Citibank et al: Global Advocates of Terror

…private investment corporations or PICs are designed for the purpose of holding – and hiding – one person’s assets. The assets can be real property, money, stock, art or other valuables. The nominal officers, trustees, and shareholders of these shell corporations are, in turn, often shell corporations controlled by the private bank. The PIC then becomes the holder of the various bank and investment accounts, and the ownership of the private bank’s client is buried in the records of so-called secrecy jurisdictions, such as the Cayman Islands. Private banks keep pre-packaged PICs “on-the-shelf”, awaiting activation when a private bank client wants one. They have shell companies in secrecy jurisdictions managed by shell corporations which serve as directors, officers and shareholders. There are shells within shells within shells – like Russian Matryoshka Dolls -- which in the end can become impenetrable to legal process.

Private bankers specialize in secrecy. Even if a client doesn’t ask for secrecy, the private banker encourages it. Look at this brochure for Citibank’s private bank on their international trust services. In the table of contents it lists the attractiveness of secrecy jurisdictions this way: “The Bahamas, the Cayman Islands, Jersey & Switzerland: The best of all worlds.” This brochure also advertises the advantages of using a PIC. One advantage it lists is this one:

“PIC assets are registered in the name of the PIC and your ownership of the PIC need not appear in any public registry.”

Secrecy is such a priority that private bankers are often told by their superiors not to keep any record in the United States disclosing who owns the offshore PICs established by the private bank. One former private banker told us he and his fellow bankers had to hide cheat sheets in their desks, because they weren’t allowed to keep names of the offshore accounts they were managing. Since they couldn’t remember the names and numbers of all those accounts when they needed them, they would keep a secret list in their desks or with a secretary to help them remember. When the list was discovered, the banker was reprimanded.

Secrecy is so important that private bankers sometimes speak in code to each other in phone calls across the Atlantic to disguise the beneficial owner of the account they are talking about, so other bank employees won’t know the beneficial owners of the very accounts they are working on. One private banker in Citicorp London had worked for years on the Salinas account and never knew Raul Salinas was the beneficial owner. Raul Salinas was always referred to by a code, CC2, or the name of his PIC, Trocca. The private banker said she was surprised when she learned Raul Salinas owned one of her accounts.

American banks aren’t allowed to maintain secret accounts in the United States, so U.S. private bankers establish secret accounts and secret corporations in countries that do allow them. Then they manage those accounts from their offices in the United States. In short, American banks help wealthy customers do abroad what the customer and the bank can’t do within the boundaries of the United States.

Today we are looking at the private bank of Citibank. It is the largest bank in the United States, and it has one of the largest private bank operations. It has the most extensive global presence of all U.S. banks, and it had a rogues’ gallery of private bank clients. Citibank has been private banker to:

– Raul Salinas, brother to the former President of Mexico; now in prison in Mexico for murder and under investigation in Mexico for illicit enrichment ;

-- Asif Ali Zardari, husband to the former Prime Minister of Pakistan; now in prison in Pakistan for kickbacks and under indictment in Switzerland for money laundering;

-- Omar Bongo, President of Gabon; subject of a French criminal investigation into bribery;

-- sons of the General Sani Abacha, former military leader of Nigeria; one of whom is now in prison in Nigerian on charges of murder and under investigation in Switzerland and Nigeria for money laundering;

-- Jaime Lusinchi, former President of Venezuela; charged with misappropriation of government funds;

-- two daughters of Radon Suharto, former President of Indonesia who has been alleged to have looted billions of dollars from Indonesia; and, it appears,

-- General Albert Stroessner, former President of Paraguay and notorious for decades for a dictatorship based on terror and profiteering.

And these are just the clients we know.

Other banks have similar accounts. The legal counsel for Bankers Trust private bank asked the Subcommittee not to make public any information about an account of a certain Latin American client because the private banker was concerned that the banker’s life would be in danger if the information were revealed. The Bankers Trust counsel, when describing one of its clients, told our staff words to the effect that, “These are bad people.” If the bank thinks they’re “bad people,” why are they seeking them as customers of the private bank? In the Bankers Trust case it appears the bank does know its client; but what it knows is that its client is “bad.”

… We can’t condemn corruption abroad, be it officials taking bribes or looting their treasuries, and then tolerate American banks making fortunes off that corruption.

Statement of Senator Carl Levin, Permanent Subcommittee on Investigations, Hearing On Private Banking and Money Laundering: A Case Study of Opportunities and Vulnerabilities, November 9, 1999.