[Marxism] Pinochet Had Other Accounts In the U.S., Report Claims (WSJ)

Walter Lippmann walterlx at earthlink.net
Wed Mar 16 04:55:17 MST 2005

(We're finally getting to learn just a bit of the
truth about how Pinochet got rich backing the U.S.
in its relentless campaigns against Communism, Cuba,
and the domestic political left in his own country.
Still, we haven't seen him appearing in public with
stainless steel bracelets. Will that ever happen?)

March 16, 2005

Pinochet Had Other Accounts
In the U.S., Report Claims
Congressional Paper Cites
Citigroup, Among Others;
Monitoring Issues Raised

March 16, 2005; Page A2

Former Chilean dictator Gen. Augusto Pinochet set up
accounts at Citigroup Inc. and several other U.S. financial
institutions over more than two decades, a new
congressional report alleges, raising questions for both
the banks involved and federal regulators who monitor them.

According to the report, released yesterday by the U.S.
Senate's permanent subcommittee on investigations, Mr.
Pinochet's banking relationships extended beyond Riggs
National Corp.'s Riggs Bank, which pleaded guilty to a
criminal charge related to suspicious transactions it
handled for him. Besides Citigroup, the list includes Bank
of America Corp., Miami-based Espirito Santo Bank, the U.S.
office of Banco de Chile and several smaller banks.

"Through lax due diligence or worse, too many banks allowed
a notorious public figure, Augusto Pinochet, to build a
secret web of U.S. accounts using offshore corporations,
deceptive account names and third-party conduits to hide
his role in moving millions of dollars across international
lines," said Sen. Carl Levin (D., Mich.), the senior
Democrat on the committee.

Mr. Pinochet, 89 years old, who took power in a 1973 coup
and remained president until 1990, has been accused of
involvement in human-rights abuses and other wrongdoing. He
has been the subject of legal actions in several countries
but has never been convicted. News of the secret bank
accounts is making it harder for defenders of Mr.
Pinochet's regime to continue supporting him.

Citigroup had a "substantial, years-long relationship" with
Mr. Pinochet and his family dating back to 1981, the report
said. Senate investigators identified 63 U.S. accounts and
certificates of deposit opened for Mr. Pinochet and his
family in New York and Miami between 1981 and 2004, the
report said.

Mr. Pinochet's 15 personal accounts with Citigroup were
opened under "disguised variants of his name," the report
said, and the two managers in charge of his accounts "never
met their client and did not know his true identity." In
addition, neither ever evaluated the source of the funds.
The personal accounts were closed by 1995 after his
identity was discovered.

The report doesn't pass judgment on the legality of the
actions of Citigroup or other banks. But the disclosures
raise questions about the efficacy of the banks' systems
against money laundering, including their due diligence on
customers and monitoring of the large sums of money moving
among various Pinochet accounts. When some of the Citigroup
accounts were opened, regulations governing such "know your
customer" issues were looser than they are today. Most of
those accounts were closed by 2000 or 2001, the report

The report comes at a bad time for Citigroup. In the face
of a series of scandals ranging from the loss of its
private-banking license in Japan to bond-trading troubles1
in Europe, Citigroup Chief Executive Charles Prince has
pledged to beef up compliance and ethics.

"Citibank accounts for Augusto Pinochet, which he opened
with false documentation using pseudonyms, were shut down
nearly a decade ago," Citigroup said in a prepared
statement. "Pursuant to an invigorated Public Figure Review
policy in 1998, Citibank began closing any remaining
accounts for Pinochet's children. All accounts for Pinochet
family members are now closed, but for one that we have
been required to keep frozen pending liquidating
instructions from the client, a Pinochet daughter."

The ramifications of the report for Citigroup and the other
institutions are uncertain. The report may spur bank
regulators to more closely scrutinize the banks involved.
The report also faults regulators, including the Office of
the Comptroller of the Currency, for failing to uncover the
secret network of accounts maintained by Mr. Pinochet. The
OCC has already been under fire from lawmakers for its
handling of the Riggs matter and has responded with a
crackdown on money laundering.

In its statement, Citigroup maintained that it has stepped
up its antimoney-laundering procedures in recent years, as
part of a push by top management to institute "rigorous
compliance" systems.

In addition to Citigroup, the U.S. unit of Banco de Chile
and Espirito Santo Bank, a unit of Banco Espirito Santo SA
of Portugal, maintained long relationships and provided
multiple accounts to Mr. Pinochet, the report said. Other
institutions "helped Mr. Pinochet and his family move funds
and transact business" in the U.S., including Bank of
America; Banco Atlantico, now part of Banco de Sabadell of
Spain; Coutts & Co. (USA) International, now part of Banco
Santander Central Hispano SA; Ocean Bank, of Miami; and
PineBank NA, of Miami.

The report said that between 1993 and 2004, Bank of America
maintained three U.S. accounts and as many as six
certificates of deposit for Mr. Pinochet's daughter. A Bank
of America spokesperson declined to comment on the report.

A Santander spokesman said the bank has "fully cooperated"
with Spanish authorities and has internal
antimoney-laundering procedures and controls. The other
banks named in the report couldn't be reached for comment.

The report also indicated that Riggs's relationship with
Gen. Pinochet was more extensive, and began earlier, than
previously disclosed.

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