SWISS TO RETURN ABACHA MONEY --- FINALLY

It’s been announced that the Swiss will return some of the stolen money that Nigeria’s former strongman, General Sani Abacha, had hidden with the gnomes more than a decade ago. Abacha and his family, along with his bankers, were confident that Switzerland’s secret baking regime would protect them and their assets, forever.

And to a large extent, that’s always been the case when it comes to the Swiss and their more dubious clients. For the same nation that has given the world cheese with holes, chocolate and cuckoo clocks, it is secret banking that has turned into the goose that continues to lay golden eggs.

And no amount of international ire is going to make them give that up.

As a nation of bankers banking on secrecy, they constantly decry the existence of dirty money, only to be caught with it time after time. At which time, as a nation of bankers who show no shame when it comes to gross hypocrisy, they insist that current regulations are sufficient to keep it from happening — at least, until the next time.

They actually insist, with a straight face, that they are more than willing to cooperate with other nations in hunting down and repatriating such assets.

Which, time after time, proves to be utter crap.

The Swiss will walk to the altar, but know better than to utter the vows.

In the Abacha case, it only took them 14 years to make the decision to do the right thing. True to the duplicitous nature of Swiss banking, they brag about how well they cooperate with the international community in the return of questionable assets. See, we’re returning the Abacha money. What they don’t say is the obvious — that it took so long because they simply ran out of any even-semi-reasonable excuse to keep it.

Add that to the list of other things they’re not saying, such as how they allowed the money to come under Swiss authority in the first place. They put the blame entirely on Citibank’s International Private Banking (IPB), rather than 1) their lack of any serious controls to keep stolen assets out of the country; 2) the blind eye that Swiss bankers had to turn in order to handle these funds; and 3) a blatantly oblivious (and for profit) attitude towards international agreements on the assets of Politically Exposed Persons (PEPs.)

As always, the Swiss banking authorities dress themselves in virginal white wedding gowns, hoping no one will notice that they are, as they have always been, nothing more than street corner hookers.

This is an excerpt from my book, The Sink, on the Abacha monies.

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It was business as usual for IPB when Nigeria’s General Abacha showed up with government funds in his pocket.

A career soldier and civil servant all his life, in 1988 Abacha had dispatched his oldest sons, Ibrahim and Mohammed to begin a relationship with IPB New York. A shell was created, called Morgan Procurement, and three accounts were opened in code names. Among them were Gelsobella for the account in New York and Navarrio for the account in London.

Oddly, the IPB “relationship manager” who handled the accounts later claimed that he didn’t have any idea that Ibrahim and Mohammed were related to General Abacha — a man recognized on the world stage for his audacious brutality — and wouldn’t become aware of that fact for nearly three years. It was only after the Abacha family relationship with IPB ended that documentation came to light suggesting that, at least, one IPB officer knew who his clients were. The bank’s paperwork read: “Father of Ibrahim and Mohammed, General Sani Abacha, is the current military ruler of Nigeria, where there is a lot of corruption.”

Seizing power, Abacha dissolved all political parties in Nigeria, forbade demonstrations against the new regime, censored the media and locked up a people who opposed him. Instead of canceling the account then and there, IPB did business with the Abachas for 11 years and helped them move $110 million through accounts in New York, London and Jersey.

It must be said that Citibank was not the Abachas only bank. Twenty different banks in Switzerland held more than 140 Abacha accounts. A substantial portion of the funds located there arrived after the 1998 Swiss money laundering codes were put into law. Those codes had been held up to the rest of the world by the Swiss themselves as proof positive that the bad old days of dirty money were over, that money stolen by dictators was no longer welcome in Switzerland.

Sani Abacha died in June 1998, apparently of a heart attack. He was 54. A best-estimate has it that he stole $4.3 billion, some $2.3 billion of it directly from the national treasury. The remaining two billion came in from government contracts he put through his own shell companies and bribes from foreign contractors. Shortly after his death, his widow Mariam was stopped at Lagos airport trying to leave for Saudi Arabia. She said she was going to the Hajj. Her 38 suitcases were filled with cash. Reports vary on the amounts involved, ranging from $50 million-$100 million.

Around the same time, Mohammed Abacha contacted IPB in London and asked that $39 million held in his account there be sent to three different accounts outside the UK. But that money was on time deposit and wouldn’t come due for another two weeks. Mohammed clearly sensed the urgency of the matter and urged Citibank London to find a way around the time lock. IPB responded favorably by offering Mohammed an interest free overdraft of $39 million. IPB had it secured against the money on deposit, and Mohammed Abacha got his $39 million out of the country. Unfortunately for him, when Mohammed returned home he was arrested and charged with murder in connection with the death of the wife of one of his father’s political opponents. He was promptly locked up.

The man who succeeded Sani Abacha, General Abdulsalami Abubakar, now went to all of his predecessor’s cronies and demanded that they return whatever money they’d got from him. He collected $770 million and confiscated some property. He made good on his promise to call elections and another former general, Olusegun Obasanjo — who’d been a political prisoner under Abacha — became president in May 1999. It was Obasanjo who intensified the international efforts to reclaim Abacha money.

By then, Credit Suisse Private Banking had discovered Abacha accounts holding $232 million. The Swiss Federal Banking Commission (SFBC) ordered a search of all banks in the country and in October put a freeze on Abacha accounts at five other banks.

In January 2000, the Swiss police announced that a total of $645 million had now been identified and frozen. Although a Swiss judge would later unblock $115 of that. Six banks were reprimanded by the SFBC for serious omissions and individual failures in handling the Abacha accounts. Another six were castigated for discernible weaknesses in their controls. And six Swiss bank personnel were actually convicted for money laundering and other offences over the Abacha money. By sheer coincidence, the gnomes at UBS suddenly discovered they too were holding Abacha accounts funds. And another $60 million was frozen there.

Authorities in Luxembourg froze $670 million in eight separate accounts for seven offshore shell companies that the Abacha brothers held in that country. And authorities in Liechtenstein froze $109 million sitting in one shell company account and another DM100 million in another.

The Nigerians had turned to the UK for help but no banks in Britain or Jersey seemed particularly anxious to co-operate. When asked to freeze accounts, they refused on the grounds that no criminal proceedings were underway in Nigeria. However, in Spring 2001, Britain’s Financial Service’s Authority (FSA) announced the discovery of $300 million sitting in 42 Abacha accounts held in 23 different banks. The turnover of these accounts for the period 1996-2000 was nearly £1 billion (then about $1.3 billion). But instead of pressing for prosecution against the banks and bankers in violation of UK money laundering laws — if nothing else, they were dealing in stolen funds — the FSA suffered an enormous loss in credibility by simply slapping the wrists of 15 banks for “significant weaknesses” in money laundering controls.

In July 2002, Nigeria’s Supreme Court ruled there was insufficient evidence to prosecute Mohammed on the murder charge, leaving him still facing 111 counts of laundering and corruption. While the court decision mystified some people, President Olusegun Obasanjo ordered negotiations to begin with the Abacha family for the return of Nigeria’s money.

The two sides worked out a deal, brokered by the Swiss, wherein the Abachas agreed to hand back than $1.35 billion in exchange for the government agreeing to free Mohammed from the cell where he’d been for the past three years. Under the terms of the agreement, the Abacha family would be permitted to keep around $100 million, which they somehow convinced the Swiss they’d acquired prior to Sani Abacha taking over as President. That a career soldier and public servant could amass such a fortune legally belies belief. But the Swiss fell for it and Obasanjo agreed the deal, hoping to put the matter behind his government. When Mohammed agreed to the settlement, Obasanjo ordered him released. As soon as he got out, Mohammed denied agreeing to return the family’s billion and the settlement collapsed.

(c) Jeffrey Robinson 2002, 2009, 2013

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