Spook Banks

It feels good, albeit in that familiar and bitter I could have told you so kind of way, to see the mainstream media hesitantly lift the rock and shed some light on the wormy business of CIA money laundering.

The Washington Post and The Wall Street Journal have begun to do just that, finally, with Riggs Bank, and Slate has followed their lead this week with a couple of articles.

From Slate:

On the last day of 2004, [Glenn R.] Simpson published a [Wall Street] Journal story about the Justice Department's investigation of purported money-laundering at Riggs Bank, which is headquartered in Washington, D.C. Previous news reports had connected Riggs to the dubious financial machinations of Saudi diplomats and despots from Africa and South America, including Chile's former maximum leader, Gen. Augusto Pinochet. Banking regulators fined Riggs $25 million last year for its violations, the institution put itself up for sale, and a Justice Department investigation was started.

Simpson's Dec. 31 piece—inexplicably appearing on Page A-4 instead of A-1—locates what may be the common denominator shared by Riggs, the Saudis, the Africans, and the South Americans: the Central Intelligence Agency.

Citing unnamed U.S. government officials and people familiar with Riggs operations, Simpson reports that the bank has enjoyed a "relationship" with the CIA for some time. "That relationship, which included top current and former Riggs executives receiving U.S. government security clearances, could complicate any prosecution of the bank's officials, according to private lawyers and former prosecutors," he writes. By "complicate" one can safely assume that Simpson means "make impossible."

...

Bandar briefed Treasury Secretary John Snow in early 2003 about the work he'd done for the CIA, Simpson notes. The parapolitical credits on the prince's resume include funding the Contras at the behest of the White House, supporting the Afghan rebels against the Soviet Union, and serving as a go-between in the mending of the Libya-U.S. relationship. The CIA worked with Pinochet through his secret police chief, Manuel Contreras, Simpson reports, adding that Contreras banked at Riggs as recently as 1979.

"That wasn't money-laundering, detective, I was just serving national security," would be an excellent defense in a criminal prosecution. Another reason the government might want to shut down the criminal probe that Simpson doesn't mention is that where there are one or two CIA-related bank accounts, there are probably more. Better to cover up the extent of Riggs' "full-service" banking.

In other words, BCCI, meet Riggs Bank; Riggs Bank, meet BCCI.

Kudos to Slate's Jack Shafer for connecting some of the dots, and for bringing the term "parapolitics" out of the fringe and into the virtual mainstream.

However, and as usual, the stories lack context. Both the historical context (the ugly trail of CIA cut-outs and compromised institutions such as Nugan Hand and BCCI), and Riggs' own internal context. As we discussed here last Sept 14, Riggs is facing a class action suit brought by 9/11 families for its part in aiding al Qaeda financiers of the attacks "through negligence."

Also soft-peddled is the very special relationship the bank enjoys with the Bush family, through Uncle Jonathan. Shafer's single, cautious mention is the following, from his second column on Riggs and the CIA:

As long as we're indulging in speculation, what should we make of the 1997 deal in which J. Bush & Co., a money management firm owned by Jonathan Bush, George H.W. Bush's brother and W's uncle, was purchased by a unit of Riggs Bank? Exactly how close is the Bush dynasty to Riggs and its scandal?

Left unsaid is the fact that Bush was appointed CEO of Riggs Bank's investment arm in May of 2000. So I would say, if any of those nicely laundered bucks stop anywhere, they ought to stop on the desk of Bonesman Jonathan.

Back in the days of the Golden Triangle narco-laundering Nugan Hand Bank, the brass of military-intelligence were less cautious than they are today about the company they were seen to keep. As Jonathan Kwinty writes in The Crimes of Patriots, its exective board "had enough generals, admirals and spooks to run a small war." Not that their incaution led to anything worse for them than embarrassment - the disposable Frank Nugan and Michael Hand are another story - but the wolves have gotten better at covering their tracks. Still, the money trails are there to be picked up, for those with the courage to follow them into the dark places most won't see even with their eyes closed.

Speaking of spook banks, it was interesting to read ace-spook banker Buzzy Krongard a few days ago suggest that the world is a better place with Osama bin Laden at large.

From The Sunday Times:

If the world’s most wanted terrorist is captured or killed, a power struggle among his Al-Qaeda subordinates may trigger a wave of terror attacks, said AB “Buzzy” Krongard, who stepped down six weeks ago as the CIA’s third most senior executive.

“You can make the argument that we’re better off with him (at large),” Krongard said. “Because if something happens to Bin Laden, you might find a lot of people vying for his position and demonstrating how macho they are by unleashing a stream of terror.”

Krongard, a former investment banker who joined the CIA in 1998, said Bin Laden’s role among Islamic militants was changing. “He’s turning into more of a charismatic leader than a terrorist mastermind,” he said. “Some of his lieutenants are the ones to worry about.” Krongard, 68, said he viewed Bin Laden “not as a chief executive but more like a venture capitalist”.

This should be a shocking admission to those unfamiliar with Krongard's name, and its early linkage to the disappeared topic of 9/11 insider trading. To those who know the story, and the score, it's further confirmation, from one venture capitalist to another, that 9/11 was, in an important respect, a business arrangement.