Bloodsuckers in a Castle Called Citigroup




Sightings from The Catbird Seat

~ o ~

October 3, 2006


CITI Group Al Qaeda Headquarters

The Bush Crime Family Terrorist Bank

By Stewart Webb, Federal Whistleblower

From The Denver Post

The Bush Millman Clinton Lansky Jewish Mob Connections: The Deceased Bush Crime Family Denver Boss Hog, Leonard Yale Millman, was a partner of Meyer Lansky.

Recently obtained evidence indicates the relationship between Millman and Lansky was deeply intertwined for years involving Narcotics Money Laundering, and other illegal activities. Lansky was known to be the head of the MISPUKA-JEWISH MAFIA operating inside the United States. Elaine Millman the New Boss Hogs recently stated the Mossad cleaned me out and shook me down – this is far from the truth.

Elaine Millman still controls $3.5 Trillion Dollars according to the latest accounting.

Senator Hillary Clinton

It is known that Senator Hillary Clinton whose real name is Hillary Rodenhurst Clinton of New York has been acting as a Mossad Bush Crime Family stooge for years.

Iran Contra Operation Eagle

Hillary was involved in Narcotics Money Laundering with George H. W. Bush, Leonard Millman, Ollie North, M&L Business Machines Company of Denver a Millman Cut-out front company that Bankrupted in 1991, involving the Iran Contra Narcotics for Weapons Operations code name Eagle.

Narcotics for Weapons Operation Black Eagle

When Congress outlawed Operation Eagle under the Bolin Act, George H. W. Bush setup Operation Black Eagle, to intentionally hide the Narcotics for Weapons operations from Government Officials and investigators – these illegal operations continue today.

Hillary Clinton laundered Billions in Narcotics Money through M&L Business Machines of Denver, Silverado Savings and Loan of Denver, then the money went oversea to cleans the money, through John Dick in the Isle of Man and the Isle of Jersey to The Compodium Trust Company, (Dick a Denver Resident was a Millman Front) then back under the disguise of Foreign Trusts through Jackson Stephens of Little Rock, Arkansas and the Rose Law Firm where Hillary Clinton was a partner. Then Hillary’s money flowed through Morgan Stanley under the name MIApollo Investments Ltd.

The 21 pages of Top Secret Documents proving the $3.6 Billion in Narcotics Money laundering can be found on under US Intel Breaking News.

Denver Attorneys Norman Brownstein, Steve Hoth, Allen Karsh

Many of those Narco-Trusts are now under the Control of Norman Brownstein, Steve Hoth and Allen Karsh, all Denver Colorado Attorneys.

White House Aid Vince Foster

White House Aid Vince Foster a Rose Law Firm Partner was murdered by the Clinton’s after it was learned by Bill & Hillary Clinton and Bushes that Vince Foster was working with Defense Intelligence Officer/ Counter Intelligence Leo Wanta who was involved in a Sting Operation of Fugitive Mossad Agent Mark Rich. Vice President Albert Gore Jr., DIA Leo Wanta, General Vernon Walters and others good guys had compromised Vince Foster who turned States evidence and informant in order to arrest Mark Rich, and bring to Justice The Clintons, Bushes and others involving Iran Contra and other espionage activities against The United States.

Foster was killed after Clinton’s learned of this operation. Foster was last seen in the White House having sex with both Clinton’s. A yellow pick up truck bearing the Arkansas license number RCG-702 belonging to Hensel-Phelps Construction Company of Little Rock with Headquarters in Greeley Colorado carried Foster’s body out of the White House in a Rug and Vince Foster’s body was dumped in a park. Helsel Phelps was controlled by Phil Winn, an MDC Director’s brother, and the Mossad.

Hensel Phelps Construction Company A Major Contractor at
Denver International Airport

Hensel Phelps committed massive frauds on Government contracts involving the Airport Construction. Example: Was the $200 million dollar baggage system that did not operate and had to be replaced. Many scams and frauds were done by Hensel Phelps in the Denver Airport Construction.

Leonard Millman and Elaine Millman Organized
Crime Figures and 9-11 WTC

This now not only connected Leonard Millman and his widow Elaine R. Millman who lives at 3333 E. Cherry Creek Drive #70 Denver, Colorado as Organized Crime Figures, Bush Crime Family Boss Hogs Laundering Narcotics Money, but other scandals including Savings & Loan, HUD, Denver International Airport, Securities, Oil & Gas, Government Contract Frauds, Iran Contra and most of the scandals from 1970-2005 including the Latest $10 Billion dollar Pension Fund Frauds.

But this new evidence directly ties Millman’s to the MISPUKA-JEWISH MAFIA, including the financing of the Al Qaeda Terrorist Network involving the Attack on September 11, 2001….

This new evidence ties Bushes, Millman‘s, Clinton‘s, CIA, FBI Division 5 Ted L. Gunderson, DEA, U.S. Customs, U.S. Military, MISPUKA, JEWISH MAFIA, The Queen of England all in Bed Together.

Allen Karsh

Denver Attorney Allen Karsh brother of Organized Crime Figure Elaine Millman, has repeatedly claimed he is the MISPUKA, JEWISH MAFIA. Allen Karsh has repeated this to many in Denver, including Prostitutes in Denver who have provided Allen Karsh sexual services for payment (Prostitution). Allen was divorced from Mary Ann Karsh a wannabe psychologist & Denver gadfly, they had one son. Allen Karsh one of the Mafia attorneys and brother-in-law of deceased Leonard Millman and now runs the daily Crime Family Operations with Boss Hog Elaine Millman.

Allen Karsh has been a major Narcotics Importer into the United States of America for Years, under Karsh Investments at 950 S. Cherry Street, Denver Colorado. Allen Karsh imports narcotics from Mexico to Denver, Colorado each week with Narcotics packed in the seafood, put on ice to cover up the heat from US satellites.

Karsh has a US Customs agent on his payroll that buys off, OKs the loads during inspections, then the Narcotics is sent to Peter Brophy’s Restaurant in Boulder, Colorado for redistribution to various Strip-Bars in Denver, Shot Gun Willies, Proof of the Pudding, and others owned by Leonard Millman, Larry Mizel, Norman Brownstein and Bobby Rifkin.

HUD Fraudsters Phil Winn and Allen Karsh

Karsh also was involved in looting the US Government in the HUD, Department of Housing & Urban Development Scandal of 1989 with The Winn Groups of Denver. Former Switzerland Ambassador 1988-1989 Phil Winn, the former FHA Commissioner from 1981-1982 was convicted and to be sentenced and never served a day in jail after pleading guilty in the HUD Scandal.

In The United States District Court For The District Of Colorado Judge Sherman Finesilver never completed the sentencing of Phil Winn. Sherman Finesilver had been involved in Obstruction of Justice for Leonard Millman and Larry Mizel over many National Scandals. Judge Sherman Finesilver’s son was disbarred as an attorney after being caught as a Narcotics Dealer.

Finesilver’s son and Neil Bush, George W. Bush’s brother were in the Narcotics Business together involving Sun Flow Energy Company. Bill Clinton gave Philip D. Winn a Presidential Pardon. Allen Karsh’s involvement, using Haggaman & Karsh, Karsh & Haggaman, Karsh and Lottner as attorneys of record in the HUD Frauds was never really investigated and covered-up. The Winn Group stole hundreds of Billions from HUD.

AIMCO: The United States Largest Apartment Landlord

Those stolen properties are now under the umbrella of AIMCO a Real Estate Investment Trust (REIT) with over 500,000 apartments in the United States all stolen from HUD.

Asset Investors: a MDC subsidiary company

Phil Winn a Director of Asset investors Colorado’s largest financial institution is an M.D.C. Holding, Inc. subsidiary controlled by Leonard Millman and being run by Larry Mizel, at 3600 S. Yosemite, Denver, Colorado. Allen Karsh and Steve Hoth of the Norman Brownstein Law Office of Denver are in control of the late Leonard Millman Estate. Norman Brownstein is an attorney of record who represents Millman’s companies including MDC Holdings, Inc., CITI Group, AIMCO and many other Illegally gained assets.

CITI Group Al Qaeda Headquarters

MDC Holdings, Inc. owned Silverado Savings and Loan where Neil Bush, George W. Bush’s brother was a director. Norman Brownstein also represents Millman’s, Banks including CITI Corp, also known as CITI Group who was deeply involved with the financing of Terrorist Cells in the United States and paid those involved in the 9-11 WTC, World Trade Center Attack on America. CITI Group is now being called Al Qaeda Headquarters. This is Treason against America, and indictments should immediately be brought.

AIG American Insurance General

Millman’s were further tied to AIG; Millman’s were involved with massive frauds and money laundering with AIG and Carl Lindner. Lindner who operated the Chiquita Bananas United Fruit Company ran the Costa Rico Narcotics for Weapons Operations with John Hall and General John Singlaub during the 1980s-1990s.

American Insurance General and CITI Group-CITI Bank

American Insurance General who received 12 subpoenas from New York Attorney General Elliot Spitzer, in connections to the 9-11 WTC financial accounts tied to CITI Group. Marty Greenberg who resigned as CEO of AIG the day the subpoenas were issued worked for Millman’s cut out front company Meyer Blinder, the Worlds Largest Penny Stock Brokerage that collapsed in 1990-1991. MDC Holdings, Inc., operated National Brokerage Group of Companies in the 1980s where Maurice Greenberg was deeply involved with Iran Contra activities, money laundering, stock frauds and manipulations.

Maurice Greenberg, Pete Peterson, Leonard Millman and The CFR

Maurice Greenberg also known as Marty Greenberg took the fifth amendment a few days ago when asked about the 9-11 World Trade Center financing of the Al Qaeda Terrorists. Maurice Greenberg also is a Director of the CAR, Council of Foreign Relations, a New World Order Terrorist think tank, were Leonard Yale Millman was an Honorary Director. Another CFR Director Pete Peterson and Leonard Millman were involved with the Blackstone Group.

MDC-BCCI Bank Of Credit and Commerce International

A series of articles by Time Magazine were done on BCCI.

MDC, Silverado, Lincoln Savings and Millman’s were directly involved with the Bushes, in a world wide Terrorist and Money Laundering Operation. That Operation today is known as Al Qaeda. (See: BCCI – and, yes, I did my part in exposing it.)

Adolph Hitler and George H. W. Bush

Remember who first coined the phrase The New World Order – Nazi Adolph Hitler. When George H. W. Bush was President, Bush re-coined the phrase The New World Order, in several speeches. Since Prescott Bush, George W. Bush the White House Occupants, grandfather financed Adolph Hitler during World War 11 through Brown Bothers-Harriman and was charged with Trading with the Enemy Act, I think it would be appropriate given the evidence that I and many others possess of the Atrocities and Espionage activities of this New World Order Bush Crime Family against America, that we could now change the White House Name to Bushes NAZI-Al Qaeda Headquarters.

Al Qaeda is a disgusting ruse, all created to keep the world in a perpetual state of terror! Al Qaeda was created by the Bushes and is a pawn of the New World Order Satanists!

CITI Group and American Insurance General Financed the
9-11 World Trade Center Terrorist Attack!

George H. W. Bush and Leonard Millman’s CITI Group financing the attack on The United States of America on Sept 11, 2001, known as 9-11, WTC, if this is part of The New World Order, then we as Americans need to immediately take control of The White House and the US Government and put an end to The New World Order.

Rather than Hang these Gangsters for Treason and Killing
3,000 Americans for Oil and Money…

I have another suggestion, lets order our troops out of Iraq, and let the Iraq people know we American’s will no longer tolerate such activity of The New World Order Satanists and drop these Goons on the Airstrip at Baghdad Airport.

The Iraq people then will save America a large amount of taxes in funeral expenses for these Nazi Goons.

Who has the Handcuffs?

– Stew Webb, Federal Whistleblower


March 23, 2005

Citigroup, Putnam Pay
SEC Fines Over Fund


In three unrelated cases, federal regulators fined Citigroup Inc. and Putnam Investments $20 million and $40 million respectively and a smaller brokerage firm $100,000 to resolve allegations that they concealed from customers the fact that brokers were paid to recommend certain mutual funds, creating a conflict of interest.

The Securities and Exchange Commission announced the separate settlements Wednesday with Citigroup, the biggest U.S. financial institution; Putman, the seventh-largest mutual fund company, and brokerage Capital Analysts Inc.

Citigroup, Capital Analysts and Putnam, a unit of Marsh & McLennan Cos., neither admitted nor denied wrongdoing as part of the agreements….


December 13, 2004

Citi, Amex Plan Credit Card

By Matthew Goldstein,

Citigroup and American Express are joining forces to issue a new credit card.

The new card will be issued by Citigroup, but will be accepted by merchants that are part of the American Express network, according to a press release. Citibank will be responsible for handling and billing customers.

The companies did not disclose the financial terms of the partnership.

The deal between the two financial services firms reflects the changing landscape in the credit card business following a federal antitrust ruling against MasterCard and Visa. In a landmark case, a New York federal court found that the two big credit card associations had engaged in uncompetitive business practices that had a negative impact on American Express and other card companies.

The court specifically struck down a rule imposed by Visa and MasterCard that had prohibited member banks from issuing cards from other companies. The Supreme Court, in October, refused to overturn the court’s ruling.

In the wake of the court decision, American Express filed suit last month against eight banks that allegedly conspired with MasterCard and Visa to engineer a boycott of American Express’ charge card. The lawsuit named most of the nation’s major banks, but not Citigroup.

At the time, analysts on Wall Street were puzzled by American Express’ decision not to name Citigroup as a defendant.


October 18, 2004



A tale of suicide bombers, Saudi princes, cash payments to terrorist groups – and how Citigroup got caught up in all of it.

By Robert Lenzner and Nathan Vardi, Forbes

IN AMERICA’S WAR ON TERROR, cutting of the financial flow to the bad guys is a key goal. But it is a particularly elusive one. Even when a patriotic U.S. bank spots something suspicious, it may be hard-pressed to do much about it.

And so it is that Citigroup, the world’s largest financial institution, finds itself confronting the fact that a bank it partly owned and managed in Saudi Arabia may have funneled thousands of dollars to terror groups and to the families of Palestinian suicide bombers–at the behest of the Saudi royal family.

The allegations involve Saudi American Bank, also know as Samba, the Riyadh-based affiliate in which Citi had a 20% stake. In late 2002 Samba was added as a defendant in a federal lawsuit filed by relatives of Sept. 11 victims against prominent Saudis and charities to which they appeared to be connected.

The suit, prosecuted by Washington, D.C. lawyer Allan Gerson, among others, alleges that Samba “participated in the fundraising campaign in Saudi Arabia for collection donations to the heroes” of the Palestinian uprising. Samba has filed a motion to dismiss.

Now Gerson is eyeing an additional suit against Citigroup and has lined up as possible plaintiffs 150 people who have lost relatives or themselves been injured in terror attacks in Israel….

In May Citigroup set plans to sell its 20% stake in Samba and end its presence in a market it had served since 1955.

Citigroup had run Samba under a management contract since 1980. At one point Citigroup had 30 people at Samba, including the managing director, the treasurer and chiefs of a few departments….

Samba, the second-largest bank in Saudi Arabia, with a 12% share of bank profits in the kingdom, earned $383 million in 2003. It was the linchpin of Citi’s close ties to the Saudi elite. The royal family’s Prince Alwaleed Bin Talal Alsaud, the world’s fourth-richest man, owns $9.4 billion in Citigroup stock and a 7%-plus stake in Samba. Samba’s chairman was billionaire Abdulaziz Bin Hamad Algosaibi, who died last year; his family, too, owns 7% or more of Samba.

Citigroup’s problems began in 2000, when Saudi Arabia’s royal family issued an edict requiring large banks in the country to create a charitable account that would channel donations to “martyrs” of the Palestinian uprising.

The Saudis billed this as a “humanitarian” effort and decreed that each new account would be known as Account 98….

The effort was managed by the Saudi Committee for the Support of the Intifada Al Quds, says a U.S. government official. The committee is run by Prince Naif Bin Abdul Aziz, the interior minister, an official in the Israel Defense Forces says. In October 2000 another royal, Prince Salman Bin Abdul Aziz, governor of Riyadh, encouraged citizens to deposit money in Account 98.

In still another lawsuit a, the Saudi committee is alleged to have funded – through Arab Bank – suicide bombers and Hamas, the Palestinian group that has claimed responsibility for dozens of suicide bombings in Israel in recent years. That suit, filed in July in U.S. district court in Brooklyn on behalf of eight families of terror victims, alleges that $42 million was distributed to “terrorists and/or their beneficiaries.” … Arab Bank, publicly traded on the Amman Stock Exchange, denies it.

The Saudi government’s role in paying death benefits to relatives of suicide bombers didn’t spark much concern in the U.S. – until after the terror attacks of Sept. 11, 2001. Undaunted, Saudi officials renewed their call for Account 98 donations in December 2001, making an appeal on a government-backed Web site.

Along the way, Israeli officials were gathering evidence about the Saudi-Hamas connection. One lead grew out of a bombing in Tel Aviv on July 1, 2001. Twenty-three people were killed outside a beachfront disco when a man detonated a bomb hidden in a bag he was carrying. Israel fingered a Hamas operative, Abdel Rahman Hamad, as directing the disco blast. Three months later Israeli snipers killed him as he sat reading the Koran on his roof at home in the West Bank.

Hamad’s name surfaced a few months later, as Israeli troops stormed the West Bank offices of the Tulkarm Charity Committee, which the U.S. government calls a Hamas-controlled front. Stored in a Talkarm computer was an Arabic spreadsheet carrying the official logo of the “Kingdom of Saudi Arabia, the Saudi Committee for Support of the Intifada Al Quds.”

The spreadsheet lists Hamad and indicates his family had received 20,000 Saudi yiyals ($5,300). Seized documents show that the Tulkarm group received $545,000 from the Saudi committee and that it funneled funds to 102 families, including eight of suicide bombers.

In late 2002 Citigroup officials asked Samba about Account 98 but got nowhere. Saudi secrecy laws forbid Samba from revealing account records to anyone outside the kingdom. Yet U.S. law prohibits U.S. banks from doing business with Hamas or any other terror group. In early 2003 Citi contacted U.S. Treasury and State Department officials, who spent the ensuing months in talks with the Saudis, worried that Account 98 cash might be going to terrorist activity….

In May Citigroup sold its 20% stake to the Saudi government for a $760 million after-tax gain.

Now the Saudis, at U.S. urging, are phasing out Account 98, folding it and other charity accounts into a single new entity.

The move may, or may not, do anything to stop the flow of money to bombers’ families.


October 8, 2004


Senator Kerry, responding to a question regarding the domestic economy, states that he has been consulting with the former Treasury Secretary in the Clinton Administration – Robert Rubin.

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– For more on the Robert Rubin flock, GO TO > > > AIG: The Un-American Insurance Group; Allied World Assurance; The Chubb Group; Claims By Harmon; Dirty Gold in Goldman Sachs; Dirty Money, Dirty Politics & Bishop Estate; KROLL, The Conspirator; Marsh & McLennan: The Marsh Birds; The Poop on Aon; The Prudential: A Nest on Shaky Ground; RICO in Paradise; Sukamto Sia: The Indonesian Connection; Transylvania Travelers in St. Paul; What Price Waterhouse?; Zeroing In On Zurich Financial Services


October 19, 2004

Fund-Raisers Trade With Iran, Iraq

By Matt Kelley, Associated Press

Yahoo! News

WASHINGTON – More than two dozen top fund-raisers for President Bush and Democratic challenger John Kerry are current or former senior managers of companies punished for trading with Iran or Saddam Hussein’s Iraq – including the chairman of Bush’s Homeland Security Advisory Committee and Kerry’s fund-raising chairman.

Both candidates say they want the United States to hunt down and kill or capture terrorists. They say those who harbor and finance terrorists are just as guilty. Bush famously described Iran, Saddam’s Iraq and North Korea as an “axis of evil” threatening to give terrorists weapons of mass destruction.

But the tough talk doesn’t address the role of American companies that do business, intentionally or not, with countries such as Iran on the U.S. list of state sponsors of terrorism.

Nineteen people who have raised more than $100,000 for Bush are current or former executives or directors of a dozen firms fined for transactions with Iran and Iraq during the past decade, government records show. Nine top Kerry fund-raisers work or worked for five of those companies. All held their respective positions when some or all of the disputed transactions took place….

“In most of these cases, the violations are certainly not intentional and usually inadvertent,” said Bank of America spokeswoman Shirley Norton. The Treasury Department cited Bank of America or its subsidiaries seven times in the past five years for transferring funds to or operating accounts for people in Iran, Sudan and Cuba.

Bank of America Vice Chairman James H. Hance, Jr., has raised more than $200,000 for Bush’s 2004 campaign.

As for Iraq, Bush has seven and Kerry has three top fund-raisers from companies fined for doing business with Saddam’s government.

One example is Joseph J. Grano, Jr., a top Bush fund-raiser and chairman of the Homeland Security Advisory Council. Grano is the former chariman of an American subsidiary of the Swiss bank UBS AG and was one of the bank’s six executive board members. He now runs a consulting firm, Centurion Holdings LLC.

The bank paid a $14,750 penalty for permitting a 2001 funds transfer to Iraq. UBS also paid a $100 million fine to the Federal Reserve this year after regulators discovered that UBS workers in Zurich traded billions of dollars worth of U.S. currency with Iran, Libya, Cuba and Yugoslavia between 1996 and 2003.

Some of that cash ended up in Iraq, where U.S. troops seized hundreds of millions of dollars last year – some still in wrappings from the New York Federal Reserve Bank….

Another UBS executive with political connections is Blair Effron, a managing director of UBS Investment Bank. Effron is a top fund-raiser for Kerry and co-chairs Kerry’s business outreach program. Robert Wolf, chief operating officer of UBS investment Bank, also raised more than $100,000 for Kerry….

The punished firm with the most extensive links to the presidential candidates is JPMorgan Chase & Co. Two longtime JPMorgan directors are Bush fund-raisers, as are two former and one current executive. Another JPMorgan executive, Nancy Phund, is a top fund-raiser for Kerry.

The Treasury Department’s Office of Foreign Assets Control has cited JPMorgan and its subsidiaries five times for business with Iran in the past decade and once for a $50,000 funds transfer by subsidiary Chase Manhattan Bank to Iraq in 1999….

Both Kerry and Bush also say they’re concerned about Iran’s nuclear programs, which U.S. officials say are designed to make bombs by Tehran says are only to produce electricity.

The 12 punished companies managed by Bush fund-raisers have been cited 27 times for dealings with Iran since President Clinton banned all trade with Tehran in 1995, records of the Office of Foreign Assets Control say. The five punished companies managed by Kerry fund-raisers were cited 12 times for Iran dealings.

One example is Citigroup, which has one Bush fund-raiser on its board of directors and four Kerry fund-raisers in top executive ranks.

Kerry’s campaign finance chairman, Louis B. Susman, is vice chairman of Citigroup Global Markets.

The assets control office cited Citigroup three times for transactions involving Iran and twice for doing business with entities on the U.S. terrorist watch list….


October 6, 2004


Finance sector invests
heavily in candidates

By Lucy Komisar, Corpwatch

When Phil Gramm came out of the Tavern on the Green one recent August morning, his disposition turned edgy. The former Texas Senator, the long-time banking committee chair, is now a vice chairman of the Swiss financial corporation UBS.

He’d just passed some pleasant hours hobnobbing with comrades in the money trade, all lured to New York by the chance to make profitable connections during the Republican Convention. But Gramm wasn’t keen on talking to waiting journalists, certainly not to the CorpWatch team. Robert Rubin seemed quite at ease sitting next to Teresa Heinz Kerry at the Fleet Center in Boston, home to the Democratic Convention in July. The Clinton Treasury Secretary, former senior partner at the investment company Goldman Sachs, is now chairman of the executive committee of Citigroup. There was no chance of journalists bearding him in the candidate’s box – at least none who would ask uncomfortable questions.


“The banks are made of marble,
with a guard at every door,
and the vaults are stuffed with silver
that the workers sweated for.”

Today, the banks attempt to disarm their critics with patron-friendly public relations like Citibank’s gushy “live richly” campaign, which advises everyone that money really doesn’t matter. What counts are “hugs.”…

So how come Citigroup CEO Sanford Weill, now the company’s chairman, collected $44.6 million compensation in 2003? Robert Rubin pocketed $17 million. These obscenely rich gentlemen must not be reading their company’s ads. (Or maybe the ads are only for the masses.)

Such feel-good promotion masks an industry that is anything but benevolent. And to kill needed regulation for the public good, the banks and financial services companies (that now includes insurance companies, investment firms and stock brokerages) offer big money to the candidates.


According to the Center for Responsive Politics, a Washington-based group that analyzes raw Federal Election Commission (FEC) data, if one combines all finance sector donors (including real estate, accounting corporations, insurance and stock brokers) the combines total contributions to Democratic and Republican parties and federal candidates so far this election season, is a staggering $218 million!

Over the course of his entire electoral career, six out of ten of President Bush’s top lifetime contributors come from the financial sector. In the current presidential campaign, all ten of Bush’s top contributors come from the financial sector (accounting, banking, insurance, stock brokers and investment companies.)

According to summaries provided by the non-partisan public interest group the Center for Public Integrity, contributions to Bush’s campaigns for Congress, Texas governor and the presidency through the third quarter of this year show $353,000 from UBS Financial Services, $445,000 from Credit Suisse First Boston, $505,500 from Merrill Lynch, $493,000 from MBNA Companies, and $343,000 from Goldman Sachs.

On the Kerry side, contributions to the committees of Citizen Soldier Fund, Kerry’s Senate campaigns from 1984-2002, and Kerry’s 2004 presidential campaign through June 30, 2004 included: Citigroup, $226,910; FleetBoston Financial Corp., $202,087; and Goldman Sachs Group $190,750. And not far down in Kerry’s list one can find JP Morgan Chase and Bank of America, which recently merged with Fleet Financial, Kerry’s biggest backer during his congressional career.

Bush and Kerry have four finance sector major donors in common:








$127, 750
















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The McCain-Feingold campaign finance law, passed in 2002, banned corporations and unions from giving soft money contributions directly to the political parties. Now only about 10 or 15 percent of contributions to the candidates comes from PACS. Most money comes from individuals who “bundle” their donations of up to $2,000 per candidate to make it clear who and what they represent. Although the campaigns say they voluntarily report who their bundlers are, they are not required to report it to the FEC.

In the Bush campaign, for example, the ten biggest financial services companies have bundlers who collect $50,000, $100,000, $200,000 or more. Often individuals make donations at the suggestion of a bundler in their company….

However, finance has jumped ahead of telecommunications to become Kerry’s largest corporate benefactor, contributing at least $8 million through bundlers. Goldmans Sachs executives account for four of Kerry’s top-ranked bundlers. Also among them is Chad Gifford, former CEO of Fleet Boston and now the Bank of America chairman.

What do banks and their brethern want for the cash?

According to an August 2003 Public Citizen report entitled Bullish of Bush, E. Stanley O’Neal, CEO and chairman of Merrill Lynch, James Cayne, CEO of Bear and Sterns, and Thomas A. Renyi, CEO of the Bank of New York, saved a total of $1.9 million on their personal income taxes thanks to Bush tax cuts.

But far more important than saving on their executive’s personal income taxes, these companies count on financial contributions to encourage politicians to cut dividend taxes and corporate income taxes, to wave through massive mergers, and water down regulations on accounting standards, money laundering, conflict of interest restrictions and other public interest requirements.

For example, in 1999, Kerry used his position of the powerful Senate Finance Subcommittee to support the merger of Fleet and Bank Boston, even though the merger was opposed by local Democratic leaders and resulted in the layoff of 2,500 workers.

George Bush’s favors to finance capital are so numerous it’s difficult to list all of them, but the dividend tax cut, cuts on capital gains taxes and support for the privatization of Social Security are certainly at the top of the list….


But the big plum of finance de-regulation occurred in the waning years of the Clinton Administration, under no other than Treasury Secretary Rubin, now at Citigroup.

In this era of giant global companies eating up small ones, the big banks wanted, and they got, the abolition of the Glass-Steagall Act of 1933 which banned mergers of banks and other financial services companies (insurance, brokerage, investment companies) on grounds the mega-conglomerates would create conflicts of interest. While banking regulators and the courts had gradually been eroding the separations that existed in the law, it still remained the last government firewall against global financial oligopoly.

Citigroup was the leading company in the financial services industry that benefitted from the law enacting the abolition. It was called after its chief sponsors the Gramm-Leach-Bliley Financial Services Modernization Act.

Yes, the bankers’ friend, Phil Gramm.

Citigroup lobbied aggressively and had a significant influence in shaping it, according to a source close to the drafting process. It needed the law to legalize its merger with the giant, Travelers Insurance, which was allowed “temporarily” by President Clinton and Federal Reserve Chairman Alan Greenspan, supposedly to allow time for the merged group to come into compliance….

How did Citigroup and its lobbyists get the Senate to rush through the legislation? Roper says it’s the usual Capitol Hill story, “When the people who want the legislation passed make massive campaign contributions and the people who oppose the legislation are nonprofits who don’t make campaign contributions, the deck is stacked in favor of passage.”

Citigroup took the lead in proving the critics right. Decisions about lending and investment banking were tied to recommending client company stocks to investors. Regardless of the worth of the stock, Wall Street brokers would hype stocks in order to get companies to give them investment banking business. Financial regulators, as critics had warned, proved utterly unable to prevent these problems.

Caught in the crooked act, Citigroup was one of ten major Wall Street firms that agreed to pay a record $1.4 billion in 2002 to settle charges that they inaccurately and unfairly promoted stocks of companies that gave their firms lucrative underwriting contracts.

Among the President’s top supporters are eight of those firms: Merrill Lynch, Morgan Stanley, UBS America, Goldman Sachs, Credit Suisse First Boston Corp, Lehman Brothers and Bears Stearns. All were accused of knowingly dispensing false stock market advice. In settling the case they admitted no wrongdoing. But prominent personnel at some of the firms, including Merrill and CSFB, have also been criminally prosecuted.

Kerry’s top ten presidential campaign donors include 3 of the same donors, UBS AG Inc., Goldman Sachs, and Morgan Stanley Dean Witter & Co.

Kerry’s number two largest donor as of September 7, 2004: Citigroup.

Despite the big financial backing from finance, not all banking reformers have given up hope on Kerry. When the Neighborhood Assistance Corporation of America (NACA), ran a campaign against Fleet bank for engaging in predatory lending against low-income home owners, Kerry voted for a bill to regulate predatory lending.

NACA president Bruce Marks says that there was a concern at one point that Kerry was defending Fleet. Marks says, “We met with him, and he was fine. We never saw him being out there aggressively supporting Fleet.” He says, “Kerry has been on the right side with the consumer on the banking issues [such as] predatory lending and disclosure.”

Could the Kerry administration turn in a better record on oversight to the finance industry than the scandal plagued years of the Bush administration or the give-away era of the Clinton Administration?

Perhaps, but maybe we’d better find out just what Citigroup’s Rubin is whispering in Kerry’s ear.


October 20, 2004


By Paul Tharp, New York Post

Heads began rolling among top brass at Citigroup over its private banking scandal in Japan – including its superstar Vice Chairman Sir Deryck Maughan and two other key officials.

The shakeup came yesterday just a week after Citigroup chief Charles Prince announced he was “personally hurt” over the alleged money laundering affair at its private banking business in Japan.

Prince said in an internal memo at the world’s biggest bank that Maughan, 56, would be leaving along with Investment Management head Thomas Jones and Peter Scaturro, who ran the company’s big private bank.

The British educated Maughan – who owns more than $70 million in Citigroup stock – has spent 21 years with the organizationn and its predecessor companies, having started as a broker in 1983 at the former Salomon Smith Barney.

Prince last week reacted angrily to the Asian scandal, telling a news conference:

“In Japan, our private bank did not do the right thing. We have people who violated the ruled, violated external rules … [and] despite very significant preventative efforts, we once again found ourselves with people who did the wrong thing, hurt customers and put the franchisee at risk.”…

Officials in Asia ordered Citigroup to shut its private banking office in Japan after failing to conduct proper checks against money laundering.

Regulators in South Korea said they had uncovered fraud in Citigroup’s retail bank in Japan.

A total of 48 branches in Asia are under investigation over possible overseas transfers of up to $1.4 billion, including currency transactions.

Last month, Citigroup also apologized for several European bond sales that triggered a probe by regulators in Britain.


August 26, 2004

Citigroup Sued Over Enron Scandal

NEW YORK (Reuters) – Citigroup Inc. faces a lawsuit from angry investors who allege they were defrauded in a “massive scheme of deception” when they bought securities tied to the credit-worthiness of bankrupt energy trader Enron Corp.

The suit, brought by Bank of New York Co. Monday in New York State Supreme Court on behalf of numerous investors in Enron-related securities, is the latest in a spate of actions at recovering billions of dollars lost when the Houston-based company collapsed into bankruptcy in 2001.

Plaintiffs include well-known distressed debt funds Angelo Gordon & Co. and Appaloosa Investment LP, who charged in the 77-page complaint that Citigroup concocted a fraudulent scheme to raise billions of dollars from the sale of notes called “Yosemite” securities.

Citigroup, the investors said, then used the funds to make “disguised” loans to Enron “to reduce its own Enron credit risk, prop up Enron’s failing financial condition and generate significant fees in the process.”

The complaint alleges fraud, breach of contract and fiduciary duty, and negligence in the Yosemite transactions, which it said took place between 1999 and 2001. Enron sought Chapter 11 bankruptcy protection on Dec. 2, 2001….

A successful lawsuit might complicate Citigroup’s plan to keep its already high legal costs from rising further.

The company in May roughly quadrupled, to $6.7 billion, its reserves for legal bills, including those for Enron, as it agreed to pay $2.65 billion to settle a lawsuit by WorldCom Inc. investors accusing it of participating in financial fraud.

Citigroup Chief Executive Charles Prince said at the time, “We feel very comfortable in saying that, with our advisers helping us, we have established a reserve that will cover all of our meaningful exposures.”

Reducing exposure

In their complaint, the Yosemite investors said Citigroup knew Enron’s debts were several billion dollars greater than the company publicly disclosed between 1999 and 2001.

They also said the bank wanted to cut its own, rising exposure to Enron. Though Enron was an investment-grade company until just four days before it filed for Chapter 11 bankruptcy, the complaint said Citigroup, because of undisclosed information it possessed about Enron, knew that defaults were “likely.”

“Citibank thus found itself in a bind. It knew Enron was not loan-worthy, yet if it failed to find Enron new sources of financing, it ran the significant risk that Enron would collapse before Citibank could recover the billions of dollars Enron owed it,” the complaint said.

“The Yosemite transactions were Citibank’s solution to its problem.”…


August 13, 2004

United Health, Citigroup unit settle Medicare fraud claim

By Chad Bray, Dow Jones News Service

NEW YORK – Two insurers have settled civil Medicare fraud charges by the U.S. attorney’s office in New York City for $20.6 million, the government said Thursday.

In a news release, prosecutors said the Travelers Insurance Co., a life insurance unit of Citigroup Inc., and United Healthcare Insurance Co., a unit of Minnetonka-based UnitedHealth Group Inc., agreed to settle the case without admitting wrongdoing.

Under the terms of the settlement, Travelers will pay $10.9 million, while United Healthcare will pay $9.7 million.

The Travelers Insurance Co. decided to settle in order to avoid the distraction of further litigation, and denies any wrongdoing in the case,” spokesman Bob Nolan said in a prepared statement. “Today’s settlement announcement closes a chapter on an issue that dates back almost a decade.”…

The government had claimed that Travelers, between October 1988 and January 1994, inflated its cost reimbursements well above its actual expenditures under the Medicare program in order to obtain higher reimbursement and greater performance incentive payments.

Travelers was the fiscal intermediary for the Medicare Part A program in portions of Connecticut, Michigan and New York; the Medicare Part B carrier for Connecticut, Minnesota, Mississippi and Virginia; the Railroad Retirement Board carrier nationwide, and the Durable Medical Equipment carrier for Connecticut, Michigan and New York.

United Healthcare took over those contracts in January 1995 and continued the improper billing practices through December 2000, prosecutors said.


July 30, 2004

Parmalat seeks $10 billion in Citigroup fraud case

By Christian Plumb, Reuters

MILAN – Parmalat is seeking more than $10 billion in damages from Citigroup in a lawsuit that accused the U.S. bank of helping defraud the Italian food firm and its shareholders and creditors of billions of dollars.

The new administration of Parmalat said in the lawsuit filed on Thursday that “the top leavels” of the world’s leading financial services group played a crucial part in the multi-billion euro fraud that plunged the company into insolvency in December.

“Citigroup engaged in a series of transactions with Parmalat or its subsidiaries whose only economic purpose was to enrich Citigroup, at the ultimate expense of Parmalat,” according to the lawsuit, filed in the U.S. state of New Jersey.

“Citigroup’s transactions with Parmalat were knowingly designed to assist Parmalat in a broad, continuing series of fraudulent transactions,” it said.

Citigroup declined comment of the specifics of the suit … But it said it had been the victim of fraud perpetrated by Parmalat.

Citigroup lost hundreds of millions of dollars as a result of Parmalat’s fraudulent conduct, and we will continue to pursue our substantial claims against the company and defend against frivolous claims in search of a deep pocket,” the bank said….


Citigroup also created a special purpose vehicle called “buconero” – Italian for black hole – used for loans among units in the Parmalat group.

The lawsuit says Citigroup designed and structured deals that helped “a few culpable members of Parmalat’s management hide Parmalat’s mounting debt, artificially improve its reported cash-flow and manipulate Parmalat’s financial statements.”

The transactions “were all approved at the top levels of Citigroup and required the coordination of different groups at Citigroup throughout the world, from New York, to New Jersey, to England and Italy itself,” according to the suit.

Saying $8 billion was “lost, stolen or wasted” with Citigroup’s help, the 65-page complaint named a number of bank employees, including a Citibank managing director, who it alleged had helped with the fraudulent transactions.

In addition to fraud, the suit accuses Citigroup of diversion of corporate assets, unjust enrichment, deepening Parmalat’s insolvency, unlawful civil conspiracy and racketeering.

Parmalat’s losses of more than $10 billion were a direct result of the fraudulent activity, the suit said, asking the U.S. court for “an award of damages for all of the losses.”

Citigroup had previously been named in at least two class action suits brought by Parmalat investors in the United States.

Bank of America, which Milan prosecutors have asked a judge to bring to trial of fraud charges along with Parmalat’s former executives and auditors, could not be reached for comment.

Several other Italian and foreign banks are being probed to see how much they knew about Parmalat’s finances when they did business with its ex-management.

Deutsche Bank said there had been no damage claims filed against it over Parmalat. A source at the bank said it was in close negotiations with both Italian and German regulators, Italian prosecutors and Parmalat’s Bondi.

A spokesman at Morgan Stanley declined to comment….


July 23, 2004

The Enemy Within

By Seth Lubove, Forbes

Riot police fired rubber bullets and tear gas at protesters in Rio de Janeiro in 1998 when Brazil broke up and privatized its massive state-owned monopoly phone system, Telebras. For Brasil Telecom, one of the original Telebras companies, the fighting hasn’t stopped since.

In a transatlantic feud that has landed in courts and government agencies on three continents and the Caribbean, and sullied the reputations of Citigroup (nyse: C) and now, potentially, J.P. Morgan Chase’s star investment banker Jimmy Lee, Brasil Telecom and its feisty Italian-born female boss have waged a fierce battle over control of the company with its second largest shareholder, Telecom Italia. The Italian communications conglomerate owns a 19% stake in the holding company that controls Brasil Telecom, although even that amount is the subject of a furious battle over whether the Italians can increase their stake to their original 37%, before regulatory requirements forced the company to reduce its holdings.

“This is a breach of the fiduciary duty a shareholder has with a company,” complains Brasil Telecom Chief Executive Officer Carla Cico, 43, referring to Telecom Italia’s war of attrition, the subject of various arbitrations, lawsuits and regulatory actions. “The result today is Brasil Telecom’s stock is undervalued.”…

Now, a fresh firestorm has erupted over allegations that Brasil Telecom hired private investigators at Marsh & McLennan’s Kroll unit to spy on Brazilian government officials and look into whether Telecom Italia has conspired to secretly undermine Brasil Telecom so it could take the company over on the cheap.

Both Kroll and Brasil Telecom acknowledge Kroll was hired, but say media reports that Kroll spied on Brazilian officials to check if they were aligned with Telecom Italia are bogus.

“Brasil Telecom never asked Kroll to investigate any member of Brazil’s government, and we never did,” said Kroll’s regional managing director for Latin America, Andres Antonius, in a statement….

Forbes obtained a copy of the Kroll report and related summaries. The 44-page report includes no reference to government officials. Among many other things, however, the report does allege that J.P. Morgan Chase, and Vice Chairman Lee, aided Telecom Italia in a conspiracy campaign by arranging a secret financial transaction that helped to further undermine Brasil Telecom.

Kroll claims in the report and in related summaries that Chase orchestrated a complicated financing scheme with a separate company in 2000 that allowed Telecom Italia to swoop in and buy out a corporate network services company that Brasil Telecom was set to acquire for itself, despite the fact that Telecom Italia participated in Brasil Telecom’s board discussions about the acquisition.

The network services company, Vicom, was instead acquired by something called Globo Cabo (now Net Services), a Brazilian cable operator that Telecom Italia had been “secretly” negotiating with, according to a summary of the Kroll report.

In March 2000, Telecom Italia met with Globo to discuss a deal in which Globo could invest in Brasil Telecom if Telecom Italia was successful in taking the company over, a violation of Brasil Telecom’s shareholder agreement, according to the report….

According to the summary of the Kroll report, Chase “benefited from the fraud” by earning fees and shifting the risk associated with the financing of the venture away from Globo to Telecom Italia’s stronger balance sheet, while also obfuscating Globo’s debt ratings….

Citigroup, meanwhile, has been dragged into the mess due to its investment, reportedly $700 million, in DVC/Opportunity Partners (as in “Citigroup Venture Capital”), a Brazilian fund that invests in newly privatized industries. The fund, in turn, owns a controlling stake in the holding company that ultimately controls Brasil Telecom, and which is aligned with management against Telecom Italia.

Much to the American bank’s likely aggravation, Citigroup’s name has been regularly trotted out in stories about the feud, despite the bank’s contention that it has no “controlling interest” in Brasil Telecom, according to a spokesperson who otherwise declined to comment on the feud….

For more on Kroll Associates, GO TO > > > KROLL, the Conspirator


May 11, 2004

Citigroup To Pay $2.65 Billion in WorldCom Fraud Settlement

By Gretchen Mortgenson, The New York Times

Hoping to close the books on its role as lead banker to WorldCom, Citigroup agreed Monday to pay $2.65 billion to investors who bought stock and bonds in the telecommunications giant before its bankruptcy filing two years ago.

The payment is the largest ever by a bank, brokerage firm or auditor to settle a fraud case brought by investors who bought securities issued by a corporation that was advised by one of those firms. It is the second-largest amount ever paid to settle a securities class action, trailing Cendant Corp.’s payment of $2.85 billion in 2000.

The Citigroup settlement, which must be approved by the court, came just hours before an appellate court was to hear arguments addressing among other things, the conflicts between the firm’s stock analysis and the investment banking fees generated by WorldCom. The Securities and Exchange Commission had filed a friend of the court brief supporting the investors’ claims.

Litigation continues against the defendants: WorldCom’s former officers and directors, other banks and brokerage firms that sold WorldCom securities, and Arthur Andersen, the company’s auditor at the time.

Tens of billions of dollars in investor wealth vanished when WorldCom collapsed in July 2002, and Monday’s settlement is the first indication of how much money may yet be paid by the people and firms that helped the company sell its securities to investors. In 1999, when the stock was at its peak, WorldCom had a market value of more than $150 billion.

“This settlement, while historic, is only the first step,” Hevesi said. “We will continue to pursue our claims against the others who bear responsibility for the debacle at WorldCom. The investing public depends on the gatekeepers, and the gatekeepers have to be diligent in making sure investors get accurate and truthful information….”


March 17, 2004


From The New Republic Online

Buried in the financial pages this morning is news that, last year, Sanford Weill of Citigroup was paid $44.7 million – that being the year he lost his CEO position owing to the many scandals the company has been embroiled in. Further buried in the financial pages is news that, last year, Weill realized $262.4 million from exercising stock options or selling accumulated stock back to Citigroup. Sanford Weill took home $330 million last year for sitting in a chair at the top of a troubled company.

There’s a word for this, and the word is corruption.

Set aside the regulatory problems and ethical lapses that have characterized Citigroup under Weill’s leadership: the $400 million fine the company paid in 2002 for fishy dealings; the $1.5 billion write-off the company took in 2002 for the federal fine and “toward estimated costs of the private litigation” arising from its deceptive stock practices; the fact that Citigroup was humiliated when Weill tried to get himself onto the board of the New York Stock Exchange – then run by the greedy Dick Grasso – at the same time Citigroup was agreeing to Securities and Exchange Commission sanctions. ….

Set all this aside and assume for the sake of argument that Weill’s name was not tainted. … How could anyone at all sitting in a chair and signing memos be worth $44.7 million in a single year? Did Weill have some blinding insight that was without precedent in business history? Did Weill engage in some brilliant masterstroke? Citigroup’s overall strategy differs only in minor respects from that of its major competitors. … If an orangutan had been the company’s CEO in 2003, its share prices probably would have risen.

Did Weill do any unusually good job of attending meetings, schmoozing at lunch and signing memos? Even if he did it’s impossible to justify $44.7 million for a single year – bearing in mind that this money does not pop out of the air. Weill’s big payday for 2003, or his accumulated $330 million haul, is money that could otherwise go to Citigroup shareholders as dividends, while the portion that is stock grants or exercised options both dilutes the value of shares held by existing shareholders and represents shares the company might have sold to raise equity – the reason stock exists in the first place – but instead gave away to Weill.

Last year Weill was paid $110,000 per day, The New York Times calculates in a piece that was buried in the financial pages. That is grotesque….

Jeffrey Toobin observes in the current New Yorker of today’s CEO ethos: “They took credit when the nation’s economy made almost every business leader look good, and blamed the fates when times turned hard. Many were, in essence, lavishly paid bureaucrats – caretakers rather than creators.” The $1.5 billion Citigroup wrote off in 2002 for Weill’s mistakes came out of the pockets of shareholders, but was presented by the company as just the vicissitudes of the fates. Immediately Weill resumed shoveling shareholders’ money back into his pockets.

Corporate CEOs should be paid more than cab drivers, and many CEOs make important contributions to society. But there’s a word for grabbing $44.7 million for less than a year’s time sitting in a chair, and the word should be corruption.

Where is the locus of the problem in this case, with Weill personally or with the company board that approved his grotesque exercise in avarice? The company board had to vote to say, in effect, that there was no qualified person willing to sit in the Citigroup chair for less than $44.7 million.

Big-company boards are composed mostly of people who benefit personally by driving up executive pay; 11 of Citigroup’s 16 active board members are chairmen or CEOs of big companies. If they throw absurd amounts at the Citigroup CEOs, this makes it easier for them to argue that their own companies should throw absurd amounts at them. Benefitting personally from your decisions about other people’s money is called corruption.

It’s past time that greedy men like Weill stopped grabbing grotesque sums at the expense of common shareholders, and it’s past time newspapers and politicians stopped using euphemisms like “compensation” and called this what it is, corruption….


August 5, 2003

Citigroup, Morgan Chase fined for Enron deals; corruption at the heights of American finance

By Joseph Kay,

Citigroup Inc. and JP Morgan Chase & Co., the largest and second largest US banks respectively, reached an agreement July 28 with the Securities and Exchange Commission (SEC) to pay a combined $255 million in fines in connection with their involvement in the fraud perpetrated by Enron.

JP Morgan will pay $135 million and Citigroup will pay $120 million to the SEC. In addition, both banks reached a settlement with the Manhattan district attorney that includes an agreement to pay $12.5 million each to New York City and New York State.

The SEC charged that the two banks aided defunct energy trading giant Enron in disguising loans as cash in order to defraud investors. In December 2001, Enron filed what at the time was the largest corporate bankruptcy in US history.

Having sustained itself on the basis of fraudulent accounting practices and illegal financial manipulations, Enron – which had the closest ties to President George W. Bush and other officials in his administration – has become a synonym for corporate criminality. The revelations of the fraud carried out at that company initiated a wave of accounting scandals – including those at WorldCom, Tyco and other firms.

The involvement of the banks in these scandals reveals that the corruption that has come to light over the past several years is not simply a matter of a few “bad apples,” but rather involves the entire corporate and financial elite….

The government is hailing the settlement as a great victory. … Manhattan district attorney Robert Morgenthau stated that the settlement sent a signal: “No more phony baloney offshore special purpose vehicles that are not understandable.”

However, the settlement will have little real consequences for the operations of the banks. They have promised not to engage in such prepay deals in the future unless the client companies practice full disclosure. Both Citigroup and JP Morgan agreed to put in place tighter risk management controls, but purely on an internal level. According to these new controls – which must be submitted to the Federal Reserve for approval – senior executives will have to exercise greater oversight of complex financial arrangements.

There are no provisions for government oversight of banking operations, and no enforcement mechanisms or consequences if the banks do no comply.

As a sign that investors considered the settlement a win for the banks, stock prices rose for Citigroup and JP Morgan the day the agreement was announced.


June 10, 2003


The Courier-Journal

The board of directors at financial services giant Citigroup ranks worst overall when it comes to the effectiveness of corporate boards, an independent governance monitor said yesterday.

Taking a close look at America’s 1,700 largest companies, the Corporate Library assessed the ability of their boards to provide effective oversight, and found chief executive compensation to be one of the most significant indicators of who’s in charge.

In addition to Citigroup, the worst performers were Allstate Corp., Emerson Electric Co., Gemstar-TV Guide and Honeywell International.

Citigroup defended itself yesterday, saying its “independent and active board has been a source of strength as the company has grappled with highly complex issues while simultaneously delivering record values for all its shareholders.”

Rounding out the 10 worst boards are J.P. Morgan Chase, Loews Corp., SBC Communications, Verizon Communications and Walt Disney Co….


May 8, 2003

The Wall Street Fix

PBS Frontline

Last week, when New York State Attorney Eliot Spitzer, SEC Chairman William Donaldson, and other regulators charged 10 of Wall Street’s biggest firms with fraud and announced a $1.4 billion settlement – the biggest in Wall Street’s history – they looked into the cameras and spoke of “restoring investors’ faith and confidence.”

But what has really been learned from the seemingly endless scandals that have rocked Wall Street and shaken the markets for the past two years? How many investors understand how Wall Street really does business, and how it fueled the bubble during the 1990s?

In “The Wall Street Fix,” FRONTLINE correspondent Hedrick Smith looks inside the culture of Wall Street and the world of investment banking, investigating the hidden relationships between the Street’s biggest bank, Citigroup, and the bubble’s most spectacular failure, WorldCom. Focusing on the story behind Worldcom’s incredible rise and fall – and the relationship between its CEO Bernie Ebbers, and Citigroup’s star telecom analyst Jack Grubman – Smith shows how Wall Street drove the telecom boom, pocketing enormous profits, and then took millions of investors on a ride that eventually cost $2 trillion in losses on WorldCom and other telecom stocks.

Jack Grubman and Salomon Smith Barney were essential enablers for WorldCom to take off,” says Scott Cleland, CEO of the Precusor Group, an independent research firm specializing in high tech and telecom. “It took a rising stock price. It took some very good investment banking, and some very good salesmanship in order to sell the marketplace [on the company].”

The key to these relationships between up-and-coming companies and investment banks, industry insiders say, were the Wall Street analysts who were supposed to provide investors with objective recommendations on which stocks to buy. The analysts, however, worked for the investments banks, and instead of issuing objective reports, these analysts were helping their employers secure the lucrative banking business of the companies they were supposed to be objectively covering.

“What we found was that analysts were involved from the very beginning of the investment banking relationship – going out there, soliciting a client, promising that if you bring your business to our firm, we will take your company [and] proclaim to the world that it is the best thing since sliced bread,” asserts Spitzer.

“It wasn’t just one corrupt individual,” he adds. “It was an entire business model that was flawed….”

The report also looks at the relationship between Grubman and Citigroup CEO Sandy Weill and how Weill’s creation of the nation’s first “superbank” in 1998 – merging Salomon Smith Barney with Citibank, a giant commercial bank, and Travelers, an insurance giant, under one corporate umbrella – contributed to the conflicts of interest addressed in last week’s settlement.

The merger that created Citigroup was made possible by Federal Reserve Board decisions in the 1980s and 1990s, and by Congress’s eventual repeal in 1999 of the Glass-Steagall Act, a 70-year old law aimed at protecting investors by separating investment and commercial banking.

“The repeal of Glass-Steagall was a big deal because it enabled the kind of colossal combinations that just weren’t envisioned before,” Cleland says, “where your brought the savvy of an investment banking house like Salomon Smith Barney together with a Citibank. And Citibank could loan an enormous amount of money.”

In “The Wall Street Fix,” FRONTLINE reveals that Travelers gave WorldCom CEO Bernie Ebbers a personal mortgage for $1 billion. Ebbers would use the loan to build a personal business empire by purchasing half a million acres of timberlands in Mississippi, Alabama, and Tennessee. In addition, Citibank gave Ebbers another loan that he used to finance ownership of a 500,000-acre ranch in Canada – a loan that attorneys representing irate stockholders charge was backed by 2.3 million shares of Ebber’s WorldCom stock.

“That’s a very troubling link in our view,” says attorney Sean Coffey, whose client, the New York State Employees Pension Fund, has sued Wall Street banks to recover $300 million in WorldCom losses.

Citibank [had] an interest in the stock price of WorldCom being high enough to cover the loans they’ve made to Mr. Ebbers. And yet, in another part of the same building you’ve got Jack Grubman issuing analyst reports saying, ‘Buy, buy, buy that stock’ to drive the price up.”

Coffey also questions whether Grubman’s close relationship with WorldCom executives would have alerted him to signs of the accounting fraud with which WorldCom has been charged. According to Coffey, Grubman’s e-mails confirm that instead of objectively analyzing WorldCom’s performance, Grubman was coaching WorldCom executives on what to tell other stock analysts about the company’s accounting practices.

FRONTLINE also speaks with two former Salomon Smith Barney brokers, who describe in detail how their firm steered choice initial public offerings (IPOs) to telecom CEOs like WorldCom’s Ebbers far more frequently that was reported to Congress. By offering large blocks of IPO stock at the typically low, opening-day price – even after the actual price had doubled, tripled, or quadrupled in trading – these brokers say Salomon was essentially giving millions of dollars in “free money” to CEOs in exchange for their investment banking business.

“How do you pay a corporate officer five, 10, $20 million in risk-free profits and not have it influence his decisions,” asks David Chacon, a former Salomon Smith Barney broker who handled IPO offerings.

It’s an impossibility. Of course it’s a quid pro quo.”…

“The Wall Street Fix” concludes with the settlement reached by 10 Wall Street banks and several regulators. The settlement combines $1.4 billion in fines and other payments with a handful of reforms, such as prohibiting IPO giveaways to CEOs, and creating more distance between Wall Street analysts and investment banking deals.

But several Wall Street veterans and investors tell FRONTLINE that the settlement does not adequately protect investors. Some Wall Street experts say that research analysts should be totally separated from investment banking, while others say the banks should be forced to publicly acknowledge how they hurt investors. Still others believe that criminal prosecution is necessary to restore investor confidence in Wall Street.

“We’ve moved the ball somewhat, but the problem is still very much there,” says former SEC Chairman Arthur Levitt.

“Have we heard from the firms precisely what they did? The fines are symbolic. A satisfactory settlement of this issue would involve a public revelation and public admission, by all parties across the board, of what went wrong.”…


September 20, 2002

Grubman faces charges
from NASD

Fraud charges also could be leveled against Salomon


The National Association of Securities Dealers is preparing to file administrative charges of securities fraud against Salomon Smith Barney and its former telecommunications analyst Jack Grubman, according to people familiar with the matter. The charges would stem from the firm’s positive research reports on Winstar Communications Inc., a telecommunications company that filed for bankruptcy-law protection last year, these people said….

The NASD has focused on whether Mr. Grubman misled investors by touting shares of Winstar, one of Salomon’s investment-banking clients, amid evidence that the company was in deep financial trouble, people familiar with the matter say….

Any NASD civil action would mark the first major case by federal securities regulators investigating whether big securities firms obtained investment-banking business by making overly optimistic stock picks. Charles Prince, Salomon Smith Barney’s new chief executive, met Thursday with Mary Schapiro, head of the NASD’s regulatory division, to discuss the Winstar case, people familiar with the meeting say….

The moves signal that Citigroup Inc. and its Salomon Smith Barney unit are aggressively seeking to put a number of regulatory woes behind them. On Thursday, Citigroup, the nation’s largest financial-services firm, agreed to pay $215 million to settle federal charges that a company it acquired manipulated as many as two million people into buying overpriced mortgages and credit insurance before the Citigroup purchase….


Next week, Mr. Prince is slated to meet with NASD officials and Stephen Cutler, the Securities and Exchange Commission’s enforcement chief, in a bid to arrive at a “global settlement” of all federal regulatory matters involving Salomon. The various inquiries involve allegations that the firm used hyped research to win investment-banking deals and handed shares of hot initial public offerings to corporate executives as a way of winning lucrative banking assignments, misleading small investors in the process….

At the same time, Salomon has begun settlement talks with the office of New York State Attorney General Eliot Spitzer, which has launched the most far-reaching probe into conflicts of interest involving the firm’s research and other matters, these people say.

The Spitzer investigation is potentially the most problematic for Citigroup: In addition to investigating whether Mr. Grubman hyped research on telecom stocks to win investment-banking deals, Mr. Spitzer also is examining the role played by senior executives at the firm….

Mr. Spitzer’s office, meanwhile, also is investigating whether the firm improperly doled out IPOs to senior executives whose companies did business with the securities firm. Indeed, people close to the inquiry say Mr. Spitzer is considering ways to force corporate executives who have improperly received IPO allocations to “disgorge” some of the gains back to investors. . . .

If the NASD proves its securities-fraud allegations, it could levy a wide array of sanctions against Mr. Grubman, including millions of dollars in fines and other penalties such as suspension, or a prohibition, from the securities industry. The firm also could face certain sanctions.

There is a potential downside for Mr. Prince in the Spitzer investigation. Mr. Grubman’s lawyers have made it clear that the former research star is willing to cooperate. They also point out the pressures placed on analysts by investment bankers and other executives to influence stock ratings when lucrative investment-banking deals are on the line….

In a sense, Citigroup already has paid a big penalty amid the various allegations involving its business practices during the stock market bubble of the mid- to late-1990s.

This year, the market value of the financial-services giant has declined by nearly $120 billion, or about 45%, as investors have questioned Citigroup’s business model of combining corporate lending, investment banking, research and brokerage services for small investors under one roof.

Managing conflicts at such a wide-ranging conglomerate has proved difficult. This predicament was highlighted by Citigroup’s work with Enron Corp., the Houston-based energy giant whose December bankruptcy-law filing triggered a spate of disclosures of corporate malfeasance. Citigroup, like some other financial-services firms, worked as Enron’s lender, underwriter and adviser, among other roles.

Congressional investigators believe that Citigroup helped Enron hide billions of dollars in debt from investors and ratings agencies through a complex series of transactions. Citigroup officials deny that the firm did anything wrong.

Meanwhile, separate inquiries by Mr. Spitzer’s office and the NASD concern Salomon’s research practices involving a broad array of telecommunications firms, and whether senior Salomon officials allotted hot IPOs to corporate executives running these companies as a way of winning lucrative investment-banking business. Much of this line of questioning surrounds the research of Mr. Grubman, once one of the highest-paid analysts on Wall Street.

Mr. Grubman was initially at the center of the various probes, but in recent weeks officials in Mr. Spitzer’s office, as well as NASD investigators, have shifted their emphasis, people familiar with the matter say. Now, investigators are looking more broadly at whether Citigroup’s various businesses create conflicts that put small investors at risk.

“Conflicts of interest are rampant at Citigroup,” asserts Jacob Zamansky, a lawyer who has filed an arbitration claim against the firm and Mr. Grubman over its research.

“If a firm like this has to choose between a big corporate client that provides huge investment-banking fees, and a small investor who doesn’t, the investor will always lose.”

       Copyright © 2002 Dow Jones & Company, Inc., All Rights Reserved.


September 29, 2002

Predators In Paradise?

The inside story of how lenders at Citibank allegedly played loan shark, charging the island nations of the Caribbean excess fees and interest payments


In a rambling two-story house hidden by mango and chicle trees on the industrious island of Trinidad lives an unlikely watchdog against corporate greed.

Ved Seereeram, a financial consultant and former banker, has been working for years to expose what he describes as a prestigious U.S. lender aggressively marketing financial instruments to governments that didn’t really understand them.

Tens of millions of dollars in excessive fees and interest, he says, have been diverted from poor Caribbean countries into the coffers of Citibank, now a unit of Citigroup.

Until recently, no one really listened.

But with the unraveling of Enron and WorldCom and recent allegations of legal and ethical lapses at Citigroup, Seereeram’s cries are finally being heard. As a result of his investigations, Trinidad’s tiny island neighbor Dominica has filed suit against the Citibank unit, alleging that it secretly and aggressively overcharged the government of Dominica on a bond issue to finance the island’s first international airport.

“We believe the allegations are without merit,” says Lula Rodriguez, a Citibank spokeswoman. Seereeram hopes Dominica’s lawsuit will bring renewed scrutiny to a case closer to home: a 1993 deal to refinance a natural-gas exploration project, in which he claims Citibank overcharged Trinidad’s government. Citibank has denied any impropriety in that transaction.

With his clipped cadences and precise, impatient manner, Seereeram talks like an accountant of the green-eyeshade era. But in his eight years as a merchant banker at Citibank Trinidad, he helped bring the island into the world of structured finance, which involved complex deals that aided Trinidadian businesses in minimizing their tax liabilities and hedging against swings in interest rates.

“Citi had the reputation of being innovative, sailing close to the wind and dominating the capital market,” says Richard Young, managing director of Scotiabank, a Canadian institution with a division in Trinidad. Seereeram rose to managing director at Citibank’s merchant banking arm, but he left in 1998 after clashing with management over bonuses and marketing strategy, he says.

He started working as a consultant and soon realized that Citibank Trinidad had begun marketing the structured finance instruments that he had developed to such state-owned entities as Trintomar, a joint venture of Petrotrin and NGC, Trinidad’s oil and natural-gas authorities.

It bothered Seereeram that Citibank was taking complex financial vehicles intended for private companies, in part to reduce their taxes, and selling them to a struggling public entity that at the time paid minimal taxes. He began to investigate, hoping to take a fee from any money recovered. “They were not disclosing the true nature of the product,” he says.

The product was a refinancing package for a natural-gas exploration project off the southern coast of Trinidad. Lacking the postcard beaches that draw tourists to neighboring islands, Trinidad depends mostly on oil and industry.

The Trintomar venture stumbled over a series of drilling mishaps and in 1992 was in danger of defaulting on a loan to Nissho Iwai, a Japanese company that had financed the project. Three big international lenders submitted proposals to refinance the $61.5 million balance owed to Nissho Iwai. The plans were similar, but with its long history in Trinidad, Citibank emerged as the front runner.

Citibank proposed a deal in which it would buy Trintomar’s accounts receivable (two-year contracts to supply petroleum to Shell and Texaco) for $66 million – a little more than was needed to pay off the Japanese loan. Trintomar agreed in principle and began talks with Citibank to finalize the terms.

But then the bank changed the game. In addition to the loan they had been talking about, Citibank wanted to finance a second loan of $96.5 million. It was analogous to someone going to borrow money for a car, and as a condition of the deal, the lender insisted that he borrow more than twice what he needed——and pay fees and interest on the whole thing.

Why did Trintomar agree to these terms? Seereeram and other critics say it was a sort of bait and switch.

Citibank met with Trintomar three times in the spring of 1992 to pitch its original $66 million refinancing proposal, and in a letter dated Sept. 9, Trintomar asked for a formal proposal. The next day, Citibank sent a letter outlining the extra $96.5 million loan in several pages of eye-glazing detail. Trintomar officials, thinking the smaller loan was still on the table, kept negotiating.

As Trintomar edged closer to default, the managing director of Citibank Trinidad, Suresh Maharaj, turned up the pressure. “I am sure that you will appreciate that we cannot hold open a commitment for this amount of $96.5 million indefinitely,” he wrote on Dec. 1. “I have just visited my head office, and this matter was discussed in detail … There are Citibank clients in other countries willing to use these funds having already signed their respective commitment letters.”

Now facing default, Trintomar accepted the extra $96.5 million it didn’t need. With the refinancing in place but the gas exploration project then failing, Trintomar found a firm to sublease its production facility in late 1992 — an up-and-coming Houston outfit called Enron.

The loans were paid, and Enron (now EOG Resources in Trinidad) started pumping millions of cubic feet of gas through the platform every day. The deal eventually faded from view, until a new chairman arrived at Trinidad’s state-owned oil company.

Donald Baldeosingh was only 34 when he took the post and was determined to make Petrotrin efficient and profitable. He wondered how the Trintomar venture could have got into such a poor lending deal and asked a London law firm to look into it. The firm retained David Hudson, a retired British merchant banker, who responded with a scathing report, a copy of which Time obtained.

Hudson sifted through contract language that he called “virtually incomprehensible” and found “two basic structural flaws” that were “wholly inconsistent with normally accepted standards of banking conduct.”

Hudson calculated that Citibank, as a result, was paid more than twice as much in interest and fees as it would have received under its initial proposal to Trintomar: a total of $21.1 million in fees and interest on a loan of, effectively, $61.5 million.

The surplus lending was, in Hudson’s opinion, extraordinary and unexplained. “I can think of no good commercial reason for … these features of the structure, and have seen no evidence of any,” Hudson wrote. “I conclude, based on the evidence I have seen, that it is probable that the transaction, taken as a whole, was both fraudulent and corrupt.”

Hudson’s report found a responsive audience in Baldeosingh, who stopped Petrotrin from doing business with Citibank and pushed the government to investigate. “We had an opportunity to recover a significant amount of money,” Baldeosingh says. Instead, Trinidad’s elected officials turned on Baldeosingh. After tussling with the Energy Minister over control of a Petrotrin unit, Baldeosingh left office.

News of Seereeram’s investigations surfaced in the local press, and Citibank took out full-page ads in Port-of-Spain’s daily newspapers in January 2001 defending its reputation.

Citibank had commissioned Ernst & Young to conduct “an independent analysis of the entire transaction,” the ads said. “The Ernst & Young report corroborates Citibank’s own findings, that the 1993 transaction with Trintomar was fair, reasonable and appropriate.”…

By the spring of 2001, the investigations into the Trintomar transaction had fizzled out. Seereeram was distracted when a partner in his consulting firm was disgraced in a separate financial scandal. Seereeram was turning into a Dickensian figure: the aggrieved claimant in a never-ending dispute over money. This was a character he knew well: Seereeram’s father, a sugar-cane farmer, spent 15 years fighting a law that required farmers to surrender a percentage of their profits to the sugar farmers’ trade association.

Seereeram hunted for other transactions in which Citibank had used financial instruments like those in the Trintomar deal, which, he says, “made them (Citibank) feel like they could get away with this.” His chase led him to the nation of Dominica, a speck of island 300 miles north of Trinidad. Dominica depends on connecting flights on small planes from larger islands, and its minor tourist trade is struggling. The government sought bond financing from Citibank Trinidad to build Dominica’s first major airport, which would be able to handle larger jets from the U.S. and Europe.

Seereeram contacted Dominica’s government after seeing documents related to the bonds. According to the terms of the deal, outlined in documents obtained by Time, the airport was to be financed in part by bonds to be secured by a $2.8 million “sinking fund,” or money loaned in excess of construction needs and managed by Citibank.

But instead of investing the sinking fund elsewhere, the documents show, Citibank used the fund to buy up the airport bonds and convert them into a different kind of bond that reaped a higher premium, without telling the borrower.

The government of Dominica filed suit against Citibank in July, accusing it of extracting “secret profits” of about $1.8 million from the transaction, on a bond issue that lacked proper security and provided, in effect, only $14.2 million in financing, the lawsuit alleges. Citibank is expected to submit its formal response in the case next month.

Dominica’s airport, hampered by bureaucratic struggles, has not been built.

With the renewed scrutiny directed at Citibank Trinidad, Trinidad is reconsidering another controversial deal, a complex 1998 interest-rate swap now under review by its attorney general. Conrad Enill, Trinidad’s Finance Minister, says his government is closely watching what happens in Dominica. So far no one has been willing to reopen the Trintomar transaction, but Seereeram persists.

It took his father 15 years to win his sugar battle. Seereeram has been fighting for only four.


August 23, 2002

Weill role in Salomon deal probed

N.Y. examining whether Citigroup chief pressured analyst


The New York state attorney general’s office, broadening its inquiry into research practices at Salomon Smith Barney, is examining how the Citigroup Inc. unit won a lucrative financing assignment from AT&T Corp. and what role Citigroup Chief Executive Sanford Weill may have played, people familiar with the matter say.

THE BIG securities firm was one of three top underwriters on a huge April 2000 transaction, in which AT&T offered a then-record $10.62 billion “tracking” stock to finance its wireless-phone unit. The deal also produced one of the biggest paydays ever on Wall Street: nearly $45 million in fees each for Salomon Smith Barney and the two other firms, Goldman Sachs Group Inc. and Merrill Lynch & Co.

But the assignment was controversial from the start. Salomon Smith Barney was selected as a lead underwriter only after Salomon telecom analyst Jack Grubman upgraded his rating on AT&T to a “buy.” For years, Mr. Grubman had been bearish on AT&T stock, and Salomon often had been excluded from top spots in underwriting AT&T transactions. And, as reported in The Wall Street Journal at the time, the change by Mr. Grubman came after Mr. Weill, an AT&T board member, nudged the analyst to give AT&T a fresh hearing, people familiar with the deal said.

AT&T Chairman C. Michael Armstrong regularly had asked Mr. Weill to urge Mr. Grubman to revisit the merits of AT&T’s cable strategy, a person familiar with the matter says. Mr. Armstrong also was a Citigroup board member at the time.

Now, New York Attorney General Eliot Spitzer is investigating the transaction and the activities of Messrs. Grubman and Weill, among others, as part of a broad investigation into whether Wall Street firms violated New York State laws by hyping stocks of companies that also were investment-banking clients, possibly misleading investors in the process.


More broadly, the focus on the AT&T deal highlights Mr. Spitzer’s interest in addressing the myriad conflicts facing major financial institutions.

Many of these conflicts have come in the aftermath of the breakdown of the Glass-Steagall Act, the Depression-era legislation that separated the business of bank lending from investment banking, and have helped roil the markets in the wake of the collapse of Enron Corp.

Mr. Spitzer, according to people close to the inquiry, is concerned that the creation of such financial behemoths could create the incentive for conflicts that ultimately hurt consumers who are unaware that certain firms have lucrative, multiple relationships with corporations as they issue research reports to their clients. Mr. Spitzer, these people say, is considering using his investigative findings to demonstrate that conflicts abound at such big companies, and he plans to push for safeguards that will prevent alleged conflicts in the future, these people say….

Mr. Grubman, who left Salomon Smith Barney last week amid numerous investigations into his research efforts, currently is at the center of Mr. Spitzer’s investigation, possibly the most aggressive into conflicts of interest involving Wall Street research. Other investigations on analyst conflicts currently are being conducted by Congress, as well as the Securities and Exchange Commission and the National Association of Securities Dealers, both of which regulate Wall Street securities firms.


The AT&T development underscores the extent to which Mr. Spitzer’s investigation has broadened beyond Mr. Grubman, to include other high-ranking people at the firm. Investigators for Mr. Spitzer’s office are interested in finding out what role, if any, Mr. Weill played in getting Mr. Grubman to change his mind on AT&T before the underwriter selection, as well as detailing the conversations between Messrs. Weill and Armstrong about Mr. Grubman’s research.

AT&T isn’t a focus of Mr. Spitzer’s examination, people close to the inquiry say. In a statement, a spokeswoman says AT&T’s “relationship with [Salomon Smith Barney] dates back many years even before that company took its current form. We have a very strong method and process for selecting underwriters. [Salomon Smith Barney] has an extensive distribution channel and its retail relationships are critical when considering any major security deal.” Mr. Grubman has had a tumultuous relationship with AT&T. He joined the big telephone concern in 1977, just as the telecommunications industry began to take off. At one point, he butted heads with the company’s top brass when he found a flaw in the company’s economic model. In 1985 he began his career on Wall Street, where he quickly established himself as one of the nation’s top telecom analysts as well as one of Wall Street’s leading critics of AT&T.

Mr. Grubman believed AT&T was out of step with the changing telecom climate. While his bearish stance on the company won him kudos from money managers as shares of AT&T struggled, Salomon’s bankers took it on the chin when AT&T went looking for underwriters.

In 1996, for example, about a year after Mr. Grubman downgraded AT&T, Salomon was one of two major Wall Street firms denied the top underwriting spots for Lucent Technologies, a $3 billion AT&T spinoff.

So it raised eyebrows when Mr. Grubman shifted his views before the big AT&T stock deal in 2000. When AT&T announced in late 1999 it was planning to issue stock to spin off a new wireless-telephone unit, Salomon was eager to win a lead role. The deal was rumored to be among Wall Street’s largest ever — more than $10 billion. A deal of that size would generate more than $250 million of fees for underwriters.


But Mr. Grubman’s continued negative view on AT&T irked Mr. Armstrong, the CEO, people familiar with the matter say. In internal meetings, Mr. Armstrong told associates he believed Mr. Grubman’s position on the firm was misguided, according to a person familiar with the situation. Mr. Armstrong also complained to Mr. Weill at times, urging him to temper Mr. Grubman’s criticisms of the firm, said another person.

Around the time AT&T decided to issue the stock for its wireless unit, the firm attempted to persuade Mr. Grubman to change his rating. People familiar with the matter say Mr. Grubman was called to a special meeting so top company executives could provide an analysis as to why the company deserved a better rating, they add.

After hearing of the criticism from Mr. Armstrong, Mr. Weill prodded Mr. Grubman to take another look at his view of AT&T, these people say. The spokeswoman for Mr. Armstrong declined to comment on the matter. At the time, AT&T scoffed at any suggestion that it granted Salomon the banking assignment because of Mr. Grubman’s changed views.

So did Mr. Grubman. He said at the time: “Anyone who knows me knows that I call them as I see them.”

In October of 2000, several months after the AT&T stock deal — and after Salomon received $44.8 million in fees for its role in it — Mr. Grubman downgraded the stock once again.

Copyright © 2002 Dow Jones & Company, Inc., All Rights Reserved.


August 8, 2002

Lawmaker Seeks Inquiry of Rubin Intervention for Enron

Fox News

WASHINGTON —— A House Republican lawmaker is seeking an investigation into phone calls made on behalf of Enron Corp. to the Bush administration by former Treasury Secretary Robert Rubin.

Rep. Mark Foley, R-Fla., wants the Securities and Exchange Commission to look into the phone call, alleging that Rubin was attempting to tamper with Enron’s credit rating.

“A former Treasury Secretary should not be soliciting financially-beneficial favors from colleagues at an agency that he once led,” Foley wrote in a letter to SEC Chairman Harvey Pitt.

“I would ask that you would investigate all equity trades submitted by Citigroup or its subsidiaries and their clients in the two weeks preceding Mr. Rubin’s call to Mr. Fisher as well as the two weeks following the call,” the letter reads.

In his capacity as head of Citigroup, Rubin allegedly called Treasury Undersecretary of Domestic Finance Peter Fisher last November to see whether Fisher thought it would be a good idea for the Treasury Department to call bond rating agencies to halt an expected reduction in Enron’s credit rating.

Former energy giant Enron declared bankruptcy last December after it revealed that it had been using capital accounts to cover for losses in its operating accounts. Its collapse was the first in a string of corporate scandals that has claimed Tyco International, Global Crossing, WorldCom and others.

Enron’s credit rating and condition was very much on the minds of Citigroup because Enron is a huge client of the bank. Citigroup has millions of dollars of loans with Enron, and such an intervention on behalf of the Treasury to bolster Enron would have benefited both the bank and the energy firm.

The Treasury Department did nothing about the call, but Foley told Fox News that he wants to know whether Rubin or anyone else at Citigroup profited from insider knowledge of Enron’s imminent demise.

“That’s the timing issue that’s critical, people were caught in the exits trying to sell their shares, there was no market. I want to make sure the fat cats, if you will, didn’t prematurely sell their shares knowing of the deteriorating conditions,” Foley said, adding that he is not alleging that Rubin participated in any criminal wrongdoing.

Senate Democrats have called Citigroup officials to testify about the relationship between the bank and the energy giant, but have not called Rubin specifically.

Democrats ask if Rubin is so important, why have Republicans who lead the House not bothered to call him to testify. Republicans say they will leave that open as an option.

Fox News’ Major Garrett contributed to this report.

For more, GO TO > > > The Story of Enron; Claims By Harmon; Dirty Money, Dirty Politics & Bishop Estate; Dirty Gold in Goldman Sachs; RICO in Paradise


June 19, 2002

Apartheid victims sue Citigroup,
other banks


NEW YORK — Four apartheid victims filed suit on Wednesday against Citigroup Inc.(NYSE:C), UBS AG (VX:UBSZn) and Credit Suisse, alleging the banking companies helped finance the violent South African apartheid regime and made billions in loans to further its crimes against humanity.

The lawsuit, filed in Manhattan federal court, seeks class- action status on behalf of other victims of human rights violations under South Africa’s apartheid, a government policy of white rule and racial discrimination against black Africans, who were denied basic rights and beaten or killed when they protested the country’s unjust laws.

The suit seeks unspecified damages to be determined at trial.

The plaintiffs also ask the court to order the defendants to produce documents related to their commercial and financial activities in South Africa from 1948 forward. They also want the creation of an independent international commission to provide an accounting of profits that may have been unjustly obtained by the defendants.

Two of the named plaintiffs said they were tortured and two of the plaintiffs are surviving parents of children who were killed in South Africa.

The suit alleges that the defendants had conspired with each other to provide financing for technology systems, equipment and other products used by the apartheid regime to commit crimes against humanity from 1948 to 1993. It further alleges that despite the fact that apartheid officially ended in South Africa in 1994, the defendants continue to profit from the conspiracy.

“As a direct and proximate result of defendants’ actions, the apartheid system was supported and enabled to continue its systematic murders, massacres, killings, imprisonments, torture and forced removals,” the suit alleged.


A Citigroup spokesperson said the company had not seen the suit yet, but added: “Based on the allegations we have seen, we believe such a suit would have no merit.”

The suit proposes that claimants be organized into five different classes: surviving parents; surviving children or dependents; surviving spouses; torture victims and imprisoned persons.

It said the individual classes include hundreds of thousands, if not millions, of South Africans.


According to the suit, one of the U.S. banks that allegedly provided the most support during apartheid and which violated the financial sanctions campaign restriction was a predecessor of Citigroup. The suit alleged that loans made from 1960 to 1993 supported the regime.

“Predecessors of Citigroup provided Apartheid with in excess of $650 million in principal alone. This amount represented about one-fourth of all loans made by U.S. banks to support apartheid, the military, police and cooperating business,” the suit said.

It alleged that instead of ceasing their lending practices and demanding repayment of outstanding monies, Citigroup’s predecessors converted loans to long-term loans that could be paid back later with interest.

“The money from predecessors of Citigroup directly benefited and supported the apartheid reign of terror in South Africa,” the lawsuit said.

When Fagan began the news conference in Zurich, a jeering crowd forced him to move from the Paradeplatz, where Credit Suisse and UBS, Switzerland’s two biggest banks, have formidable presences. Credit Suisse is headquartered in the Paradeplatz, while the main Zurich offices of UBS are located in the office complex. Hecklers were angered at what they saw as just another attempt to smear the country’s good name.

On Tuesday, Washington, D.C., lawyer Michael Hausfeld, a prominent plaintiffs’ lawyer, said he is working with a group of about 20 lawyers and academics to file a different suit on behalf of apartheid victims. He said he expects the suit will be filed at the end of the summer after it is thoroughly researched.

He had criticized Fagan’s suit as premature and said it denigrated the entire issue by trying to hold a small number of companies responsible for the “entirety of evil.”

Copyright 2002 Reuters Limited. All rights reserved.


Citigroup Awarded “Honor” as World’s Most Destructive Bank

Source: Rainforest Action Network

August 2, 2000

US Top Bank Scores High Marks for Campaign Finance Corruption and Environmental Destruction. Rally unites globalization, human rights and environmental activists with urban community, youth and people of color advocates.

Philadelphia — As Republican delegates continued their week of partisan pomp inside the RNC Convention, a broad coalition of activists took their message to the source of campaign finance corruption highlighted during the summers political conventions: Americas top corporations.

Outside of the local headquarters of Citigroups subsidiary Salomon Smith Barney, the country’s largest bank was honored with the award for the World’s Most Destructive Bank, earning this distinction for its role the buy-out of the country’s elected political leaders and its unsurpassed contribution to the financing of socially and environmentally destructive projects.

Citigroup has rightfully earned a triple A credit rating as the worlds most destructive and corrupting bank, said Erick Brownstein of the Rainforest Action Network. Whether it is buying influence with Republican and Democratic officials, financing the most environmentally egregious projects abroad, or employing predatory lending practices here at home, Citigroup comes out Number One in a highly competitive private finance industry.

During Citigroup’s award ceremony, environmental and community advocates pointed to corporation’s nefarious role in campaign finance corruption and destructive funding.

Citigroup’s funding for corporate prisons, Third World debt, genetic engineering, and rainforest destruction won the company its dubious prize today, according to representatives from organizations including ACT UP Philadelphia, 50 Years is Enough, Association of Community Organizations for Reform Now (ACORN), Just Act Youth Action for Global Justice, Student Environmental Action Coalition (SEAC), and Rainforest Action Network.

The time is now for Citigroup to stop underwriting campaign finance corruption, predatory lending and destructive projects, said Kelly Nagy from SEAC. Big banks buy-out of politicians is bad for our communities and our environment.

Citigroup has contributed over $2 million to the Republican and Democratic parties in the last two years as well as spending $17 million on lobbying costs since 1997.

Citigroup used their campaign contributions to buy the very changes in the law which allowed the Citibank/Travelers merger by repealing parts of the Glass-Steagle Act.

It’s outrageous that we are allowing giant destructive corporations to buy off our political system. It amounts to nothing more than legal bribery.

I never voted for Citigroup. said Patrick Reinsborough from the Rainforest Action Network.

– For more information about Citigroup’s destructive activities, please visit the Rainforest Action Network Website . . .

For more on the destruction of our environment, GO TO > > > Heavens & Earth


All Hell Breaks Loose


Michael C. Ruppert

May 31, 2001 –

These are nightmares come true.

Citibank buys Banamex – Mexico’s second largest bank – for $12.5 billion and Asa Hutchinson is appointed head of the Drug Enforcement Administration.

The level of criminality in the US financial and political systems has reached a threshold where it can no longer be spun into something which John Q Public can ignore and where US drug “enforcement” efforts are now revealed to be nothing more than a reaction to the imperative of “managing” the drug trade so as not to lose control of the trillions of dollars at stake.

Crime has become, overtly, the largest free enterprise in the world.

On May 17 Citigroup, America’s largest financial institution commanding some $700 billion in assets announced a $12.5 billion purchase of Banamex’s parent company controlling some $39 billion in assets. The move will place Citigroup in control of one of the major – and proven – money laundering institutions in Mexico and allow Citigroup (first time for a US company) to penetrate the Mexican stock market.

Now consider that Citigroup has on its Board of Directors the likes of Robert Rubin (former US treasury Secretary), John Deutch (former CIA Director) and Gerald Ford.

In 1999 Citigroup was slammed by the Congress and the GAO for laundering (1994) more than $100 million in drug money for Raul Salinas, brother of the Mexican president.

It was also found to be complicit in the laundering of money for corrupt officials from Nigeria, Pakistan, and Gabon through its exclusive private banking operations for the rich.

The Peruvian journal La Republica, on May 21, disclosed that until last year Peruvian strongman and CIA creation Valdimirio Montesinos had moved more than $18 million through Citibank.

Montesinos, a former drug lawyer and graduate of the School of the Americas, was until then the national security chief for Peruvian President Alberto Fujimori. News reports by Peter Gorman, published at have strongly indicated that Montesinos managed the “silent-coup” that overthrew Fujimori after Fujimori decided to oppose US intervention in Colombia….

In 2000, then Treasury Secretary Rubin led an “all out” offensive (Operation Casablanca) against Mexican money laundering. One of the banks targeted was Banamex which was exposed as being a willing participant in the trade. U.S. Customs Agent Bill Gately, who later retired in disgust, accused Rubinof deliberately shutting down the investigation before it got to the highest levels. He did it on 60 Minutes.

Could Rubin, knowing that he would soon be at Citigroup, have been softening up Banamex for the buyout to gain control of the drug flows?

The Citigroup dirt descends to even the personal level as Marc Weill, 44, the son of Chairman Sandy Weill, was exposed in the AP last November as having a cocaine addiction which necessitated that he relinquish control of Citigroup’s $113 billion investment portfolio.

Consider also, that John Deutch, who joined Citigroup in 1996, brought with him the former Executive Director of the CIA, Nora Slatkin as an alleged quid pro quo for her stalling an investigation into Deutch’s mishandling of thousands of pages of CIA files. Did Citibank get the files?

Banamex owner Roberto Hernandez is overtly connected to drugs. He will now join Citibank’s board.

After having lost a Mexican lawsuit against Por Esto Publisher Mario Menendez in which the courts found that Por Esto’s allegations connecting Hernandez to hundreds of tons of cocaine smuggling near Cancun were valid, Hernandez went on to sue Menendez and veteran journalist Al Giordano in New York State [FTW – Feb, 2001]. That suit has sparked a huge public outcry and garnered Giordano and Menendez the support of some of the most powerful lawyers in America.

Known locally as the “Cocaine Peninsula,” Hernandez’s property in Yucatan has been photographed littered with smuggling equipment yet it has served as a vacation spot for Mexico’s president-elect Vicente Fox, (July, 2000) and President Bill Clinton (August, 2000). In true bi-partisan spirit, however, Fox shared Dallas-based media adviser Robert Allyn with candidate George W. Bush throughout their respective 2000 campaigns.

To complete his end of the Citigroup transaction Hernandez relied upon the brokerage house of Goldman Sachs (once headed by Rubin) and the Wall Street law firm of Sullivan, Cromwell.

Sullivan, Cromwell is a CIA affiliate which gave us Allen Dulles (CIA Director) and John Foster Dulles (Secretary of State).

As for Asa Hutchinson, the Republican Congressman from Arkansas whom President Bush has nominated to head the DEA, nothing speaks more eloquently of the outrage than the words of veteran Arkansas journalist Mara Leveritt ….

His complicity in covering up an enormous volume of cocaine smuggling in Mena, Arkansas connected to the Contra war is “slap-in-the-face” obvious. No more can the Democratic side of Congress react to Mena as a right-wing conspiracy. This time the dirt lies on a member of the “Shi-ite” faction of the Republican Party.

It doesn’t matter anymore whether the American public chooses to notice. The fait accompli is that drug money and criminal money are now out of the closet as the most important determinants of economic success for the US financial system. The careless arrogance of these moves only reveals the utter confidence in Washington, on Wall Street and in the banking system that no voices from the wilderness can stop it.

Will the defection of Vermont Senator Jim Jeffords out of the Republican Party on May 24 make a difference? Sure the Democrats will now control the committees overseeing the Citigroup buyout and the Hutchinson confirmation.

But the scythe of dirty money has cut heavily down both sides of the aisle. — I’m not holding my breath.

Mike Ruppert — 5/31/01

[Copyright 2001. Michael C. Ruppert and From The Wilderness Publications. This story appeared as the lead essay in the May 31, 2001 issue.]

For more on Goldman Sachs, GO TO > > > Dirty Gold in Goldman Sachs


May 9, 2002

Travelers Property Casualty Names
New Board Members

HARTFORD, Conn. (BUSINESS WIRE) – Travelers Property Casualty is pleased to announce that Frank J. Tasco, Leslie B. Disharoon and Kenneth J. Bialkin have joined the company’s Board of Directors. The new Directors have agreed to serve until Citigroup completes its previously announced tax-free distribution.

Mr. Tasco is the former Chairman of the Board and Chief Executive Officer of Marsh & McLennan Companies, Inc. and served as a Travelers Property Casualty Director from 1996 until 2000. He also served as a Director of Travelers Group (a Citigroup predecessor company) from 1992 to 1998 and was Chairman of the Board of Directors of Angram, Inc.

Mr. Disharoon is the former Chairman of the Board, President and Chief Executive Officer of Monumental Corporation. He became a Travelers Group Director in 1986 and served until 1998. He served as a Directors of Travelers Property Casualty from 1996 to 2000 and has served on the boards of Aegon, USA, Inc., GRC International Inc., and Johns Hopkins Hospital Endowment.

Mr. Bialkin, a partner at Skadden, Arps, Slate, Meagher & Flom LLP, served as a Director of Travelers Property Casualty from 1996 to 2000. Other directorships have included Citigroup and The Municipal Assistance Corporation for the City of New York. . . .

Copyright 2002, Business Wire

For more on Marsh & McLennan, GO TO > > > The Marsh Birds


February 21, 2002

U.S. OKs Icahn Bid For ImClone

Corporate raider Carl Icahn doesn’t sulk when a plan sours–he finds a new one. Mere days after withdrawing his bid from Shelbourne Properties, he’s on the hunt; and U.S. antitrust enforcers said they will not obstruct Icahn’s bid to buy a hefty stake in ImClone Systems . Recently, he filed with U.S. securities regulators to acquire $500 million of ImClone’s shares, or nearly 40% of the company.

Icahn, 66, is known for his attempts to take over or force the breakup of companies such as Nabisco Group Holdings and now-defunct Trans World Airlines. A long-time friend of ImClone Chief Executive Samuel Waksal, the raider bought a 5% stake in the medical company in 1999. The bid comes at a crucial time: currently, ImClone is battling drug giant Bristol-Myers Squibb for control of their Erbitux cancer drug….

Former Enron Chief Executive Kenneth Lay offered then-Treasury Secretary Robert Rubin a seat on the board of directors in 1999, a time when the energy trader was lobbying hard against efforts to regulate its derivatives-trading business. Newly released documents suggest Lay offered Rubin a seat on the Enron board two days after the latter announced he was resigning as President Bill Clinton’s treasury secretary. Ever ambidextrous, Lay also sought help from officials of the George W. Bush administration last fall, before the company filed for bankruptcy protection.

Sources say on the same day Lay made the offer to Rubin he sent a letter to congratulate Lawrence Summers, the incoming Treasury secretary. A few months after, Lay referred to his connections with Rubin in a letter to Summers, urging Treasury officials to back off from proposals to regulate Enron’s derivatives trades.

Rubin, now a Citigroup executive, had turned down the offer. Citigroup is one of Enron’s main creditors….


April 10, 2002

Ed McMahon Sues Over Toxic Mold
in L.A. Home

By Sarah Tippit

LOS ANGELES (Reuters) – As Johnny Carson’s sidekick, entertainer Ed McMahon was famed for his infectious laugh. But as a homeowner, he says he is involved in a drama that has left him seething.

McMahon, 79, is suing his home insurance company for $20 million, claiming it botched a simple repair on a broken pipe and, as a result, allowed a toxic mold to spread through his house, making his family sick and killing his dog.

In a lawsuit filed on Monday in Los Angeles Superior Court, McMahon, who for years served as Carson’s sidekick on NBC’s “Tonight Show,” said he, his wife Pamela, and household staff members have been battling illnesses as a result of exposure to a mold known as stachybotrus chartarum.

He also said the family dog, Muffin, died as a result of a mold-induced infection.

The suit is the latest in a recent spate of litigation over toxic mold infestation, a recently recognized phenomenon, which is believed to cause serious illness particularly in the respiratory tract, and even death.

It names Scottsdale, Arizona-based American Equity Insurance Co., a unit of Citigroup Inc. as a plaintiff as well as several Southern California contractors who had been hired to clean up the mold. A spokeswoman for American Equity declined to comment on Wednesday.

According to the suit, a pipe burst last July in McMahon’s estate in the posh Coldwater Canyon section of Los Angeles, causing his den to be flooded. McMahon made a claim under his policy with American Equity, which arranged to clean up the damage caused by the flooding.

“What started out as a simple plumbing leak ended up a horrific nightmare only Steven King could write about,” McMahon’s lawyer Allan Browne told Reuters. He added the mold spread through the house with a high concentration in the main bedroom.

The lawsuit charges that the contractors painted over visible mold and failed to provide the McMahons with environmental reports related to the levels of mold infestation despite repeated requests for documentation.

In addition, another contractor hired by the insurer to store the McMahons’ furniture, artwork and television memorabilia has not to date returned the items despite repeated requests to do so, and the McMahons do not know where their belongings are being stored, Browne said.

“They took away 50 years of memorabilia, all of their fine art, all of the couches, chairs, every stick of furniture, we don’t even know where any of that is located. The clothes were taken out and they were supposedly cleaned and it took months to get them back and once they got them back we found out cleaning had been done improperly. … It’s just been a nightmare,” Browne added.

© Copyright Reuters 2002. All rights reserved. (


December 21, 2001

S&P comments on Enron-related
insurer lawsuits

NEW YORK (Standard & Poor’s) Dec. 21, 2001 – Standard & Poor’s today commented on the insurance industry in the wake of J.P. Morgan Chase & Co.’s announcement that it has filed lawsuits against several large insurance companies – including Chubb Corp., CNA Financial Corp. and Travelers Property Casualty Corp.

These insurers had issued surety bonds that guaranteed various assets of Enron Corp., which filed for bankruptcy earlier this month.

At this time, it is unclear what impact, if any, these lawsuits will have on the ratings on various insurers. Standard & Poor’s will continue to monitor the situation, particularly with respect to the insurers that are the largest issuers of surety bonds, and will make further comments when appropriate….

Copyright 2001, Reuters News Service

For more, GO TO > > > The Story of Enron; The Chubb Group; Dirty Money, Dirty Politics and Bishop Estate; Transylvania Travelers in St. Paul


December 21, 2001

XL exposure to Enron $75 million

(Business News) – Contrary to earlier indications, XL Capital Ltd. said its exposure to claims arising from the bankruptcy of energy trader Enron Corp (ENE) might total $75 million, but it said it could not yet estimate its Enron losses.

XL said it faced about $45 million in exposure to surety bonds and could face further large payouts on liability policies if Enron’s directors are successfully sued….

For more, GO TO > > > The Marsh Birds; Confessions of a Whistleblower


November 30, 2000

Citigroup Called Lax On
Money Laundering

By Kathleen Day. Washington Post Staff Writer

Citigroup, the nation’s largest bank, failed to follow federal guidelines to prevent money laundering and allowed as much as $800 million in suspicious Russian funds to flow through 136 accounts from 1991 through January of this year, the General Accounting Office said yesterday.

The GAO, the investigative arm of Congress, said it has referred the matter to bank regulators and the Justice Department for further investigation. In a letter to the GAO this week, Citigroup said it has found no evidence that it acted illegally, but it acknowledged lapses in enforcing its anti-money-laundering policies. It said it has closed the accounts in question this year and tightened policies to prevent the problem from recurring.

The GAO report, based on an eight-month investigation, said a second bank, Commercial Bank of San Francisco, allowed $600 million in suspicious Russian funds to flow through 100 accounts because of lax enforcement.

“To our knowledge there was no illegality by us,” said Rob Fuller, former president of Commercial Bank, which has been sold to First Banks America Inc. of St. Louis. He said the bank closed the accounts in the first half of 1999 and decided in June to stop taking deposits from “Eastern European sources” completely.

Before the GAO began its investigation in March, he said, “we had already tightened our know-your-customer rules.”

All told, Citigroup and Commercial Bank accepted more than $1 billion from U.S. corporations based in Delaware that appeared to be shell companies created to move money from abroad into the U.S. banking system, the GAO said.

The corporations in Delaware received the money from Russian brokers in Eastern Europe who were acting on behalf of Russian companies or individuals, the GAO said. The two U.S. banks then facilitated the corporations’ transfer of most of the money from the United States back into foreign accounts.

The arrangement presumably was made to evade taxes, according to a source familiar with the GAO report, but could have involved organized crime in Russia.

In accepting the money, both banks violated the bank industry standard known as the know-your-customer rule, which requires banks to understand who their clients are and the source of their funds, the GAO report said.

“These banking activities raise questions about whether the U.S. banks were used to launder money,” the GAO report said.

It concluded that “it is relatively easy for foreign individuals to hide their identities while forming shell corporations that can be used for the purposes of laundering money.”

The GAO report is embarrassing for Citigroup, which has been the subject of money-laundering probes by the government since the mid-1990s.

Just a year ago, top Citigroup officials were grilled before a Senate subcommittee about the possible laundering of $100 million in Mexican drug money. At the time, bank officials promised lawmakers that failures in the company’s policies had been repaired and that the company was confident it could guard against being used by foreigners to launder funds.

“As we have said in the past,” Michael A. Ross, general counsel of Citigroup’s global consumer banking business, wrote to the GAO this week, “Citibank is committed to being at the forefront of anti-money-laundering efforts.”

The report also is embarrassing for bank regulators and other federal officials, who have been criticized by Congress and the inspector general of the Treasury Department for being lax in stopping stop money laundering.

The Treasury has spearheaded a much-publicized effort to crack down on money laundering, which it has called a scourge of U.S. business, but officials there repeatedly have declined to comment on why no top bank official or major bank has ever been seriously sanctioned for money laundering.

The GAO study was done at the request of the Senate Governmental Affairs Committee’s permanent subcommittee on investigations.

© 2000 The Washington Post Company


The Crimes of Citibank …

More CIA Connections


By Michael C. Ruppert –

From the May 31, 2001 issue of “From The Wilderness”

Special to NarcoNews – As the remaining unbiased press of the Western Hemisphere, and especially of Latin America, rises in outrage at the announced May 17 purchase of Mexico’s giant Banacci Group (Banamex) by Citigroup, more skeletons come stampeding out of the Citigroup closet.

Both banks have been firmly connected to drug money laundering and Banamex owner Roberto Hernandez owns land near Cancun, Mexico that is commonly referred to as “the cocaine peninsula.” President Bill Clinton vacationed on the Hernandez property in the summer of 2000.

Taken collectively these skeletons reveal a well-defined financial and intelligence infrastructure that appears tailor-made for the global management of the drug trade’s billions of dollars in illegal revenue along with the additional billions of dollars generated annually by the illegal looting of national economies by government officials.

One of these skeletons is Nora Slatkin. Having risen to a post as Assistant Secretary of the Navy for Acquisition in 1995 she resigned and was immediately appointed as the Executive Director of the Central Intelligence Agency. The Executive Director is the number three position at Langley and is responsible for all Agency operations. Her boss was then Director of Central Intelligence (DCI) and current Citigroup Board Member John Deutch.

The timeline – as compiled from stories in The New York Times, The Washington Post and AP and the CIA’s web site – around her tenure at CIA and of her transition to Citigroup is most revealing.

>> May 10, 1995 – John Deutch sworn in as DCI.

>> May 19, 1995 – The Senate announces that Nora Slatkin is leaving the Department of Defense (Assistant Secretary of the Navy) to join the CIA as Executive Director.

>> December 15, 1996 – Deutch resigns as DCI.

>> December 17, 1996 – A CIA computer security official visits Deutch’s home and discovers thousands of pages of classified documents on unsecured (CIA) Macintosh computers. Almost immediately the CIA General Counsel, Tom O’Neil and Nora Slatkin are advised of the breach. Slatkin advises DCI Tenet.

>> December, 1996 – Deutch joins the Board at Citigroup.

>> Dec. 20 ,1996 – Deutch begins deleting files from his computers.

>> January, 1997 – CIA security officials complain to Slatkin that O’Neil is dragging his feet. Slatkin takes no action in response, except to “hold discussions.” Deutch refuses to be interviewed by security staff.

>> Summer, 1997 – The CIA security staff completes a report on Deutch which languishes in the security office awaiting action.

>> Fall, 1997 – Claiming ignorance of the security office’s investigation, DCI Tenet grants Deutch new security clearances.

>> October, 1997 – On Deutch’s recommendation Slatkin also joins the Board at Citigroup. Her current title – Senior Manger of Government Relations.

>> December, 1997 – Because the Justice Department has not been notified, a one-year statute of limitations for the appointment of an independent counsel to investigate Deutch lapses

>> March, 1998 – After seven years of service, CIA Inspector General Frederick P. Hitz retires to assume the Goldman Sachs Chair on International Intelligence at Princeton University. He later tells The New York Times that he assumed that his successor, Britt Snider, would advise the Department of Justice as to Deutch’s possible criminal mishandling of CIA records. Oops!

>> April, 1999 – Janet Reno’s Justice Department declines to prosecute Deutch while nuclear scientist Wen Ho Lee languishes in jail for similar violations.

>> February, 2000 – After a CIA Inspector General’s report on Deutch’s conduct leaks to the press Janet Reno reopens the investigation. Prosecutor Paul Coffey recommends criminal charges.

>> March, 2000 – Slatkin and Hitz contradict Tenet and state that he was much more involved than previously admitted.

>> Summer/Fall 2000 – The criminal investigation of Deutch inches ahead in secret. Fears mount that John Ashcroft, as Bush Attorney general, will aggressively pursue criminal charges.

>> January 20, 2001On his last day in office President Clinton pardons Citibank Director John Deutch.

Given the enormity of documentation on Citibank’s direct involvement with drug and criminal money laundering and the extraordinarily detailed investigations by journalist Al Giordano at, several questions become obvious. Giordano’s translation of Spanish language reports on the on again, off again relationship between Citibank and Peruvian CIA backed strongman Vladimiro Montesinos, suggest that CIA tells Citibank which criminal clients are acceptable for Private Banking money laundering activities.

Clearly, the timeline implies that Slatkin’s hiring at Citibank was a quid pro quo for her services in stalling the Deutch investigation. But more so it raises the question as to whether Slatkin is the CIA liaison at Citigroup to open approved channels for money laundering.

Also, it must be asked whether or not there is a partisan flavor to Citigroup’s activities. All of the players here were Democratic Party apparatchiks. Is the Democratic Party the sole beneficiary of Citigroup criminal money laundering? Much will be revealed when the Bush Administration weighs in on the Banamex acquisition.


John M. Deutch is listed as a current director of the following corporations that are registered with the SEC:

Ariad Pharmaceuticals Inc.

Citigroup Inc.

CMS Energy Corp

Cummins Engine Co Inc

Raytheon Co

Schlumberger Ltd/NY/

He is also involved with the following ventures (some offshoots of above corporations) as an investor and/or officer:

Allied Digital Technologies Corp

Analog Acquisition Corp

Buenos Aires Bottling Co Inc


Citicorp Mortgage Securities Inc

Citigroup Capital

CMS Energy Trust II

CMS Energy X Tras Pass Through Trust I

Consumers Energy Co

Cort Business Services Corp

Davco Restaurants Inc

Delco Remy International Inc

Galey & Lord Inc.

GNI Group Inc

Green I Acquisition Corp

Hudson Hotels Corp

Landmark Fixed Income Funds/MA/

Landmark Funds I

Landmark Funds II

Landmark Tax Free Income Funds

Palomar Medical Technologies Inc.

Sybron Chemicals Inc.

Tower Automotive Inc

Travelers Group Inc

~ ~ ~
Michael C. Ruppert
P.O. Box 6061-350, Sherman Oaks, CA 91413
(818)788-8791 * fax(818)981-2847

May 19, 2001

“Dirty Money” Foundation of US Growth and Empire

Size and Scope of Money Laundering by US Banks

From La Journada [Mexico]

by James Petras – Professor of Sociology, Binghamton University

— 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.

“This Goes Straight to the Top.”

— 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


May 25, 1999


By Peter Wagner, Star-Bulletin

A $4.5 million Singapore residence belonging to Indonesian businessman Sukamto Sia will likely be recovered by Citibank N.A. Hong Kong, not a trustee looking for assets to liquidate in Sia’s bankruptcy.

Guido Giacometti, the court-appointed trustee in Sia’s Chapter 7 case in Honolulu, last week dropped opposition to the bank’s effort to claim the property, still under the jurisdiction of U.S. Bankruptcy Court.

But even if U.S. Bankruptcy Judge Lloyd King frees the property, the bank still must seek clearance from a Singapore court also claiming jurisdiction over Sia’s Singapore property.

The unoccupied residence, at 16 Bishopsgate, is one of two Singapore properties shown among Sia’s assets in his November bankruptcy filing. The case, which began as a Chapter 11 reorganization before being converted to a Chapter 7 liquidation last week, shows Sia with $9.3 million in assets and $296.4 million in debts. The second property, at 5 Balmoral Road, is valued at about $800,000.

The more valuable property, held by Citibank as collateral of $7 million in loans to Sia, contributes nothing to his assets because Sia has no equity in the property, the bank says.

Among Sia’s biggest properties in Hawaii are the Bank of Honolulu and Executive Centre Hotel. Sia holds 76 percent of shares in the bank, pledged to two foreign banks: Commerzbank and Societe Generale….

Executive Centre, meanwhile, is the subject of two foreclosure lawsuits.


April 11, 2000


By Peter Wagner, Honolulu Star-Bulletin

A sleek downtown high-rise once owned by international investor Sukamto Sia would change hands, yielding about $500,000 to his bankruptcy estate, under a plan to be considered in U.S. Bankruptcy Court next week.

It won’t put much of a dent in Sia’s $296.4 million debt, but the deal offers the largest payout to date in a difficult effort to find the high-spending businessman’s unencumbered assets around the world.

The plan would transfer the ownership on the heavily mortgaged Executive Center on Bishop Street to prime lender Citibank N.A., holding $56.6 million in loans against the 41-story tower.

If approved, the plan would avoid a pending foreclosure suit filed against the property by Citibank a month after went into bankruptcy in November 1998.

“It isn’t much,” said Guido Giacometti, trustee in Sia’s ongoing Chapter 7 bankruptcy. “Everybody’s taking a haircut.”

None more so than Citibank, which agreed to reduce outstanding debt from $56.6 million to $39 million, a $17.6 million loss if the plan is approved.

“Life is not always fair,” said Citibank attorney Tom Roesser….

The $500,000 to be paid into the bankruptcy estate would come from Executive Centre’s cash reserves in settlement of a dispute over a $3 million secondary mortgage.

The mortgage, transferred by Sia to a British Virgin Islands corporation called A-B-C Pacific Ltd. shortly before his 1998 bankruptcy, had been sought as part of the estate by the bankruptcy trustee.

Executive Centre, formerly owned by MKS Executive Partners, a Sia holding, is one of Sia’s two major holdings in Hawaii. The high-rise houses a 120-room Aston hotel, several retail outlets including Long’s Drugs and Ross Dress For Less, and 379 residential units.

The other key property is Sia’s 74 percent stake in the Bank of Honolulu, 307,964 shares now held and being marketed by Giacometti…..

Those efforts, which include reclaiming international properties, have so far yielded modest results….

Sia filed for bankruptcy protection from his creditors in November 1998, claiming $9.3 million in assets and more than $296 million in debts. His bankruptcy came weeks after his arrest in Las Vegas for allegedly writing $13.5 million worth of bad checks to pay gambling debts.

Formerly known as Sukarman Sukamto, Sia was a high-profile investor in Hawaii during its “bubble” economy of the 1980s.

Besides buying Executive Centre and numerous residential properties, Sia acquired and later sold to the state the site that now houses the Hawaii Convention Center.

For more, GO TO > > > Sukamto Sia: The Indonesian Connection


Michael C. Ruppert
P.O. Box 6061-350, Sherman Oaks, CA 91413
(818)788-8791 * fax(818)981-2847



From the Multinational Monitor:



The Ten Worst Corporations of 1999

by Russell Mokhiber

As we move to the end of the millennium, it is important to remind ourselves that this has been the century of the corporation, where for-profit, largely unaccountable organizations with unlimited life, size and power, took control of the economy and the political economy — largely to the detriment of the individual consumer, worker, neighbor and citizen.

Let us again remind ourselves that corporations were created by the citizenry. (Thanks here to Richard Grossman and the Project on Corporations Law and Democracy for resurrecting and teaching us a history we would have collectively forgotten.)

In the beginning, we the citizenry created the corporation to do the public’s work — build a canal or a road. >

We asked people with money to build the canal or road. If anything went wrong, the liability of these people with money — shareholders, we call them — would be limited to the amount of money they invested and no more. This limited liability corporation is the bedrock of the market economy. The markets would deflate like a punctured balloon if corporations were stripped of limited liability for shareholders.

And what do we, the citizenry, get in return for this generous public grant of limited liability? Originally, we told the corporation what to do. Deliver the goods. And then let humans live our lives.

But corporations gained power, broke through democratic controls, and now roam around the world inflicting unspeakable damage on the earth.

Let us count the ways: price-fixing, chemical explosions, mercury poisoning, oil spills, destruction of public transportation systems. Need concrete examples? These could be five of the most egregious of the century . . .


The standard in political corruption

Every once in a while, a major piece of legislation passes the U.S. Congress and even old hands are left shaking their heads. This happens only when new standards of legalized bribery are achieved, when more money corrupts the political process in more egregious ways than had recently been witnessed.

Those old hands were left shaking their heads this fall, after Citigroup and the rest of the financial services industry (banks, insurance companies and securities firms) succeeded in ushering the Financial Services Modernization Act through both houses of Congress and winning President Clinton’s signature.

The finance, insurance and real estate industries together as a sector are regularly the largest campaign contributors and invest more in lobbying than any other sector. They spent more than $200 million on lobbying in 1998, according to the Center for Responsive Politics — a number almost sure to be topped in 1999 — and donated more than $150 million in the 1997-1998 election cycle — a total sure to be exceeded in 1999-2000. Giant campaign contributions flowed especially to the members of the Congressional banking committees as well as the other committees with direct jurisdiction over financial services legislation.

Even more grotesque was the intimate involvement of banking lobbyists in the legislative process. With Citigroup’s co-chair Sandy Weill and lead lobbyist Roger Levy leading the charge, industry executives and lobbyists badgered the administration and swarmed the halls of Congress until the final details of a deal were hammered out, effectively vetting all drafts before they were formally introduced.

As the deal-making on the legislation moved into its final phase — and with fears running high that the entire exercise would collapse — into the breach stepped Robert Rubin. The recently retired Treasury Secretary, Rubin would be announced as the new de facto co-chair of Citigroup just after the legislation passed Congress. He apparently had negotiated the terms of his hiring while negotiating over the legislation.

Citigroup played such a decisive role in the legislative process because its very existence hung in the balance. The product of a merger between Citibank and Travelers, the combination of banking and insurance companies had been illegal under existing law (but excused due to a loophole which provided a two-year review period).

The new legislation repeals the revered Glass-Steagall Act, and will allow such mergers.

Glass-Steagall had reflected the long-standing understanding of the political and economic dangers of financial industry concentration. Its repeal and enactment of the “Citigroup Authorization Act,” will:

1. Pave the way for a new round of record-shattering financial industry mergers, dangerously concentrating political and economic power;

2. Create too-big-to-fail institutions that are someday likely to drain the public treasury as taxpayers bail out imperiled financial giants to protect the stability of the nation’s banking system;

3. Leave financial regulatory authority spread among a half dozen federal and 50 state agencies, all uncoordinated, that will be overmatched by the soon-to-be financial goliaths;

4. Weaken the Community Reinvestment Act (CRA): there will be no ongoing sanctions against holding company banks that fail to meet CRA standards, it will lessen the number of CRA examinations, and provisions of the bill will discourage community groups from challenging banks’ CRA records.

5. Facilitate the rip-off of mutual fund insurance policy holders by permitting mutual insurance funds to switch domicile states — thereby enabling them to locate in states where they can convert to for-profit, stockholder companies without properly reimbursing mutual policyholders (a conversion of tens of billions of dollars);

6. Aggressively intrude on consumer privacy (and promote a still-greater intensification of direct marketing), thanks to provisions permitting the new financial giants to share finance, health, consumer and other personal information among affiliates; and

7. Allow banks to continue to deny services to the poor (Congress rejected an amendment requiring banks to provide “lifeline accounts” to the poor, so they would have refuge from check-cashing operations and the underground economy).

Citigroup and the financial services industry insist the new law will benefit consumers by giving them efficient, one-stop shopping for financial services….

[Just as the Vampire promises eternal life to its prey!]


February 22, 2001


The couple could be charged for perjury

The wife of the deposed Philippines president, Joseph Estrada, made a massive withdrawal from one of her bank accounts earlier this month, according to investigators looking into corruption allegations against Mr Estrada.

Luisa Ejercito, who is running in Senate elections in May, withdrew 109 million pesos ($2.3 million) from a local branch of CITIBANK, shortly before the internal revenue bureau froze her family’s accounts.

The couple could be charged for perjury for failing to declare these assets.

The government ombudsman Aniano Desierto said the confirmation of the withdrawal came from records provided by the bank.

A popular uprising toppled Mr Estrada

Mr. Estrada himself is accused of amassing $400m in unexplained wealth.

On 7 February, opponents of Mr Estrada asked the ombudsman to file a case to recover up to 20 billion pesos ($42.2 million) in property and bank accounts allegedly held by the ousted president and his wife, his mistresses and cronies.

Mr Desierto said Mr Estrada’s acknowledged mistresses are not being investigated, but added that there was evidence some of them had millions of pesos deposited in their accounts.

Corruption scandal

Earlier this week, the Supreme Court barred the ombudsman from filing any charges in court against Mr Estrada for 30 days.

The order was intended to allow the Supreme Court to resolve the issue of his claim that he is still the country’s legitimate leader and therefore immune from prosecution.

Mr. Estrada was impeached for allegedly embezzling state funds and taking bribes from gambling bosses last year.

But prosecutors failed to win a conviction at the Senate that would have thrown him out of office.

A popular uprising spurred by a growing corruption scandal and the apparent collapse of the corruption trial toppled him last month. . . .




July 30, 2001


Rainforest Action Network and others have launched a major campaign against Citigroup – the largest U.S. financial institution.

Citigroup is an international leader in the financing of destructive oil and gas, mining, and commercial logging operations.

In Indonesia, Citigroup has been a major funder of companies engaged in oil palm and paper pulp production, leading to massive deforestation of these globally critical rainforest ecosystems. If the World’s rainforests are to be conserved it is important that rainforest activists go beyond railing against globalization in general, and hold corporations responsible for such specific instances of ecological misdeeds.

Holding Citigroup, Boise Cascade, ExxonMobil (Esso) and others responsible for activities that threaten the world’s forests, climate and other ecosystems is an excellent eco-activist strategy. . . .

Background Information

One of Citi’s top business partners in the region is Indonesia’s most infamous palm oil company, London Sumatra (Lon Sum).

Lon Sum has been implicated in illegal logging and human rights violations, and is suspected of being among the palm plantation companies that deliberately and illegally set fires in Indonesia in 1997.

The devastating fires destroyed vast areas of rainforest, which the government then allocated to forest corporations. Many of these companies sought the increased operating area in order to pay off debt to foreign investors, such as Citi. Overall, palm oil plantations have claimed nearly eight million acres of native forest in Indonesia, and every year close to one million additional acres of forest are targeted for conversion.

Pulp and paper operations are another key factor in the decimation of Indonesia’s forests. Citi is a top investor in Asia Pulp and Paper (APP), one of Indonesia’s largest pulp and paper operators. Since the late 1980s, foreign investment in Indonesia’s pulp and paper sector has grown by 700 percent. The increase in pulp and paper processing has far outpaced the development of sustainably managed pulpwood plantations, resulting in the widespread destruction of natural forests. APP has reportedly expanded its processing operations in order to resolve outstanding debts with foreign creditors.

Indonesia harbors 10 percent of the world’s remaining old growth forests. An estimated 72 percent of the country’s original frontier forest has already been destroyed. Today, the destruction continues unabated, posing an increasing threat to the country’s indigenous peoples, who face displacement from their traditional forest territories.

The forestry sector also poses a grave danger to Indonesia’s wildlife, including tigers, elephants, rhinos, and the endangered orangutan, which is found only in the remaining intact forests of Borneo and Sumatra. The orangutan population has declined by 50 percent in the last decade, primarily due to destruction of its forest habitat, up to 80 percent of which has been lost in the past twenty years. Less than twenty-five thousand orangutans now remain in the wild.

Both Lon Sum’s and APP’s operations threaten habitat that is critical to the orangutan’s survival….

For much more, GO TO > > > The Indonesian Connection

$ $ $

From Maestro: Greenspan’s Fed And The American Boom, by Bob Woodward:

ON AUGUST 2, 1990, Iraqi President Saddam Hussein invaded and took over neighboring Kuwait. President Bush declared, “This will not stand,” and it looked as if the nation were on the verge of war.

Greenspan had done enough work on the economics of the Vietnam War to know it took months or more to build up forces and supplies to fight a war on a far-off continent. He consulted with his longtime friend Secretary of Defense Dick Cheney, who had been the White House chief of staff during the Ford administration.

Despite the saber rattling, war was far off in time but likely at some point, Cheney said, essentially giving Greenspan a top-secret summary. The gravest problem was the vulnerability of the initial small wave of U.S troops who had been sent to the Middle East. They could be crushed by Saddam’s forces.

Greenspan convened the FOMC August 21, 1990, at a time of incredible tension, uncertainty and speculation about military action. The Mideast crisis had also sent oil prices surging….

Greenspan was facing another problem, which was perhaps even bigger, but partly secret. The nation’s banks, the foundation of the credit system, were in big trouble. Bad loans, especially those made in real estate and in Latin America, were taking their toll. Some of the largest commercial banks were on the verge of going under.

The depth of the problem was a big secret within the Fed, which had a regulatory role. But it wasn’t just the banks. A number of big securities firms and insurance companies were in trouble as well. Greenspan was so alarmed that he rose at 6 a.m. each morning to check the overnight financial news on TV. He was deeply worried about a collapse in the financial markets….

Surveying the situation from his paneled office at the New York Fed, Gerald Corrigan could see the making of an economic calamity for the entire financial system and the nation.

Citibank, which six years earlier had been the biggest, strongest and mot powerful bank in the world, was closest to collapse. The Federal Deposit Insurance Corporation (FDIC), which insured deposits, examined Citibank and on their grading scale gave it a 4. A 5 was the lowest grade and indicated complete insolvency.

Headed by John S. Reed, a problem-solving manager of some genius, the bank had gone though a vast expansion. Now the stock had fallen to a new low because of bad real estate and foreign loans. Corrigan arranged a come-to-Jesus meeting with Reed and informed Greenspan of his plan.

Greenspan didn’t second-guess Corrigan and gave his tacit approval.

The day before Thanksgiving 1990, Corrigan met with Reed. They got into a big argument about Citi’s likely losses. Reed insisted that the bank’s losses would total only $2-$3 billion.

“Goddammit,” Corrigan shouted, it would be $5-$6 billion and Reed had better get used to it. Corrigan figured that Citi had about six months to raise $5 billion in capital, or else they’d go under. At that time, raising $5 billion was almost unheard-of, virtually impossible….

Prince Alwaleed bin Talal, a young, flamboyant Saudi Arabian of extreme wealth who already owned a considerable amount of Citibank stock, was willing to invest another $1.2 billion. It would give him about 14 percent of the Citibank stock and make him by far the largest single stockholder.

Corrigan flew to Saudi Arabia for a secret meeting with the prince. During a two-hour meeting, he laid out the rules….

Reed wrote a 600-page memorandum of understanding outlining his plans to improve performance and cut costs dramatically. He shared a copy with the Fed, which, along with the FDIC and the comptroller of the currency, acted as Citi’s overseer and de facto board of directors as Reed tried to save the bank. Eventually, Reed turned the bank around….

On top of the problems with the banks, the separate savings and loan collapse had depressed the real estate market. Greenspan was on the board of the Resolution Trust Corporation, which was the government agency created to dispose of the insolvent S&Ls and their real estate. He applauded and supported the eventual effort to unload a large block of real estate – billions of dollars’ worth from all around the country – to get the real estate market primed. There had to be significant real estate sales to revive the market and get prices up. That meant bargain-basement prices, creating vast fortunes for those who got in on it.

The largest buyer of RTC assets was Joe Robert, a Washington D.C.-area entrepreneur. He spent about $8 billion and ended up making a total $3 billion profit

As Greenspan said in a private meeting, “We endeavored to galvanize on the greed of a number of people in the business, who when seeing their counterparts making big profits, dived in, and they virtually cleaned out our inventory.”

The real estate market was recovering….


Outline for . . .

Citibank: Lords of Corruption

by William Meyers

[No publication date set]

1. The beginning: born in a hothouse of corruption

Citibank did not invent corruption. It was brought to America from Europe; the Revolution and new Federal government changed little. Banks were considered by many to be corrupt in and of themselves, like usury, and there were no banks in the Colonies at the time of the Revolution. Citibank was born in 1812 to serve the interests of a few New York City merchants who bribed the New York State legislature to get a charter.

2. 19th Century Robber Banking: Moses Taylor and James Stillman

Citi’s money did not come from nowhere. In the 1800’s it came from the usual places: stolen Native American lands, raping the environment, defrauding small investors, and corrupt deals with the local and federal governments. Moses Taylor was a pillar of the infamous Tammamy Hall and James Stillman consorted with the most corrupt Robber Barons and politicians of his era.

3. Citibank and Mexico, Cuba and Puerto Rico

When Congress (and the Presidency) succumbed to systematic corruption in the 1880’s, Citbank was there. The system perfected by Senator Nelson Aldrich traded high tariffs on imported goods for campaign contributions and stock market tips.

Central to it was Henry Havemeyer, who owned the Sugar Trust. He engineered the annexation of Hawaii and soon afterwards Cuba, Puerto Rico and the Philippines, to get his hands on their sugar plantations.

Havmeyer served on only one board outside of the Sugar Trust: National City Bank’s (now Citibank). Using Citibank money, he and James Stillman bought most of the plantations of the conquered colonies.

Citibank was also a chief supporter of the corrupt pre-revolution (1910) regime in Mexico. Citibank and the corruption of the PRI (the current governing party). Citibank’s connection to the NAFTA, GATT, and the Chiapas rebellion.

4. Citibank, Mutual Funds, and The Great Depression

During the 1920’s Citibank encouraged investors to buy stocks at vastly inflated prices. In 1932 the Senate Banking Committee found that Citibank knew the stocks were overvalued, and that the 1929 stock market crash was largely a result of stock prices falling to their real values. Banking law reforms were enacted to protect citizens from Citibank’s greed. . . .

5. Citibank, the Federal Reserve, and Human Misery

How the Federal Reserve works. The creation of money. Various economic theories and their relation to Federal Reserve manipulations. Citibank’s relation to the Fed. Profiting on human misery: the 1980-1982 depression and other examples. The new electronic money and its consequences.

6. Bonds and Corruption

Why governments, and the rich, prefer bonds. Citi’s role in the bond market. Why bonds should never be used to finance government projects like schools and prisons.

7. Citibank and War, War, War

Citibank and the War of 1812, Mexican-American War, Civil War, Spanish American War, Philippines War, World War I, World War II, Vietnam, and Persian Gulf wars, plus some small wars in countries with “American interests.”

8. The House Always Wins: Credit Cards I

Citibank did not invent credit cards, but it was the first to make them a financial success. Spending money using a credit card is always a gamble, because the banks and Federal Reserve structure unemployment into the economy. Statistically Citibank and other issuers can count on people getting behind in payments; the profits from usurious interest rates on balances have fueled Citibank’s latest round of expansion.

The economic disenfranchisement of America, the credit card, and the new peonage: how Citibank planned and executed an economic counter-revolution.

9. The House Always Wins: the 1980 SEC Investigation

During the 1970’s Citibank successfully manipulated the foreign currency markets for its own profit, often adversely affecting U.S. interests. Laws were broken on a massive scale, but an SEC investigation resulted in a mere “stop doing that” directive when Ronald Reagan (a close friend of then Citibank CEO Walter Wriston) took office. Germany, Italy, and Switzerland, however, settled with Citibank for millions of dollars in penalties.

10. Financing global catastrophe: Citibank and the ecocrisis

How Citibank continues to finance the rape of the environment.

11. Citibank and Deregulation

What Citibank wants now, and how they plan to get it through their politicians.

12. Who Owns Citibank; Who Citibank Owns

Who owns Citibank and other big banks. Who and what else they own.

Walter Wriston, Citibank CEO, was a close friend and supporter of Reagan. Ties between Citi, other banks and industrialists, and prominent politicians.

13. Banking on the New World Order

Most of Citibank’s biggest historic losses came as a result of war and revolution. It favors one world government because it would be insured against such losses. It would be able to penetrate every market in the world and suck the economic blood out of every citizen.

This is also critically important to Citi’s allies, international corporations and other super-banks.

14. 1998: The Travelers Merger & Other Updates

15. The End: America’s biggest bank (Summary & conclusions)

Today Citibank is the richest bank in the U.S., and, depending on exchange rates, at times is the richest in the world. It effectively controls Visa and Mastercard. It has branches in every country of the world, and can make and break nations with its investments and exchange rate manipulations. Its tentacles are everywhere, and it seeks to write laws to its own satisfaction, including the current push to “deregulate” the banking industry. . . .

(Catbird: Can’t wait to read the book.)

# # #



For more Bloodsuckers, GO TO > > >

American Express: The Dark Side

Apollo Advisors

The Bad Faith Buzzards

The Bankruptcy Buzzards

Carlyle Group: Birds that Drink from Cesspools

Confessions of a Whistleblower

Claims By Harmon

Dirty Gold in Goldman Sachs

Dirty Money, Dirty Politics & Bishop Estate

The Eagle Hooded: The 9-11 Coverup

Investigating Investcorp

New Songs by The Whistler

Of Vampires and Daisies

The Silence of the Whistleblowers

Spotting the Big Five

Sukamto Sia: The Indonesian Connection

The Kissinger of Death

The Puna Connection

The Stephen Friedman Flock

The Story of Enron

Tracking the Tyco Flock

Transylvania Travelers in St. Paul

Zeroing In On Zurich Financial Services

CITIGROUP: The Mating Dance of Dinosaurs

Citibank Investigation

The Citigroup Watch




For more TALES OF TERROR, GO TO > > >









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Last update October 9, 2006, by The Catbird