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Dope Money II

One would have thought that Rep. Maxine Waters' (D-CA) grilling of Treasury Secretary Larry Summers at last September’s Russian money laundering hearings would be enough to get the Clinton Administration’s attention. Rep. Waters, if you remember, was concerned that Citibank -- and virtually every major bank that had been convicted of money-laundering charges—was receiving little more than a slap on the wrist for their participation in a federal crime. Of the 135 banks that have been convicted of money laundering charges not one of them has lost their charter. Waters raised this point at the money laundering hearings and directly to Sec. Summers. She received hesitation and a wonderful exhibition in word-parsing — it was quite a sight and one that left an impression on virtually all who witnessed it.

This past November, the Clinton administration had an opportunity to address Rep. Water’s concerns when it unveiled its National Money Laundering Strategy. However, while the Strategy was strong in many respects, it failed to address Rep. Water’s point, that no clear guidelines had been provided whereby the U.S. government would be willing to strip a bank of its charter (its legal right to do business). It was a glaring omission and one that further added salt to the wounds of those who have been promised the world but given crumbs in the effort to stop money laundering in the nation’s major banks.

This past Nov. 12 Rep. Waters penned a letter to Attorney General Janet Reno that raised critical issues surrounding the investigation of Raul Salinas and Citibank. It is alleged that Salinas and Citibank jointly laundered illegal drug money. The case, maybe more than any other, raises the critical issue of whether the nation’s largest banks receive preferential treatment when found involved in illegal activity. Not only does the investigation cause such questions to be reasonably raised, but so does the treatment of Rep. Waters and her inquiries into the matter. The Nov. 12 letter she wrote to Attorney General Reno was not her first but rather her 5th such letter with no definitive answer or plan of action regarding the matter coming from the Attorney General’s office. For many who have looked into the matter, it is stunning for an elected official to receive such treatment.

In Rep. Water’s letter she raises the possibility that in the eyes of the government, Citibank may be "too big to fail". The lack of response that Water’s letter has received only gives credence to such a charge. And now that former Secretary of the Treasury Robert Rubin has accepted a position as an executive at Citigroup/Citibank one can only wonder is it "too big to fail"? What follows is Rep. Waters letter, it speaks for itself and eloquently argues that in America and only months before the end of the second millennium, a double standard of justice still prevails.

November 12, 1999
The Honorable Janet Reno
United States Attorney General
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Room 4400
Washington, D.C. 20530-0001

Dear Attorney General Reno:

I have written to you on January 22, 1998, April 9, 1998, April 22, 1998, and October 1, 1998, about the investigation of Citibank/Citicorp in the Raul Salinas case. The response I received from your office stated that the "investigation of allegations of involvement by Raul Salinas and Citibank in money laundering is ongoing" and that your office was unable "to comment beyond what is in the public record." To date, there has been no announced action from your office.

On November 9th and 10th of this year, the Senate Permanent Subcommittee on Investigations, which is chaired by Senator Susan Collins and Senator Carl Levin, held hearings which focused on Citibank/Citicorp and money laundering. Their staff presented a comprehensive report on the Citibank/Citicorp case involving Raul Salinas and other Citibank/Citicorp cases involving alleged money laundering.

I believe that Citibank/Citicorp is attempting to excuse itself from possible criminal action by blaming weaknesses in the private banking system. Citibank/Citicorp is also alleging that the many problems in their private banking division have been cleared up. Citibank's attempt to shift responsibility to the private banking system and to highlight the improvement in their internal controls, does not negate the fact that Citibank/Citicorp may have violated the law of the land by being an accessory to drug money laundering. At this point, I am extremely worried that there may be an effort to excuse Citibank/Citicorp by federal banking regulators, the Department of the Treasury and the Department of Justice. There is suspicion by myself and others that Citibank/Citicorp is "too big to fail."

I have attempted to draw your attention to the seriousness of Citibank/Citicorp's private banking operations in Mexico, and now in Africa and Pakistan, and to get a strong legal response from the Department of Justice, whose mission it should be to indict criminals even in very high places. It appears you have cooperated with the Department of Treasury in developing legislation and rules that would create new penalties for future money laundering activities but you have failed to answer whether Citibank/Citicorp was involved in illegal money laundering activities.

Attorney General Reno, this administration is responsible for the prosecution of low-level crack dealers who receive mandatory minimum sentences of five years for five grams of crack cocaine. These laws are responsible for filling up America's prisons. Many of these low-level drug dealers are first-time offenders and are mostly minorities. Many of these young men and women will never be able to integrate back into American society because of their felony convictions. I bring this to your attention because the drugs that are on America's inner-city and suburban streets are there because of the great profits that big-time dope dealers can reap from selling drugs. I hope you realize that if there was no profit in the drug trade, there would be no drugs on the streets. If drug traffickers were unable to launder their drug money, then they would be unable to create drug enterprises.

Unlike America's poor, Citibank/Citicorp officials and private banking managers can afford to send their children to expensive schools, enjoy lavish vacations, live in affluent neighborhoods and enjoy a fine quality of life. Maybe you are unable to see the connection between the alleged money laundering at Citibank/Citicorp and these young, poor, and mostly minority men and women who are filling up America's prisons, but I see it and feel it deeply, and I will not go away.

I am, today, demanding a response from you about the so-called investigation of Citibank/Citicorp and their alleged money laundering, particularly as it relates to Raul Salinas. It is clear that Raul Salinas, who is now legendary for his criminal activities, deposited not legally earned money, but drug money into Citibank/Citicorp's private banking system.

I am further demanding that you do not allow the statute of limitations to run out on this case. According to the report released by the Senate's Permanent Subcommittee on Investigation's Minority Staff, "In the United States, the U.S. Attorney for the Southern District of New York initiated an investigation into whether the Citibank private bank or any of its employees should be charged with money laundering in connection with the Salinas accounts. No indictments have been brought, and the five-year statute of limitations may soon bar any prosecution of these matters." (p.25)

If you allow the statute of limitations to run out without answering how Citibank/Citicorp is able to set up fake companies and wire transfer drug money offshore through their private banking system, then you are just as guilty as the drug dealers who are devastating America's communities, including the 35th district of California that I represent.

I am releasing this letter to the press and I challenge you to publicly respond to my concerns.


Maxine Waters

Member of Congress

Wednesday, May 31, 2000

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