Predator Nation by Charles H. Ferguson

Author:Charles H. Ferguson [Ferguson, Charles H.]
Language: eng
Format: epub, mobi, pdf
ISBN: 978-0-307-95257-8
Publisher: Crown Publishing Group
Published: 2012-05-21T16:00:00+00:00

In the Service of Rogue States and Drug Lords

TAX EVASION IS not the only motive for bank secrecy, money laundering, and asset concealment.17 Kleptocratic political leaders, organized criminals, drug cartels, and rogue states engaged in nuclear weapons development or terrorism also require bank secrecy to conceal the size and sources of their funds and to give them secret access to payments systems. Many of the world’s largest banks, both American and foreign, have been only too happy to help.

Perhaps the most extraordinary case involves Credit Suisse, Barclays, Lloyds, and seven other (as yet unidentified) international banks that laundered billions of dollars for Iran and other nations; all of the nations in question have been placed under international sanctions for developing nuclear weapons and/or supporting terrorism. In violation of UN sanctions and U.S. law, the banks helped Iran launder transfers to the United States, including payments related to Iran’s ballistic missile and nuclear programs, as well as funds that apparently were channeled to terrorist groups in the Middle East. Some banks created internal instruction manuals to help employees strip out incriminating data from wire transfers.

The most detailed public records pertain to Credit Suisse, possibly the most aggressive in marketing its program, which started violating U.S. sanctions on Iran in 1995. The bank produced a special pamphlet for its illegal customers, “How to Transfer USD Payments,” and set up a special “investigations” office to manually review each illegal transaction, promising, “It is absolutely impossible that one of your payment instructions will be effected without having it checked in advance by our specially designated payment team at Credit Suisse in Zurich and all team members are most professional and aware of the special attention such payments of yours do require” [emphasis in original]. The bank also maintained a sub-business of making transfers to “specially designated nationals,” like warlords or other large-scale criminals.18

A series of settlements reached by the banks with the Justice Department and the Manhattan District Attorney in 2009 and 2010 yielded $1.2 billion in fines. Credit Suisse agreed to pay $536 million, Barclays $298 million, and Lloyds $350 million. For at least a decade, they had systematically engaged in criminal activity by laundering money for Libya, Iran, Sudan, Burma, and North Korea, among others.19 It is clear that these activities were known and approved by quite senior executives. But since none of the three banks contested the charges, and all disclosed their records, the cases were settled with fines and deferred prosecution agreements. No bank was required to plead guilty, and not a single person was criminally prosecuted or even individually fined.

Let me pause to ask readers the following question. What do you think would happen to you, personally, if, as an individual, not a senior bank executive, you were caught laundering money for Iran’s nuclear weapons program? Do you think that, perhaps, you might be treated just a little bit more harshly? Well, in fact, we have some interesting comparative data on this question. In 2011 an Iranian American, Reza

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