Chinese Corruption In America/Canada-BCCI-The Clinton Years

Chinese Corruption In America/Canada-

BCCI-The Clinton Years

 

Note the various references to Hilary’s assistance like:

(1) The real story, shorn of its diplomatic awe, begins 22 years ago with a 1978 move by the Bank of Credit and Commerce International, BCCI, to become established in the United States.

BCCI subsequently crashed in 1991 when a multi-territorial investigation revealed its connections to organised crime, arms smugglers and intelligence agencies. Investigators have since dubbed it "the Bank of Cocaine and Conmen International".

Formed by a Pakistani businessman and marketed as "an Arab bank", BCCI used a group of American investors as a front to purchase two US banking institutions - the National Bank of Georgia, and Financial General Bank in Washington DC. Because of foreign ownership restrictions, BCCI could not appear to be the real owner of the banks.

Assisting BCCI in this subterfuge was Jackson Stephens, an Arkansas stockbroker based in Little Rock. Stephens brought in three lawyers from Little Rock’s Rose Lawfirm:Hillary Rodham Clinton, Vince Foster and Joseph Giroir.

(2) James Riady was appointed to the board of directors, and helped engineer a buyout of the First National Bank of Mena, a town of 5,000 people whose only claim to fame was a secret CIA supply base for the Nicaraguan Contra rebels and the aforementioned cocaine-smuggling operation. 

Worthen Bank became politically close to the future US President, and Hillary Clinton’s Rose Lawfirm. Bill Clinton banked with Worthen and steered much of Arkansas’ state business its way. Much of Mena’s billion-dollar-a-year drug money went through Worthen accounts, then on to BCCI branches in Florida and Washington DC as part of the money laundering loop.

(3) After meeting Hillary Clinton in mid-June, Hubbell held further discussions with Indonesian businessmen James Riady and John Huang. White House records show the two Lippo executives visited the White House every day from June 21 to June 25, 1994.

Hubbell spent much of June 23 with Riady, and four days later the disgraced politician was paid US$100,000 by the Hong Kong Chinese Bank, ostensibly to put him on the Lippo Group payroll. The bank, as investigators now know, is majority-owned by Chinese military intelligence.

The payoff didn’t save Hubbell, who was subsequently jailed.

etc., etc.

http://www.investigatemagazine.com/march00pres.htm

All The President's Men

What’s also special about the photo? Well, the same week that Investigate began making inquiries to locate the original APEC video footage taken in New Zealand, the raw footage disappeared from TVNZ’s tape library and has not been seen since.

But it’s the man in the photo that this story is about. His name is James Riady, and to those in the know he currently heads the list of America’s Most Wanted – an alleged criminal on the run from US Justice. And that’s why the photo is at the centre of a political furore in the United States: why is President Clinton exchanging pleasantries in Auckland with a wanted man?

Funnily enough, it’s the same question asked in New Zealand back in June 1999, when Riady first turned up for a special meeting with Prime Minister Jenny Shipley.

It should have been just another unnoticed thread in the rich tapestry of New Zealand politics, but the Indonesian’s fleeting appearance in our corridors of power had all the subtle discretion of a glow-in-the-dark cat collar.

Riady heads the Lippo Group, one of Indonesia’s largest companies - but a company with heavy organised crime connections.

The New Zealand Government agency Tradenz extended the invitation for the June visit with a little-publicised announcement that Riady would receive a "red carpet" welcome in New Zealand. That welcome included a special meeting with Prime Minister Shipley, and a series of meetings with leading New Zealand business executives.

What’s extremely significant is that Riady, and his company, are at the centre of a major spying and bribery scandal that’s blown up around US President Bill Clinton.

Amazingly, New Zealand’s intelligence agencies had failed to brief Prime Minister Shipley on this point, despite a claim by to the contrary in Parliament. The closest the intelligence briefings – released to Investigate under the Official Information Act - get to the real Riady is this:

"Most important of all to the Riady family in business are relationships and networks."

As you’re about see, that comment is a dramatic understatement, and we’ll examine shortly how Lippo Group’s incursions into New Zealand and Australia could have security implications.

The latest twist in the Riady scandal comes in a letter from US Congressional investigator Dan Burton to Beth Nolan, legal Counsel to the President.

"Upon President Clinton’s return from his trip to New Zealand for the annual meeting of the Asian Pacific Economic Cooperation (APEC)," writes Congressman Burton, "I was dismayed to read the following report from the Wall Street Journal on September 24, 1999:

" ‘TOGETHER AGAIN: James Riady, the Indonesian businessman central to Donorgate, used an economic summit in New Zealand last week to chat with Clinton. The White House won’t talk about it, but Indonesians say Riady didn’t discuss anything "sensitive" with the President.’

"If the report is true," continues Burton, "I am concerned that the President would meet with an individual who has continued to evade questioning by the Congress and the Department of Justice about his pivotal role in the campaign finance scandal that came to light just prior to the President’s re-election in 1996.

"As you are aware, Mr Riady was recently named by John Huang as the architect of a massive scheme of illegal conduit political contributions in the United States.

"I cannot understand what purpose would be served by the President meeting with Mr Riady except to urge him to cooperate with Federal investigators.

"From his home in Indonesia, Mr Riady appears to have orchestrated a complex scheme to launder over $4 million (NZ$8 million) in illegal political contributions to Clinton/Gore ’92, the Democratic National Committee (DNC), the Democratic Senatorial Campaign Committee, state Democratic parties, individual candidates, and non-profit groups in 1992 and 1996."

We’ll return to Burton’s letter shortly, but first a little background context. Here’s the story the New Zealand press gallery didn’t tell you about Riady, and the story the Government didn’t know either.

"The Lippo Group is one of Indonesia’s largest conglomerates in terms of market capitalisation with estimates of value putting it at having US$11 billion in assets.

"The vision of its founder Mochtar Riady is to transcend the institutional limitations placed upon organisations run in the traditional overseas Chinese pattern and adopt a modern publicly owned and professionally managed pattern of business.

"Mochtar has formed alliances and joint venture partnerships with world class multinational corporations and has high calibre professional management staff working for him.

"The Lippo empire rose out of the success of the Lippo Bank. Unlike just about all other banks in Indonesia its founder Mochtar Riady tended to shun the Suharto connections that for other conglomerates in Indonesia were the keys to success.

"He avoided lending to politically connected groups or to state enterprises and instead built his business on legitimate retail and trade finance."

Yes. Well.

The real story, shorn of its diplomatic awe, begins 22 years ago with a 1978 move by the Bank of Credit and Commerce International, BCCI, to become established in the United States.

BCCI subsequently crashed in 1991 when a multi-territorial investigation revealed its connections to organised crime, arms smugglers and intelligence agencies. Investigators have since dubbed it "the Bank of Cocaine and Conmen International".

Formed by a Pakistani businessman and marketed as "an Arab bank", BCCI used a group of American investors as a front to purchase two US banking institutions - the National Bank of Georgia, and Financial General Bank in Washington DC. Because of foreign ownership restrictions, BCCI could not appear to be the real owner of the banks.

Assisting BCCI in this subterfuge was Jackson Stephens, an Arkansas stockbroker based in Little Rock. Stephens brought in three lawyers from Little Rock’s Rose Lawfirm: Hillary Rodham Clinton, Vince Foster and Joseph Giroir.

The Clinton connection - as you’ll see - continued to grow, but in the meantime Hillary Clinton and her two law partners helped Stephens, via his company Systematics Inc, to transfer control of Financial General to BCCI.

Financial General’s Washington location meant many politicians and civil servants on Capitol Hill were account holders. The intelligence benefit to BCCI and those associated with the crime bank was enormous.

In 1983, Lippo Group began its own US invasion, choosing to do so in the apparent backwater of Little Rock, Arkansas, where Bill Clinton was Governor. Lippo Finance & Investment in Little Rock brought in a former aide to President Jimmy Carter, Vernon Weaver, to chair the company and Governor Clinton acted as a character reference for Lippo boss Mochtar Riady.

In 1984, Jackson Stephens joined forces with Lippo Group to purchase stock in Arkansas’ Worthen Bank, based in Little Rock. Their buy-in coincided with the establishment of a major cocaine importation operation at nearby Mena, Arkansas, and the laundering of US$100 million a month in drug money through the local banking system and ultimately BCCI.

BCCI investor Abdullah Taha Bakhish joined Riady as a co-owner of Worthen.

By 1985, things began to get hot for Bill Clinton, but Worthen Bank came to the rescue. Clinton had authorised Arkansas state pension funds to be deposited with Worthen by a brokerage firm, but the funds lost 15% of their value as a result of bad short-term investment decisions. Although Jack Stephens wrote out a $52 million Worthen cheque and saved Clinton’s hide, it paved the way for Lippo Group to take a larger role in Worthen. Over the next few months, the Riadys increased their holding to 40% of the bank.

James Riady was appointed to the board of directors, and helped engineer a buyout of the First National Bank of Mena, a town of 5,000 people whose only claim to fame was a secret CIA supply base for the Nicaraguan Contra rebels and the aforementioned cocaine-smuggling operation.

Worthen Bank became politically close to the future US President, and Hillary Clinton’s Rose Lawfirm. Bill Clinton banked with Worthen and steered much of Arkansas’ state business its way. Much of Mena’s billion-dollar-a-year drug money went through Worthen accounts, then on to BCCI branches in Florida and Washington DC as part of the money laundering loop.

It is around this time that another character becomes integral to the plot: Lippo Group executive John Huang. Huang travelled to Arkansas to take up a role as James Riady’s right-hand man in Little Rock.

Mochtar Riady, meanwhile, also formed a joint venture operation with Jack Stephens in Asia. Together, they purchased the Seng Heng Bank in Macau – the former Portuguese island colony close to Hong Kong that’s controlled by Triad organised crime syndicates. Macau is effectively an Oriental Las Vegas, and gambling is a primary source of government revenue. Even the recent Chinese takeover of the territory seems unlikely to dent the criminal powerbase.

Systematics Inc, the Stephens-owned software company, supplied software to Macau’s Banco Nacional Ultramarino - the state bank of the colony.

Over the next five years, the Riadys consolidated their empire. Selling out of Worthen Bank in 1987 they moved from Little Rock to Los Angeles to establish Lippo Bank LA.

The Worthen experience bit them hard: the bank had lent $80 million to entities associated with either the Riadys or Stephens. In the end, an investment firm collapsed owing Worthen $100 million, and a subsequent investigation criticised Worthen for all the inside loans to its owners.

Lippo LA came unstuck as well, and investigators there launched a criminal investigation in 1990 after discovering that a 21 year old teller had made more than 900 suspicious wire transfers to the Lippo-owned Hong Kong Chinese Bank. Each transaction totalled just under the magic US$10,000 limit which had to be reported to money-laundering investigators.

Nearly all the transfers involved false names, and were initialled by a supervisor. Despite that, investigators could find no documents indicating Lippo Bank LA’s top management knew of the practice.

US banking regulators issued three "cease and desist" orders against Lippo LA up until 1997, on the basis of sloppy management and suspicious funds transfers.

In another joint venture with Jack Stephens, the Riadys purchased the Hong Kong branch of BCCI, with James Riady and Johnny Huang relocating to run Lippo Bank Hong Kong. When Senator Al Gore visited Asia in 1989, accompanied by Huang, the trip was paid for by a Buddhist organisation, Fo Kwang Shan.

In 1991, an entity known as China Resources Company Limited began purchasing shares in Lippo’s Hong Kong Chinese Bank. The price paid for the shares was fifteen percent below the market value. US intelligence agencies have since claimed China Resources Co is a front for Chinese military intelligence.

During his relationship with Worthen bank, Arkansas Governor Bill Clinton passed several pieces of legislation favourable to Lippo’s US interests. The payoff? In 1992, with the Clinton/Gore presidential campaign on the ropes over the Gennifer Flowers affair and donations drying up, Lippo Group organised for Worthen Bank to pay the Clinton campaign fund a massive US$3.5 million bailout.

But that wasn’t the worst of it.

In addition to the money channelled via the bank, James Riady and the Lippo Group were personally funding Clinton’s presidential campaign – a move that’s illegal under US laws restricting foreigners from making political donations.

In August, 1992, James Riady flew from Indonesia to Los Angeles to take part in a fundraiser for Clinton. Federal investigators piecing the jigsaw together allege Riady took a limousine ride with Governor Clinton, handing over US$100,000 and promising a further US$1 million.

So far, it appears Riady and Huang funnelled US$700,000 in illegal donations to the Clinton campaign, via Lippo Group employees and subsidiaries. Most did not live in the US.

One of the questions posed by US congressional investigators is "Why?". What did the Riadys hope to gain by funding Bill Clinton? They now believe James Riady and the Lippo Group were engineering a major espionage operation on behalf of the Chinese government, a deliberate attempt to bribe an American President, compromise US security and steal US secrets.

The operation, involving more than a hundred people, many of them Chinese, has been dubbed "the Bamboo Network" by investigators.

By January of 1993, with Clinton now President-elect, Huang and Riady arranged for another $100,000 to drop into the President’s coffers and, in February, Huang organised a meeting between Mochtar Riady and the President.

The elder Riady, whose business philosophy is quoted in New Zealand Government briefing papers as "Every network has to have its foundation laid on special, personal, human connections…what I am looking for is what my partners can offer in personal contacts and business connections", urged the new US President to reinstate China’s "most favoured nation" status. He also told Clinton to relax economic sanctions against China, imposed after the Tiananmen Square massacre.

Clinton, whose election campaign was significantly funded by the Riadys, obeyed. In June of 1993, China was given "most favoured nation" status. A week or two later, purely coincidentally, the Riadys make US$163 million in profit when China Resources Company Ltd increases its share price offer for Lippo’s Hong Kong Chinese Bank to a figure 50% above market value.

James Riady’s influence with Clinton was so great that on April 19, 1993, at the very moment the FBI was raiding the Branch Davidian religious complex at Waco Texas, killing scores of men, women and children in the process, Bill Clinton was chatting with James Riady in the Oval Office while a TV set in the background was carrying footage of the tragedy.

Clinton even had time during this national disaster to give Riady a tour of "the Situation Room" - a kind of "Bill fiddled while Waco burned" scene.

It is the beginning of a scandal that is seeing President Clinton dubbed "China’s first US President" by some commentators.

And despite the briefing papers from New Zealand trade officials who told Prime Minister Shipley that James Riady and the Lippo group shunned the cronyism surrounding Indonesia’s President Suharto, a US Congressional Investigation paints a very different picture.

"The Riady family was able to show off its close ties to President Clinton during the 1993 APEC summit in Seattle, Washington. Lippo organised a group of Indonesian businessmen to visit Little Rock, Arkansas, before the summit.

"A sister-state agreement between Arkansas and Indonesia was to be signed at a ceremony during the APEC summit, and James Riady planned to have President Clinton and President Suharto attend."

Despite reservations from White House staff, who told Riady that "the human rights controversy surrounding East Temor (sic) may be an impediment," the Congressional report notes that "Ultimately, during the 1993 APEC, President Clinton did meet with President Suharto, along with James Riady, over the objections of his staff."

Clinton met Suharto again during the G-7 summit in Tokyo in July 1993, and then sent a handwritten note to James Riady saying he’d enjoyed his visit with Suharto.

The briefing to New Zealand’s then-Prime Minister, Jenny Shipley, says "The [Lippo] group is seen as not having ties with President Suharto’s family, hence it is regarded as clean and fits in with the spirit of reform."

At the full APEC summit in 1994, hosted by Indonesia, Clinton spent more time with the Riadys, stopping only to pose in a batik shirt alongside the New Zealand Prime Minister at the time, Jim Bolger.

In 1994, US Secretary for Commerce Ron Brown visited China carrying an "unprecedented" US$5.5 billion dollars worth of trade deals. Included in the package is a $1 billion deal for an Arkansas firm, politically linked to Clinton, to expand and manage Lippo’s 725 megawatt coal-burning power plant in China’s Fujian province.

In April 1994, Clinton’s appointee to the US Justice Department, Associate Attorney-General Web Hubbell, resigned from his post amid allegations of fraud relating to his involvement with the Rose Lawfirm and the Whitewater scandal.

After meeting Hillary Clinton in mid-June, Hubbell held further discussions with Indonesian businessmen James Riady and John Huang. White House records show the two Lippo executives visited the White House every day from June 21 to June 25, 1994.

Hubbell spent much of June 23 with Riady, and four days later the disgraced politician was paid US$100,000 by the Hong Kong Chinese Bank, ostensibly to put him on the Lippo Group payroll. The bank, as investigators now know, is majority-owned by Chinese military intelligence.

The payoff didn’t save Hubbell, who was subsequently jailed.

Asked at a news conference if it wasn’t more than a little suspicious that Hubbell ended up working for Lippo, President Clinton told reporters "To the best of my recollection, I didn’t know anything about his having that job until I read about it in the press. And I can’t imagine who could have ever arranged to do something improper like that and no one around here know about it."

But less than two weeks after Lippo’s payoff to Hubbell, the Clinton administration decided to appoint John Huang as the new Assistant Secretary of the US Commerce Department. Huang’s resignation from the official payroll of the Lippo Group was marked with a US$800,000 golden parachute.

Under US law it is illegal to export high-technology material from the US. This was to enable America to maintain a military and/or commercial edge over possibly hostile nations.

But armed with an interim top-secret security clearance, courtesy of Commerce Secretary Ron Brown, Huang found himself suddenly in a position to authorise technology transfers to places like Indonesia and China. Incredibly, Huang’s security clearance was issued without the routine FBI and foreign security checks.

Investigators have discovered that, on 37 separate occasions, after attending CIA briefings on encryption technology, Johnny Huang left the building a short time later and went to Lippo’s offices, where he then made long distance phone and fax calls to overseas locations.

The New York Daily News has reported that US intelligence services subsequently determined that Huang was passing classified trade information to Lippo Group headquarters in Jakarta – his former bosses.

How did Huang end up as an Assistant Secretary with a top secret clearance in the US Commerce Department? The London Times quotes one source as saying it was Hillary Clinton’s idea.

"He was not Ron Brown’s guy, and his presence caused intense conflict. Huang was carrying water for the White House."

Huang made around 70 "water deliveries" to the White House. And all the time, China’s influence in Washington was growing too. During 1994 and 1995, the Clinton administration allowed AT&T to sell its secure communications system to the Chinese Army, in a deal known as "Hua Mei". In a dramatic backfire, the Chinese reconfigured the encryption technology and re-exported it to Iraq for use in air defence systems.

President Clinton also approved the sale of surveillance system technology to China, under the aegis of a cooperation agreement between Chinese police and the US Justice Department.