DETROIT -- We just had to know a post-election sermonette from Osama bin Laden was due. He taped and spewed his usual diatribe, hailing as martyrs the terrorists who died attacking the U.S. consulate in Saudi Arabia on Dec. 6, calling for "humiliation for America the infidel and its allies," and ratcheting up his campaign against his former covert sponsors, the Saudi royal family, accusing them now of "violating God's rules."
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Ironically, the Saudi rules on banking disclosures, money transfers and support for charitable organizations have, for years, enabled bin Laden and other terrorist groups to thrive, and some of the largest financial interests in the world have willingly participated in these schemes.
Secretary of State Colin Powell said it "appears to be" the voice of bin Laden and added, "He's a terrorist. That's what terrorists do. ... He's a murderer and we're going to continue to hunt for him." So far, the hunting hasn't nabbed him and, given his own resources and support bin Laden receives, he's surely working on his next terrorist attack and another sermonette.
Hate, fanaticism and dedication drive bin Laden and others like him, but it's money and organization that nurture them and convert murderous thoughts into bloody deeds. Without money, their hate is pent-up and violence confined. Cut off the money and they become troublesome, local irritants, rather than threats around the world.
But why are financial institutions and governments so slow to turn off the flow of cash that ends up in terrorist coffers?
The case of David Boim may help change that and provides an example of how government and the courts can go after the money funnels for terrorism. The case points to ways of pursuing the shadowy sources of money that passes through the international banking community and ends up in the hands of terrorists.
David Boim was shot in the back of the head as he waited for a school bus in a suburb of Jerusalem in 1996. He and his family had moved from New York to Israel in 1985. The 17-year-old had dreamed of becoming a doctor, but the Hamas terrorist attack ended his life and left his family shattered.
In their grief, his parents vowed to pursue those responsible for their son's murder. They brought a $600 million lawsuit against three U.S.-based Islamic charities that had conducted fund-raisers for Hamas.
The Boims were the first ever to use the 1990 federal Anti-Terrorism Act, which allows victims of violence overseas to sue U.S. groups for terrorist acts committed outside the United States.
Earlier this month, a federal jury in Chicago heard evidence describing how the charities shuffled money from their bank accounts and the elaborate paper trail and money transfers that ended up heading to the Middle East and into the pockets of high-ranking operatives in the Hamas organization.
The jury deliberated for six hours and awarded the Boims $52 million, deciding the U.S.-based groups and suspected terrorist Mohammed Abdul Salah helped fund the attack that resulted in David's death. Following the federal law, U.S. Magistrate Arlander Keys tripled the damages awarded by the jury and ordered the defendants to pay $156 million, plus court fees and costs.
"It could be billions of dollars. It's not going to bring David back," his mother, Joyce Boim, said after the verdict. But she did find comfort in the message it sends, adding, "At least we stopped some money from being sent to Hamas."
The size of the award will certainly get the attention of those banks and other organizations that help shuffle and launder huge sums of money, with little or no disclosure, that ends up who knows where.
Leonard D. Wallace, a Florida-based financial consultant, has intimate knowledge of how slippery and shady those shuffles are and the big names and big bucks involved in these global transactions. He finds the Boim case encouraging and hopes it marks "the beginning of the justice system assessing severe financial damages against organizations that have, up until now, supported terrorist organizations with impunity."
Wallace's experience with Citigroup, the world's largest financial services company, in a baffling deal involving $5 billion, money transfers around the world, phony account authorizations and a fabulously wealthy Saudi prince, points to practices that are perfectly designed for corruption and provide convenient money conduits terrorists need to survive. Citigroup has a pattern of behavior in these sordid deals.
In November, "Bloomberg News" reported Citigroup had been helping Yasser Arafat, the late Palestinian leader, invest $6.8 million at the same time he was channeling money to militants and into his personal accounts.
Arafat didn't hold accounts in his own name, but he did control an estimated $1.3 billion as president of the Palestinian Authority.
According to "Bloomberg," Citigroup's private bank handled Arafat's accounts.
"Citibank rears its ugly head again," said Jeremy Pope, former executive director of Transparency International, an advocacy group for global standards to fight corruption and money-laundering.
In typical fashion, Citigroup ducked the Arafat issue. A spokesman said, "As a matter of policy, Citigroup does not confirm who may or may not be a customer." Or does Citigroup even care as long as it gets its cut?
Japanese regulators closed the company's private banking operations there in September for failing to "conduct proper checks" on its clients to prevent money-laundering.
Starting in August 2001, representatives of Citigroup Singapore approached Leonard Wallace to help facilitate a series of business loans totaling $5 billion and assist the bank in investing the proceeds. Wallace was to receive fees for his services.
Citigroup's Miami branch handled and authenticated documents for the complex transactions and top officers at the bank's New York City headquarters were fully informed. Wallace did his work, but then learned the loan proceeds were not meant for investments, but rather were headed to Prince Al-Waleed bin Al Saud, one of the richest men in the world.
The Saudi prince owns $9.4 billion in Citigroup stock and he also has a substantial stake in the Saudi American bank known as Samba. Citigroup once controlled 20 percent of Samba and ran the operation until early this year, when it began divesting.
Under orders from the Saudi government, Samba and other banks there were required to create charitable accounts billed to support "humanitarian" efforts. They were dubbed Account 98. By Saudi edict, no outside government or authority would have any access to any Account 98 records or where money from the fund went.
When the $5 billion loan deal fizzled, Wallace smelled a rat and saw a money shuffle that was headed to type 98 accounts. He alerted Sanford Weill, then CEO of Citigroup, the entire board of directors, federal authorities and the Saudi Ambassador.
Since then, Wallace has pressed Charles Prince, the current CEO, to explain what was intended in the mysterious, aborted transaction. No one is offering any explanation.
"Just as the House of Saud truly benefits royally from its country's secrecy laws," Wallace told me, "the 'House of Citigroup' benefits from its vast reach and influence throughout the world."
Wallace is convinced "unknown groups" within Citigroup were actively involved in "criminal activities" before and after Sept. 11, 2001. Wallace has filed a $500 million notice of claim against Citigroup. The bank has ignored inquiries from the Niagara Falls Reporter about the Wallace case.
In October, when I first wrote about Leonard Wallace's suspicions, a London-based law firm that specializes in tracking money-laundering for terrorism contacted Wallace and is now investigating the transaction.
Wallace is confident his thoroughly documented experience will blow the lid off the strange deal.
"I am a proud U.S. Navy Vet who is willing to be in any court or legal proceeding in this country so that this matter can be seen in the light of day," he said. "I wonder whether the Saudi prince and the folks at Citigroup will do the same?"
| Niagara Falls Reporter | www.niagarafallsreporter.com | Dec. 21 2004 |