PROBLEM: MASSIVE SYSTEMIC AND ORGANIZED CORRUPTION BECOMING OBVIOUS.
REACTION: OH SHIT.
SOLUTION: ADMIT TO SOME OF IT AT MID-LEVEL (RULE OF LAW!!) AND TRY TO MOVE ON.
1. US report details money laundering
A suitcase containing $1 million in shrink-wrapped bills, hand-carried into New York by the former president of Gabon for his daughter to buy a Manhattan apartment. Purchases of a stretch Hummer H2 armored limousine and C-130 Hercules military transport planes for a civil war in Angola. And a shell company named Sweet Pink used to funnel millions of dollars into the United States from Equatorial Guinea.
These and other deals and money transfers took place in recent years because of inadequate controls on money laundering at large American banks and unregulated American lawyers, real estate agents and lobbyists, according to a Senate report released late Wednesday, Lynnley Browning reports in The New York Times.
The 325-page report by the Permanent Subcommittee on Investigations, which will conduct a hearing on Thursday, sheds new light on how banks like Citigroup, Wachovia and Bank of America unwittingly shifted hundreds of millions of dollars on behalf of African politicians, their relatives and associates.
…The report details how Teodoro Nguema Obiang, the son of Teodoro Obiang Nguema Mbasogo, the president of Equatorial Guinea, used lawyers, bankers, real estate agents and escrow agents, all Americans, from 2004 through 2008 to move more than $110 million into the United States, including $100 million through Wachovia and Citibank.
Mr. Obiang, the subject of a criminal investigation into charges of money laundering, bribery and extortion, also employed Sidley Austin Brown & Wood, a law firm now known as Sidley Austin, to help him buy a $38.5 million Gulfstream G-5 jet in 2005, the report says.
Janet Zagorin, a spokeswoman for the firm, did not return telephone calls seeking comment.
The report says two American lawyers, Michael Berger and George Nagler, helped Mr. Obiang circumvent controls at the banks by setting up accounts for shell companies with names like Beautiful Vision, Unlimited Horizon and Sweet Pink, named on honor of the rapper Eve, Mr. Obiang’s girlfriend at the time.
2. Atiku, of Nigeria, in money laundering scandal
Atiku Abubakar, Nigeria’s former Vice President, and his wife Jennifer Douglas, received and laundered over six billion naira in corruption money through several American banks, the United States Senate announced yesterday in Washington DC.
The revelation was contained in a 330-page report of the U.S. Senate’s permanent sub-committee on investigations, a part of the Homeland Securities and Intergovernmental Affairs Committee which investigated the use of offshore companies to bring what was called “dirty money” into the United States.
According to the report, in the eight years that Mr. Abubakar was vice president, “from 2000 to 2008, Mr. Abubakar and Ms. Douglas used a network of accounts at U.S. financial institutions to bring over $40 million in suspect funds into the United States, through multiple wire transfers supplied by offshore corporations located in Germany, Nigeria, Panama, the British Virgin Islands, and Switzerland.”
…A Munich court in 2007 found Siemens guilty of paying bribes to top Nigerian government officials in order to obtain four telecommunications projects, and fined the company $248million.
…The report detailed the profile of a totally clueless Ms. Douglas, cast merely as a money guzzling machine which had no notion of the sources and the health of the money she so enthusiastically helped to launder into the United States financial system.
“When her banks asked about these corporations, Ms. Douglas consistently told them that she was unfamiliar with the nature of the offshore corporations sending her money.”
When the banks became suspicious of her activities and decided to close her accounts, the former vice president’s wife simply closed the accounts and opened new ones in different banks, the committee found out. “Over time, as each financial institution began to ask questions about the offshore corporations sending her funds and decided to close her accounts, she opened new accounts at other financial institutions, at times with the assistance of her U.S. lawyer, Edward Weidenfeld.”
3. HSBC, BOA moved “suspect” Angola funds, study says
Feb. 4 (Bloomberg) — Bank of America Corp. didn’t raise enough questions about how an Angolan arms dealer now in prison moved millions of dollars in “suspect” funds to the U.S., says a Senate report on corrupt foreign money entering the country.
HSBC Holdings Plc also gave an Angolan bank, Banco Africano de Investimentos, “ready access to the U.S. financial system” during the past decade although the bank failed to identify all of its owners and couldn’t provide written anti-money-laundering policies, the report said. Angola, Africa’s second-largest oil producer after Nigeria, has a history of corruption.
The report described weaknesses in the U.S. anti-money- laundering system that requires banks to raise red flags when foreign officials and their relatives and associates move money. It analyzed how such “politically exposed persons,” or PEPs, from four oil-rich African nations circumvented safeguards. One was Pierre Falcone, the Angolan arms dealer now in prison in France.
…BAI resisted repeated attempts by HSBC in the past decade to determine the exact ownership structure of the bank, according to the report. In all, HSBC couldn’t determine the owner of 19.5 percent of BAI’s shares, according to the report.
“HSBC takes compliance matters very seriously,” said spokeswoman Juanita Gutierrez in an e-mailed statement. “HSBC’s record demonstrates a commitment to vigorous enforcement and continuous enhancement of anti-money-laundering policies and practices.”
HSBC also conducted a business venture with Falcone in Angola through their joint ownership from 1997 to 2004 of Triang Ltd., a trucking operation that transported fuel for the Angolan diamond industry, according to the report.
