Move Seen to Press Banks to Deal With Embassies

[Snazzy]

Move Seen to Press Banks to Deal With Embassies
By TIMOTHY L. O'BRIEN

Published: June 9, 2004


The State Department is pressing federal bank regulators to address the inability of some foreign embassies to find banking services in the United States, according to several people briefed on the matter.

An investigation into suspicious transactions in embassy accounts at the Riggs National Corporation has made banks wary of engaging in such business.

While several countries are having difficulty finding a bank as Riggs shuts down a large portion of its embassy business, the State Department's move was primarily driven by the needs of Saudi Arabia, an American ally whose embassy accounts are at the center of the Riggs investigation, these people said. The investigation is focusing on accounts that may have been used to launder money or finance terrorist activities.

"The State Department is very concerned that the Saudis cannot find a bank," said one senior regulatory official, who spoke on the condition of anonymity.

....

http://www.nytimes.com/2004/06/09/business/09bank.html

[Eloriel]

1. Oh, that is funny

Hilarious, in fact.

[Eloriel]

2. Oh, that is funny

Hilarious, in fact.

[struggle4progress]

3. How can the Saudis possibly pay off terrorists ...

if they don't have access to a bank?

[Snazzy]

4. After Riggs, Embassy Accounts Can't Find a Home

After Riggs, Embassy Accounts Can't Find a Home

By Nora Boustany and Terence O'Hara
Washington Post Staff Writers
Thursday, June 10, 2004; Page E01

Inside safety deposit boxes at Riggs Bank is more than $710 million in cashier's checks that Riggs doesn't want. Neither does any other bank.

The stash, once in checking accounts held by the embassies of Saudi Arabia and Equatorial Guinea, is likely to grow. After being fined $25 million for violating anti-money-laundering laws in its embassy banking division, Riggs has asked more than 100 embassy clients to find other banking arrangements by mid-July, according to sources familiar with the matter who spoke on condition they not be identified.

But the business, in the words of one area banker who has refused to accept it, is proving "toxic." The embassy of Saudi Arabia, a key focus of the regulatory probes at Riggs, and a number of African and South American countries are having so much trouble finding a new bank that the State Department has asked banking regulators to step in.

....

http://www.washingtonpost.com/wp-dyn/articles/A29674-2004Jun9.html

(I like how they call moneylaundering.com a "trade journal).

[Snazzy]

5. More fallout

(keeping Riggs bank scandal stuff together here)

Treasury IG Vs. OCC Over 'Obstructions'

American Banker Friday, June 11, 2004

By Michele Heller

WASHINGTON - The Office of the Comptroller of the Currency is under fire again - this time by the Treasury Department Office of Inspector General.

The IG's office is complaining that the banking agency has hampered its ability to investigate national banks accused of criminal activities, according to documents sent to Congress.

"The Department of the Treasury Office of Inspector General will conduct investigations of matters involving possible obstructions or corruptions of the bank oversight and examination responsibilities of the Office of the Comptroller of the Currency," then-Treasury Inspector General Jeffrey Rush Jr. wrote in a March 30 letter to eight congressional committees, including the Senate Banking, Senate Governmental Affairs, and House Financial Services panels. Mr. Rush retired in April.

...

According to the letters and other documents obtained by American Banker, OCC employees, including Deputy Chief Counsel Daniel Stipano, thwarted the inspector general's investigators who were brought into bank fraud cases by the Federal Bureau of Investigation or the Justice Department. This began late last year, and the IG formally complained to Comptroller John D. Hawke Jr. in mid-March, and then Congress later that month.

"On March 9, members of my office of investigations met with Brian McCormally, OCC's director of enforcement, to request access to OCC records and assistance with our inquiry in connection with the Guaranty National Bank in Tallahassee, Florida," Mr. Rush wrote in a March 18 memo to Mr. Hawke. "I am informed that Mr. McCormally not only refused our request for information, but also questioned the authority of my office."

....

http://www.americanbanker.com/article.html?id=20040610WP7ZGAVD&from=Home

Sounds like OCC not only protected Saudis for 7 years (even after 9/11), but were also protecting a predatory lender (now failed) in Tallahassee.

So, reviewing, we're up to three Florida banking operations that OCC let slide (BAC, Riggs International, Guaranty National).

[seemslikeadream]

6. Snazz have you seen the name John Bush

anywhere in these articles? My you'd think that would be news wouldn't you? The president's uncle's bank laundering money for terrorists.

[Snazzy]

8. It's going to be Jeb too

The money laundering nexus is Florida naturally. Need to find out if and how under Jeb regulations changed there, and what's the BFEE connection to the regulators who are ignoring the whole thing.

And you're right, Jonathan Bush is staying remarkably out of the picture, even though the fine for Riggs had at least something to do with Riggs doing foreign banking (Edge Act) while also doing investments. I'm not expert in this, but the idea is somehow to prevent foreign banks from influencing our market--a firewall. So banks like Riggs International are not supposed to also be investment houses. When Riggs National (the DC parent bank) bought J Bush & Co., they entered a gray area. Part of the reason for the OCC fine beyond just money laundering for terrorists and brutal dictators.

One cool thing about this, it's actually the Patriot Act that is swimming up and bitting BFEE on the ass.

[seemslikeadream]

7. dupe