdictions? Why not open, do it in daylight?”

Caplan replied, “I think if you would examine other special purpose entities used by Citibank and other banks and other corporations in receivables financings or mortgage financings, you will find that they have very similar characteristics to Delta.”

Enron proposed to Citigroup to have its brokerage arm, Salomon Smith Barney, sell its debt to public investors. That was done through still another shell company called Yosemite, a Delaware business trust, which sold notes, for which the underlining structured financing was a phony prepay. Enron made it clear to Citigroup it did not wish any explanation of the assets of the trust to investors or rating agencies. And Citigroup complied. They laid off $2.4 billion, and Enron used the proceeds to repay Citigroup.

The deals by Citigroup enabled Enron to keep $4.8 billion of debt from 14 transactions with Citigroup off its balance sheet for six years.

And Citigroup made nice commissions. Can’t you see why having too many compliance officers around to sniff out such scams is so unnecessary? And as Richard Caplan might confirm, so “uncompetitive.”

More about Citigroup

Wednesday, April 4, 2007

Questions Linger About Bushes and BCCI

Filed under: Crime & Corruption,Fraud,Scoops — Tags: , — Lucy Komisar @ 4:54 pm

Analysis by Lucy Komisar

Inter Press Service (IPS) – April 4, 2007

Now that the U.S. Congress is investigating the truth of President George W. Bush’s statements about the Iraq war, they might look into one of his most startling assertions: that there was a link between Saddam Hussein and Osama bin Laden.

Critics dismissed that as an invention. They were wrong. There was a link, but not the one Bush was selling. The link between Hussein and Bin Laden was their banker, BCCI. But the link went beyond the dictator and the jihadist — it passed through Saudi Arabia and stretched all the way to George W. Bush and his father.

BCCI logo on buildingBCCI was the Bank of Credit and Commerce International, a dirty offshore bank that then-president Ronald Reagan’s Central Intelligence Agency used to run guns to Hussein, finance Osama bin Laden, move money in the illegal Iran-Contra operation and carry out other “agency” black ops. The Bushes also benefited privately; one of the bank’s largest Saudi investors helped bail out George W. Bush’s troubled oil investments.

BCCI was founded in 1972 by a Pakistani banker, Agha Hasan Abedi, with the support of Sheik Zayed bin Sultan al Nahyan, ruler of Abu Dhabi and head of the United Arab Emirates. Its corporate strategy was money laundering. It became the banker for drug and arms traffickers, corrupt officials, financial fraudsters, dictators and terrorists.

The CIA used BCCI Islamabad and other branches in Pakistan to funnel some of the two billion dollars that Washington sent to Osama bin Laden’s Mujahadeen Osama bin Ladento help fight the Soviets in Afghanistan. It moved the cash the Pakistani military and government officials skimmed from U.S. aid to the Mujahadeen. It also moved money as required by the Saudi intelligence services.

The BCCI operation gave Osama bin Laden an education in offshore black finance that he would put to use when he organised the jihad against the United States. He would move money through the Al-Taqwa Bank, operating in offshore Nassau and Switzerland with two Osama siblings as shareholders.

At the same time, BCCI helped Saddam Hussein, funneling millions of dollars to the Atlanta branch of the Italian government-owned Banca Nazionale del Lavoro (BNL), Baghdad’s U.S. banker, so that from 1985 to 1989 it could make four billion dollars in secret loans to Iraq to help it buy arms.

U.S. Congressman Henry Gonzalez held a hearing on BNL in 1992 during which he quotedCIA logo from a confidential CIA document that said the agency had long been aware that the bank’s headquarters was involved in the U.S. branch’s Iraqi loans.

Kickbacks from 15 percent commissions on BNL-sponsored loans were channeled into bank accounts held for Iraqi leaders via BCCI offices in the Caymans as well as in offshore Luxembourg and Switzerland. BNL was a client of Kissinger Associates, and Henry Kissinger was on the bank’s international advisory board, along with Brent Scowcroft, who would become George Bush Sr.’s national security advisor. That connection makes the Bush administration’s surprise and indignation at “oil for food” payoffs in Iraq seem disingenuous.

Important Saudis were influential in the bank. Sheik Kamal Adham, brother-in-law of the late Saudi King Faisal, head of Saudi intelligence from 1963 to 1979, and the CIA’s liaison in the area, became one of BCCI’s largest shareholders. George Bush Sr. knew Adham from his time running the CIA in 1975.

Another investor was Prince Turki bin Faisal al-Saud, who succeededKhalid bin Mahfouz Adham as Saudi intelligence chief. The family of Khalid Salem bin Mahfouz, owner of the National Commercial Bank, the largest bank in Saudi Arabia, banker to King Fahd and other members of the ruling family, bought 20 to 30 percent of the stock for nearly one billion dollars. Bin Mahfouz (shown here) was put on the board of directors.

The Arabs’ interest in the bank was more than financial. A classified CIA memo on BCCI in the mid-1980s said that “its principal shareholders are among the power elite of the Middle East, including the rulers of Dubai and the United Arab Emirates, and several influential Saudi Arabians. They are less interested in profitability than in promoting the Muslim cause.”

The Bushes’ private links to the bank passed to Bin Mahfouz through Texas businessman James R. Bath, who invested money in the United States on behalf of the Saudi. In 1976, when Bush was the head of the CIA, the agency sold some of the planes of Air America, a secret “proprietary” airline it used during the Vietnam War, to Skyway, a company owned by Bath and Bin Mahfouz. Bath then helped finance George W. Bush’s oil company, Arbusto Energy Inc., in 1979 and 1980.

When Harken Energy Corp., which had absorbed Arbusto (by then merged with Spectrum 7 Energy), got into financial trouble in 1987, Jackson Stephens of the powerful, politically-connected Arkansas investment firm helped it secure 25 million dollars in financing from the Union Bank of Switzerland. As part of that deal, a place on the board Harken Energy Corporation logowas given to Harken shareholder Sheik Abdullah Taha Bakhsh, whose chief banker was BCCI shareholder Bin Mahfouz.

Then, in 1988, George Bush Sr. was elected president. Harken benefited by getting some new investors, including Salem bin Laden, Osama bin Laden’s half-brother, and Khalid bin Mahfouz. Osama bin Laden himself was busy elsewhere at the time — organising al Qaeda.

The money BCCI stole before it was shut down in 1991 — somewhere between 9.5 billion and 15 billion dollars — made its 20-year heist the biggest bank fraud in history. Most of it was never recovered. International banks’ complicity in the offshore secrecy system effectively covered up the money trail.

But in the years after the collapse of BCCI, Khalid bin Mahfouz was still flush with cash. In 1992, he established the Muwafaq (“blessed relief”) Foundation in the offshore Channel Islands. The U.S. Treasury Department called it “an al Qaeda front that receives funding from wealthy Saudi businessmen.”

When the BCCI scandal began to break in the late 1980s, the Sr. Bush administration did what it could to sit on it. The Justice Department went after the culprits — was virtually forced to — only after New York District Attorney Robert Morgenthau did. But evidence about BCCI’s broader links exist in numerous U.S. and international investigations. Now could be a good time to take another look at the BCCI-Osama-Saddam-Saudi-Bush connection.

*Investigative journalist Lucy Komisar’s chapter, “The BCCI Game: Banking on America, Banking on Jihad,” appears in the new book “A Game as Old as Empire”, just published by Berrett-Koehler (San Francisco).

Article on IPS site

Osama y Saddam, parientes incómodos de Bush

Filed under: arms trade,offshore,Scoops,Spanish — Tags: , — Lucy Komisar @ 2:29 pm

Por Lucy Komisar

Servicio Inter Press (IPS), 4 de abril 2007

Los legisladores de Estados Unidos que investigan la veracidad de los argumentos del presidente George W. Bush para invadir Iraq deberían analizar una de sus afirmaciones más resonantes: la del vínculo entre Saddam Hussein y Osama bin Laden.

Los críticos de Bush desacreditaron tal aseveración, a la que calificaron de invención. Estaban equivocados. El vínculo existía, pero no era el que el presidente le vendió al público.

El punto de contacto entre el hoy ejecutado dictador de Iraq y el hoy prófugo líder terrorista era el Banco de Crédito y Comercio Internacional (BCCI), cuyas vinculaciones atravesaban toda Arabia Saudita y llegaban hasta el propio presidente Bush y su padre, el ex mandatario George Bush (1989-1993).

A BCCI building

A BCCI building

El BCCI era un banco off-shore usado por la Agencia Central de Inteligencia (CIA) estadounidense durante el gobierno de Ronald Reagan (1981-1989) para enviar armas a Saddam Hussein, financiar la guerrilla de Bin Laden en Afganistán y transferir dinero a la operación ilegal Irán-Contras, entre otras tareas encubiertas.

Los Bush también obtuvieron beneficios privados por sus contactos con el BCCI: uno de los principales socios sauditas del banco aceitó en los años 80 las problemáticas inversiones petroleras del actual presidente.

El BCCI fue fundado en 1972 por el banquero pakistaní Agha Hasan Abedi, con el apoyo del jeque Zayed bin Sultan al Nahyan, soberano de Abu Dhabi y presidente de Emiratos Árabes Unidos.

El lavado de dinero fue clave en su estrategia corporativa. Se convirtió así en el banco de los traficantes de drogas y armas, de los funcionarios gubernamentales corruptos, de los protagonistas de grandes fraudes financieros, de los dictadores y de los terroristas.

La CIA usó las sucursales del BCCI en Pakistán para canalizar Osama bin Ladenparte de los 2.000 millones de dólares que Washington envió a los mujaidines (combatientes islámicos) de Bin Laden que luchaban contra los invasores de la Unión Soviética en Afganistán.

También entregó a militares y funcionarios pakistaníes su comisión por la entrega del dinero que Estados Unidos transfería a los mujaidines, y realizaba movimientos financieros requeridos por los servicios de inteligencia sauditas.

Las operaciones del BCCI dieron a Bin Laden una lección sobre actividades financieras encubiertas que pondría en práctica cuando organizó la jihad (guerra santa) contra Estados Unidos. En el futuro, canalizaría el dinero a través del Banco Al-Taqwa, que operaba en Nassau y contaba con dos hermanos del líder terrorista como accionistas.

El BCCI ayudó a Saddam Hussein a enviar millones de dólares a la sucursal en Atlanta de la estatal Banca Nazionale del Lavoro (BNL), de Italia. Fue así que entre 1985 y 1989 Iraq pudo obtener 4.000 millones de dólares en préstamos secretos para la compra de armas.

En 1992, la CIA ya sabía desde hacía mucho tiempo que la BNLCIA logo prestaba dinero a Iraq, según un memorando confidencial de la agencia citado entonces por el legislador estadounidense Henry Gonzalez en un audiencia del Congreso para considerar la situación de la institución financiera italiana.

Sobornos de 15 por ciento a esos préstamos fueron transferidos por la BNL a cuentas de funcionarios iraquíes a través de oficinas del BCCI en Islas Caimán, Luxemburgo y Suiza.

La BNL era cliente de Kissinger Associates, y el ex secretario de Estado (canciller) estadounidense Henry Kissinger era miembro de la junta asesora internacional del banco, junto con Brent Scowcroft, quien luego sería consejero de Seguridad Nacional del presidente George Bush padre.

Esa conexión deja dudas evidentes sobre la sinceridad de la sorpresa e indignación que manifestó el gobierno de Bush hijo ante los casos de corrupción en torno del programa humanitario Petróleo por Alimentos, implementado por la Organización de las Naciones Unidas para Iraq.

Importantes figuras sauditas tenían gran influencia en el BCCI. Un cuñado del fallecido rey Faisal, jefe de la inteligencia del país árabe entre 1963 y 1979 y enlace de la CIA en el golfo Pérsico o Arábigo, el jeque Kamal Adham, se convirtió luego en uno de los principales accionistas del banco.

Bush padre conocía a Adham desde su designación al frente de la CIA, en 1975.

Otro inversor del BCCI fue el príncipe Turki bin Faisal al-Saud, quien sucedió a Adham como jefe de la inteligencia saudita.

Entre 20 y Khalid bin Mahfouz30 por ciento de las acciones del BCCI fueron compradas a un costo de casi 1.000 millones de dólares por la familia de Khalid Salem bin Mahfouz, banquero del rey Fahd y otros miembros de la familia real y propietario del Banco Nacional de Comercio, el principal de Arabia Saudita. Bin Mahfouz ingresó así en la junta del BCCI.

El interés de varios gobiernos árabes en el banco era más que financiero, según la CIA.

Un memorando secreto de la agencia lo explicaba así a mediados de los años 80: “Sus principales accionistas integran la elite del poder en Medio Oriente, incluidos los gobernantes de Dubai y de todo Emiratos Árabes Unidos, y varios influyentes sauditas. Ellos están menos interesados en el lucro que en la promoción de la causa musulmana.”

Los vínculos privados de los Bush con el banco llegaban a Bin Mahfouz a través del empresario texano James R. Bath, quien representó a capitales sauditas en sus inversiones en Estados Unidos.

En 1976, cuando Bush padre era aún jefe de la CIA, la agencia vendió algunos aviones de Air America, aerolínea de fachada que usaba durante la guerra de Vietnam, a Skyway, compañía propiedad de Bath y Bin Mahfouz.

Luego, en 1979 y 1980, Bath ayudó a financiar la compañía petrolera de Bush hijo, Arbusto Energy Inc.

Arbusto fue absorbida luego por Spectrum 7 Energy y ésta, a su vez, por Harken Energy Corp., Harken Energy Corp. logoque en 1987 pasó por dificultades financieras y obtuvo 25 millones de dólares de la Unión de Bancos Suizos. Como parte del acuerdo, el jeque Abdullah Taha Bakhsh, cuyo principal financista era Bin Mahfouz, obtuvo un lugar en la junta de Harken.

Bush padre asumió la presidencia en 1988, y Harken consiguió nuevos accionistas, entre ellos el medio hermano de Osama bin Laden, Salem bin Laden, y Khalid bin Mahfouz. Por esos tiempos, Osama bin Laden estaba ocupado organizando Al Qaeda.

El robo de entre 9.500 millones y 15.000 millones por parte del BCCI antes de ser clausurado en 1991 es el principal fraude bancario en 20 años. La mayor parte de esos fondos nunca fueron recuperados. La complicidad de la banca offshore internacional permitió ocultar el rastro de ese dinero.

Pero en los años siguientes al colapso del BCCI, Khalid bin Mahfouz aún disfrutaba de una inmensa riqueza. En 1992, fundó la Fundación Muwafaq (“alivio bendito”), con sede en el paraíso fiscal de Islas Anglonormandas, dependencia de la corona británica en el canal de la Mancha.

El Departamento del Tesoro (ministerio de hacienda) estadounidense calificó a la fundación de “fachada de Al Qaeda que recibe financiamiento de ricos empresarios sauditas”.

Cuando comenzó a estallar el escándalo del BCCI a fines de los años 80, el gobierno de Bush padre hizo lo que pudo para taparlo. El Departamento de Justicia (fiscalía general) fue virtualmente obligado a acusar a los responsables sólo después de que lo hizo el fiscal de distrito de Nueva York, Robert Morgenthau.

Pero la evidencia sobre los vínculos más intrincados del BCCI consta en numerosas investigaciones estadounidenses e internacionales. Este sería un buen momento para echar otro vistazo a la conexión BCCI-Osama-Saddam-sauditas-Bush.

Artículo en IPS

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