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(Some) Justice Finally Comes to Chile -Is More on the Way? – Submerging Markets

(Some) Justice Finally Comes to Chile -Is More on the Way?  Submerging Markets

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After decades of inaction, Chile’s own judicial system is finally beginning to hold leading members of the Pinochet dictatorship directly responsible for the brutal reign of terror that it inflicted on Chile  from September 11, 1973 to March 11, 1990.

The most recent piece of good news was this week’s indictment of 89-year old former Chilean dictator General Augusto Pinochet Ugarte on charges stemming from the disappearance and murder of several individual activists.

715934 In July 2002, another serious human rights case against General Pinochet had been dismissed in Chile on grounds that he was mentally incompetent to stand trial. That case echoed the controversial March 2000 decision by UK authorities to permit him to return home rather than extradite him to Spain, France, Switzerland, or Belgium, after he’d spent more than 17 months under house arrest in London.

As noted below, this week’s indictment is just the latest in a series of recent efforts by Chile’s judicial system to provide justice for more than 3,200  civilians who were murdered by the regime, more than 28,000 others who recently stepped forward to bare witness about being illegally jailed and tortured, and tens of thousands more who had similar experiences, but have so far kept silent. 

Pinpic_1 Several other cases that have been brought against Pinochet in Chile have recently been allowed to proceed, especially after Pinochet gave a lucid, self-serving interview to Channel 22, a Spanish language TV station in Miami,  in November 2003. This incredible act of hubris may have finally brought Pinochet to ground.

Streetfighter_3mbisonvirgin While this latest ruling will no doubt be appealed to Chile’s Supreme Court, it is at least another step in the right direction.

In addition to providing justice, such efforts also provide a measure of vindication for those who have long maintained that the Pinochet dictatorship was an unwarranted, illegal, and counterproductive intrusion on Chile’s long-standing traditions of democracy and respect for human rights.

43_1However, the disgrace now is that while Spain, France, Belgium, Switzerland, Argentina, and Chile itself have brought serious criminal charges against Pinochet or his key associates, the US Government has never done so. Charles_horman_and_joyce_1971

This is despite the fact that several US citizens were also murdered by the regime, not only in Chile but also in the US itself.   

Fig_88_henry_kissingerFurthermore, as examined below,  many of the Chilean junta’s most important confederates and accomplices — including leading bankers, economists, lawyers, media magnates, convicted professional terrorists, and several senior government officials — continue to enjoy sanctuary abroad — especially in the US, the purported champion of the “post-September 11th” global anti-terrorist campaign.

Many Americans may not recall that there was another September 11th, even more bloody and terror-stricken than their own. Indeed, this “other September 11th was one that their own government helped to create.

Fig_74_milton_friedman_2 To do so, the US worked closely with an incredible bevy of transnational terrorists and tin-horn “generals,” like Pinochet (Chile), and later, Videla (Argentina), Banzer (Bolivia), Stroessner (Paraguay), and Rios Montt (Guatemala). These valorous “generals” specialized in the use of terror against defenseless civilians.

It is time for Americans who really care about human rights to demand that the US Government follow the courageous lead that Chile has taken, and  help bring these uniformed savages, terrorists, and their foreign and domestic collaborators to justice. 

THE END OF IMPUNITY?

As noted above, there have been several other important recent steps toward justice in Chile with respect to the Pinochet regime. Among the most important are the following:

Jaraè On December 10, 2004, Colonel Mario Manriquez, a retired Chilean colonel, was arrested and charged with ordering the September 1973 execution of Victor Jara, an internationally-reknowned Chilean folksinger and playwright. Jara, 38 at the time, was detained and tortured to death at Santiago’s infamous National Stadium, where thousands were detained after the coup.  (For an example of Jara’s songs, Download vctor_jara_ni_chicha_ni_limona_.mp3.)

è In addition to the decision by Judge Juan Guzman noted above, on December 4, 2004, Chile’s Court of Appeals also lifted Pinochet’s immunity from prosecution with respect to his possible involvement in the  1974 murder of his precedecessor as Commander-in-Chief of the Chilean Army, General Carlos Prats Gonzales. _1124506_judge

_39306527_030721gcarprats150_1 General Prats, a highly-regarded “constitutionalist” who stalwartly opposed the Army’s intervention in political affairs, had fled Chile in September 1973 after the coup against Allende’s duly-elected government. 

In one of that decade’s clearest cases of international terrorism, General Prats and his wife Sofia Cuthbert were killed by a car bomb in Buenos Aires in September 1974.

In 2000, Eduardo Arancibia Clavel, a member of Chile’s DINA, its secret service, was convicted by an Argentine court of helping to organize the killing, and was sentenced to life in prison. Argentina also requested the extradition of six other DINA agents to stand trial in the case, plus Pinochet, who was indicted for first-degree murder as the “intellectual author” of the crime. Chile’s Supreme Court denied the extradition request in 2003, but the case was picked up by a Chilean prosecutor.  The recent ruling means that the case can proceed. Pinochet has appealed the decision to Chile’s Supreme Court.

è On November 29,Mascaras1_small  2004, the Chilean Government released the Valech report, a year-long investigation of human rights crimes committed by the Pinochet regime. The report, requested by Ricardo Lagos, Chile’s current Socialist President, documented the fact, long-denied by Pinochet and his loyalists, that systematic, widespread  torture had indeed been state policy during his reign — including more than 3400 instances of sexual abuse.  Even Pinochet’s eldest daughter was shocked by the report, which was based on nearly 28,000 interviews with victims of the junta’s repression – the first opportunity they had ever had to tell their stories. The victims who had managed to survive to tell their stories were offered modest pensions by the Chilean government in compensation. 52

In anticipation of the report, on November 5, General Juan Emilio Cheyre, the head of the Chilean Army, reversed the Army’s previous refusal to accept responsibility for these abuses, declaring:   

The (Chilean) Army has made the difficult but irreversible decision to acknowledge the responsibilities that it has as an institution in all the punishable and morally unacceptable acts of the past… Human rights violations never, and for no one, have an ethical justification.”2101712_1

è In October 2004,  Chile’s IRS filed tax evasion charges against the former dictator and his long-time financial advisor, Oscar Aitken. For these charges alone, Pinochet may face fines up to three times any taxes that he evaded, plus a jail term of up to five years. In late November, on the eve of the General’s 89th birthday, a Chilean judge did manage to freeze more than $4 million of Pinochet’s Chilean assets, pending the outcome of investigations for tax fraud and money laundering.

è In May 2004, Pinochet’s immunity was lifted by Chilean judges investigating the Condor case,  a 1970s conspiracy among several “Southern cone” dictatorships at the time (Argentina, Brazil, Bolivia, Uruguay, and Chile) with US support and coordination, to disappear political opponents. The decision was upheld in August.  Pinochet has denied all responsibility for the disappearances. 

THE RIGGS CASE

Allbrittonsm Riggs_logo So far, the main US contribution to these developments took place in July 2004, when the US Senate’s Permanent Subcommittee on Investigations released a report on General Pinochet’s offshore banking — especially his ownership of up to $15 millions of “funny money” in more than a dozen Pinochet-owned bank accounts at

Riggs National Bank (DC, Miami, London), Citibank (Miami), and Bank of America. Podiumx

The reported, which had been conducted at the behest of Senator Carl Levin, the Subcommittee’s ranking Democrat, revealed that ten key Pinochet-related accounts were handled by Washington DC’s Riggs National Bank. These accounts, plus numerous Riggs-managed offshore trusts and companies, were reportedly established for General Pinochet in the mid-1980s and 1990s  with the knowledge and active involvement of Rigg’s owner and CEO, Joseph L. Allbritton (Baylor Law ’49).

Allbritton, a prominent Houston-based banking and media magnate who is now in his seventies, is a close friend of the Bush family, and a trustee of the Lyndon B. Johnson Foundation, the George Bush Presidential Foundation, the Reagan Presidential Foundation, the Kennedy Center, the Houston Symphony, and the Houston Museum of Fine Arts. He has also served on the board of the National Geographic Society and Washington DC’s Federal City Council.

A former owner of the now-defunct Washington Star, Allbritton started acquiring Riggs in the early 1980s, eventually buying at least 40.1 percent of the $6.3 billion asset bank. He served  as Rigg’s Chairman and CEO until 2001, when his only son, Robert L. Allbritton, took over.

The Allbrittons also owns several other businesses, including Allbritton Communications Co., which controlled WJLA, Washington D.C.’s main Disney/ABC affiliate, plus TV stations in Little Rock, Tulsa, Lynchburg, Charleston, Harrisburg, and Tuscaloosa.

But Riggs National Bank was the crown jewel in the empire. Founded in 1815, it was Washington D.C.’s oldest and largest bank, touted as “the most important bank in the most important city in the world,” where “at least 21 First Families banked.”

It acquired a commanding share of the city’s “Embassy banking” business, handling  prominent diplomatic customers for key foreign embassys, like Saudi Arabia’s Embassy. (The US Senate Committee on Governmental Affairs continues to investigate Rigg’s relationships to the Saudis.

Prince_bandar2 These reportedly included more than 150 private accounts, one of which was apparently used, perhaps unintentionally, by Princess Haifa al-Faisal, the wife of Prince Bandar, Saudi Arabia’s Ambassador to the US, to relay funds to two September 11th 2001 hijackers. In September 2004, several families of September 11th victims filed a class action lawsuit against Riggs with respect to this matter.)

Valenti Under the Allbrittons, Riggs was not shy about recruiting political allies. Fellow Texan Jack Valenti (U of Houston, Harvard), the influential motion picture industry representative, is a long-time Riggs board member.

In 1997, Riggs acquired J. Bush & Co., an asset management firm owned by Jonathan J. Bush, George H.W.’s brother, George W.’s uncle and a former Chairman of the New York State Republican Finance Committee. In May 2000, Jonathan Bush briefly became CEO of the Riggs Investment Management Company, but now he concentrates on managing the private assets of wealthy clients at J. Bush & Co. In 2003, “JJ’s” Yale classmate, William H. Donaldson, was nominated by President Bush to head the SEC.

Ironically enough, in 1999, the US Treasury had even selected Riggs to redesign and manage its “CA$HLINK” cash management system, reportedly the world’s largest deposit/cash reporting system. 

_38168938_obiang300_ It is not yet clear whether “JJ” was involved in managing any assets for the bank’s wealthy private clients like General Pinochet, the Saudi Princess, or Equatorial Guinea’s dictator, Teodoro Obiang Nguema, the bank’s largest single private banking customer.

But other senior Riggs managers were involved in handling the relationship with General Pinochet, including the bank’s former President, Timothy C. Coughlin (Brown U., NYU MBA, US Marines, Federal City Council), who resigned in May 2004; Robert C. Roane, (UVA, George Washington MBA), the bank’s chief operating officer, and the former head of Riggs – London, who resigned on November 26, 2004Carol Thompson, Riggs’ former SVP for Latin America, who also resigned in 2004; and Raymond M. Lund, the former EVP of the International Banking Group, who left the bank in March 2004.   

Stevenbpfeiffer_1 Also implicated in the Pinochet affair was Steven B. Pfeiffer (Wesleyan ‘69 – Chairman Emeritus;  Oxford – Rhodes Scholar; Yale Law School, US Naval Commander; Council on Foreign Relations), a Riggs board member since 1989, a former chairman of the bank’s International Committee, a former Vice Chairman of Riggs Bank Europe Ltd., and the bank’s Chairman in 2001. Pfeiffer remains a senior partner at Fulbright & Jaworski, the leading DC law firm, where he  has served as head of the firm’s International Practice, and, from 1998 to 2002, its Partner-in-Charge. According to the Senate report, Pfeiffer and his law firm provided key legal advice to Riggs with respect to its handling of the Pinochet accounts. 

BANKING ON THE GENERAL

Riggs’ banking relationship with Pinochet may have dated back to the 1970s, when it was reportedly involved in helping to finance several Chilean arms deals. But it really heated up in the mid-1990s, when Pinochet came under investigation for more than 66 international criminal complaints involving human rights violations, drug trafficking, torture, assassination, illegal arms sales, and corruption, not only by Judge Garzon in Spain, but also by Argentina, Belgium, France, Switzerland, and the UK. The General was trying desperately to conceal his family’s assets around the world. 

According to the Senate report, Riggs National Bank participated in a long-term conspiracy to launder Pinochet’s offshore holdings and conceal their ownership from US federal bank regulators, including the Comptroller of the Currency. Quite coincidently, the bank also reportedly hired  R. Ashley Lee, an OCC bank examiner who happened to be in charge of auditing Riggs from 1998 to 2002.  

That helped Riggs conceal the Pinochet matter for a couple years. But in May 2004, Riggs  was fined $25 million in civil penalties for “willful, systemic” violations of anti-money-laundering laws” with respect to its dealings with two other dubious clients, Saudi Arabia and Equatorial Guinea.

In light of all these embarrassments, the Allbrittons decided to sell the bank. In July 2004, it agreed in principle on a $779 million sale to PNC Financial Services Group Inc. However, this  merger is now reportedly on hold until at least April 2005,  and it may never be consummated, given all the many lawsuits and investigations that have arisen out of Rigs involvement in money laundering. If permitted, the PNC transaction would effectively permit the Allbrittons and their close associates to “launder” their profits from more than twenty years of scandalous, morally-unconscionable behavior, undertaken at the behest of some of the world’s worst dictatorships.

Meanwhile, Riggs is fighting a number of other legal actions pertaining to this scandal. In April 2004, three law firms that specialize in shareholder derivative suits teamed up to sue Riggs’ directors for “intentionally or recklessly” ignoring the risks of failing to update the bank’s money laundering controls and dealing with dubious clients like the Saudis and Pinochet. 

In September 2004, several former Riggs senior managers and board members were named in a legal action filed by the courageous Spanish judge, Balthazar Garzon, who has been investigating human rights violations committed against Spanish citizens by the Pinochet regime. Judge Garzon has asked that US authorities seize the assets of their personal assets, prosecute them for money laundering,  and also freeze more than $10.3 million in alleged Pinochet assets.

_923083_garzon300

So far, the US Department of Justice has basically ignored Judge Garzon’s request.

(c) James S. Henry, SubmergingMarkets™, 2004.

Source: bloodbankers.typepad.com

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