Nexus - 0304 - New Times Magazine-pages

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Altman walked away with a cool US$18 million."* Few individu- THE BARINGS COVER-UP als or institutions who were touched by the scandal would wholly Though for sheer bad luck we couldn't do much worse than —o pare aon pe 48 — ee ~— — the — _ oe British — at courted power and influence. A close friend was former arings, Singapore, who, with the aid of a ‘dump’ account known President Jimmy Carter. as the “five eights"—signifying in Chinese superstition "all the BCCI aggressively set out to launder the Colombian cartels’ _luck"—bumped up losses of US$1.6 billion over a three-year peri- massive drugs money that would eventually see up to 40 other _ od, sending Barings crashing to its knees. Until then, Barings sat banks directly or peripherally involved—many of them blue- at the top of the British establishment tree as the oldest merchant blooded etes of the et a — up a branch poor io i with _— = dark = Barings in Panama, BCCI soon cut a deal with Panama's Noriega, opening ated back to the mid-17th century. By modern standards it was a an account for him in the name of "Zorro". Dirty funds were col- —_ small bank with a net worth in the US$600 million range but still lected and wired to Europe. From there, Certificates of Deposit | managed to punch above its weight. That is, until it began specu- (CDs) were issued that could be used as collateral against loans _lating its depositors’ and shareholders’ money in Singapore's issued. Another technique involved cycling the money through an _ futures market, SIMEX. [See NEXUS vol. 3, nos. 2 and 3.] affiliated company, Capcom Financial Services, whose huge All the signs are that the Barings affair is a straightforward case futures and options business was an ideal laundering vehicle. of ‘bonus fever’ amongst the senior executives who benefited from Discontented with just the narcotics industry, BCCI developed excessive annual bonuses. Nevertheless, there may be more to it close ties to the 'spook' community, maintaining accounts for than that. The fact that their inexperienced young SIMEX trader, Israel's Mossad, America's CIA, Britain's SIS, France's DGSE, Nick Leeson, didn't contribute one dime to the bank's bottom line plus the security services of Pakistan and Switzerland. The CIA's throughout his three-year tenure as “the big swinging dick" on the accounts with BCCI covered several Singapore futures exchange is beside the years of covert operations on the part of point. Leeson contrived to report profits that agency. Principally, payments were : by creating false accounting entries, and made to finance Afghan rebels and to 5 : thus, year on year, was able to conjure a bribe General Noriega. Almost unbeliev- fa The sheer volume of host of ghost profits—carefully hiding his ay Bol cues alo incu! he HJ money skating around the fl "=! nento-mon oss and the Iran-backed Hezbollah—long world’s financial lion. His superiors, the bank's senior Steen | mre er cea ta Nidal's Fatah Revolutionary Council had proportion of iti IS illegal themselves bonuses of US$1.6 million- a US$60 million account at London's plus for the year ending 1993. Despite fashionable Sloane Street branch. At the : : ce crashing with massive losses, the direc- same time, the bank was responsible for Of a massive US$6 trillion _ walked to new # pe with the _- financing deals in which Mossad provid- inancial group ING which galloped to ed ad to Arab necnciets.. oni that annually circulates : the cote a in their at. ia, preg te ie . of oo the globe, one quarter— : ~ negotiated ena million med ebt, use to hide its cash reserves jonuses covering the tragic year away from the grasping hands of creditor US$1 5 trillion— is illicit, where reported earnings of US$320 mil- banks. and a third of this, lion in reality concealed accumulated Outdoing the security services of many : losses of US$260 million, which were small nations, the BCCI also ran its own US$500 billion, i Is soon to increase sixfold. global intelligence network, known as narcodollars. It is now clear that Leeson didn't oper- "the black network", employing an esti- : : ate alone. Those tagged with assisting mated 1,500 trained operatives. Based in and/or colluding with him include the Karachi, this was a network "of hand- CEO, Peter Norris, and the Director of picked individuals who underwent a one- Finance, Geoffrey Broadhurst.” year training course in psychological warfare, spying techniques Discovering the degree of complicity involved at senior levels, 23 and the use of firearms".'* directors and senior staff were forced to resign by their new Dutch When major banks aren't colluding with spooks and organised owners. This did not stop the Bank of England, Britain's banking crime, they appear to settle back and engage in dubious ‘in-house’ _ regulator, from publishing a caveat-ridden and poorly investigated business. Most don't hit the headlines, being swept away fromthe report. The report chronicles the Bank of England's less-than- glare of the media by red-faced executives, zealous efforts to apportion blame to anyone other than Leeson, One of those that wasn't so lucky was Daiwa Bank Ltd. _ but does catalogue a list of impediments to its investigation. Squirming with loss of face, Daiwa executives announced to a _‘ These include the accidental destruction of "significant classes" of round-mouthed media that Toshihide Iguchi, a small-time records within the offices of Barings, London, which are cited as Japanese trader working out of Daiwa's New York office, had being "missing", “corrupted" or not “routinely retained”. The racked up a US$1.1 billion loss trading US Treasury bonds. _ sleuths of Threadneedle Street, however, did not once venture Stretching credulity beyond belief, Daiwa claimed that the 44- _ inside the door of Barings’ offices during their entire investigation. year-old Iguchi, following a modest trading loss of $200,000, Had they done so, it is not outside the realms of possibility that spent the next 11 years writing 30,000 "unauthorised" tickets in an they may have discovered "significant classes" of documents cor- attempt to reverse his misfortune. This equates to a staggering _rupting away before their very eyes. $400,000 per trading day, making Iguchi one of the unluckiest Importantly, nobody is saying which banks provided the suckers the world of high finance has ever encountered. immense funding that the Barings operation consumed. Nor is JUNE-JULY 1996 NEXUS ¢ 25