July 25, 2010
WMR has learned from knowledgeable sources who have attempted
to locate the global assets of the now-defunct Stanford Financial
Group and its parallel Stanford International Bank, Ltd. in
the Caribbean nation of Antigua and Barbuda, that the global entity
resembles the former "bank of choice" for the CIA, the Bank
of Credit and Commerce International (BCCI).
BCCI's fortunes began to turn sour in 1988 when its
involvement in money laundering began to become public. A few years
earlier,
Allen Stanford moved from Texas to the Caribbean island of
Montserrat to start up Guardian International Bank. Stanford's bank
later abandoned Montserrat and moved to Antigua where it was
re-named Stanford International Bank. As BCCI began to crumble,
Stanford was able to pick up the pieces.
Within ten years, Stanford Financial Group had replaced BCCI as the company of choice for "The Company," the CIA.
Investigators who have delved into the records of Stanford
reveal, "for more than twenty years, multiple US government agencies
watched on as Allen Stanford built a global web of fraudulent
financial companies that were managed from Stanford's corporate
headquarters in Houston, Texas. The lynch pin of the Stanford
fraud was of course, the offshore bank in Antigua - Stanford
International Bank (SIB)."
The Israeli Connection to Stanford
When SIBC went into receivership, court documents show that
among SIBC's depositors was Yair Shamir, the chairman of Israel
Aircraft Industries (IAI), the managing partner of the
Catalyst Fund -- an Israeli venture capital firm that funds many U.S.
defense and aerospace firms, the former chairman of El Al
Airlines, and a former Colonel in the Israeli Air Force. Shamir is
also politically powerful as he is the son of former Israeli
Prime Minister Yitzhak Shamir.
Shamir has had his own run-ins with the U.S. Securities and
Exchange Commission (SEC), which were settled on January 26, 2009 -
just three weeks before the SEC filed a massive securities
fraud suit against Stanford. Catalyst Fund investors are European banks,
some of which are being sued for their involvement as
correspondent banks for SIBL. In 2006, Stanford invested in a company
funded
by the Catalyst Fund, Cyalume, which makes products that
utilize a chemical reaction to produce light. According to an SEC
filing,
most Cyalume's revenue is from contracts with the U.S.
military and NATO. At the time of insolvency, Stanford Financial Group
owned
6.66% of Cyalume's stock. Other Cyalume shareholders include
Ehud Barak, Israel's Minister of Defense and Deputy Prime Minister,
former vice chief of staff for the US Army General Jack
Keane, and retired US Navy Commander in Chief, Pacific fleet, Admiral
Archie
Clemins.
Cyalume's on-line biography if Shamir states: "Yair Shamir
has been a director of Cyalume since December 19, 2008. Mr. Shamir is
the
Chairman and Managing Partner of Catalyst Investments and the
Chairman of IAI, Israeli Aerospace Industries. From 2004-2005, Mr.
Shamir was Chairman of El Al, Israeli Airlines and lead the
privatization process of the firm. From 1997-2005 Served as Chairman
and CEO of VCON Telecommunications Ltd. From 1995 to 1997,
Mr. Shamir served as executive vice president of the Challenge
Fund-Etgar L.P. From 1994 to 1995, he served as Chief
Executive Officer of Elite Food Industries, Ltd. From 1988 to 1993, Mr.
Shamir served as Executive Vice President and General Manager
of Scitex Corporation, Ltd. Mr. Shamir served in the Israeli Air
Force as a pilot and commander from 1963 to 1988. During his
term in the Air Force, Mr. Shamir attained the rank of colonel and
served as head of the electronics department, the highest
professional electronics position within the Air Force. He currently
serves as a director of DSP Group Corporation and also serves
as director of a few private hi-tech companies. Mr. Shamir holds a
B.Sc. Electronics Engineering from the Technion, Israel
Institute of Technology.
Mr. Shamir also served as a member of the board of directors
of Mercury Interactive, LLC from 1997 to 2005. In September 2008, Mr.
Shamir settled a complaint filed by the SEC which alleged
that certain independent directors of Mercury (including Mr. Shamir)
recklessly approved backdated stock option grants and
reviewed and signed public filings that contained materially false and
misleading disclosures about the company's stock option
grants and company expenses. Without admitting or denying the
allegations
in the SEC's complaint, in order to settle the charges
against them, each of the independent directors implicated (including
Mr.
Shamir) agreed to permanent injunctions against violating
certain provisions of the securities laws, paid a financial penalty,
and retained the ability to serve as a director or officer of
U.S. public companies."
WMR has earned from defrauded Stanford customers that on
December 19, 2008, Cyalume entered into a $33 million credit arrangement
with Toronto Dominion Bank, which accepted the billions of
dollars of wire transfers to fund Stanford International Bank CDs
(it is noteworthy that none of the money to purchase Stanford
International Bank CDs never actually made it to Antigua and SIB
never held any funds – Toronto Dominion [TD Bank]accepted
wires to fund CDs and then transferred the funds to bank accounts in
Houston). Stanford Financial Group CFO James Davis, who plead
guilty in August 2009, went to Israel to meet with Shamir and Prime
Minister Netanyahu in the fall of 2007.
A substantial portion of the depositors in SIB are Venezuelan
citizens who hid their funds off-shore to avoid taxation by
Venezuela's government of President Hugo Chavez. Antigua
announced it was completing its acquisition of West Indies Oil Company
(WIOC) with a $68 million loan from Venezuela's state-owned
oil firm, PDVSA, to PDV CAB, a private company for which Antigua is
the sole shareholder. Antigua already owned 25 percent of the
shares of WIOC. There is yet another Israeli angle, along with a
link to BCCI, in Stanford's Caribbean operations.
The other 75 percent of WIOC was owned by Bruce Rappaport, an
Israeli-born Swiss citizen and billionaire shipping giant and banking
tycoon who owned the Inter Maritime Bank in Geneva, which was
used to provide payments to BCCI during the Iran Contra scandal.
Rappaport died in January 2010. The New York Times reported
Rappaport was close friends of the former CIA director William Casey,
who was implicated in both the Iran-Contra and BCCI.
Rappaport owned companies in more countries than can be tracked, all
with
obscure names that are just acronyms. According to The Times,
Rappaport was a big financial backer of the Iraq oil pipeline
project in the 1980s and was hired by Iran to lobby the
United States to help get some kind of assurance if they built the 540
mile oil pipeline to Israel that the Israelis wouldn't just
damage it like they did during the Iran/Iraq war. A State Department
statement on the topic said, 'Iran had destroyed Iraq's oil
terminals in the Persian Gulf early in the Iran-Iraq war. The proposed
540-mile pipeline, running from Iraq's Kirkuk oil fields to
the Jordanian port of Aqaba near the Red Sea, would have more than
doubled that nation's oil exports. It also would have been a
'trade bonanza' for the United States and the companies seeking to
build it.'"
WMR learned from sources close to Mossad that one of the
chief Iraqi interlocutors on the pipeline deal was then-Iraqi Foreign
Minister Tariq Aziz, now imprisoned and in failing health in
an Iraqi prison recently transferred to Iraqi government control
from the U.S. military occupation authorities.
Rappaport served as Antigua's ambassador to Israel under
former Antiguan Prime Minster Lester Bird, whose administration ended
in 2004 when Prime Minister Baldwin Spencer ended the Bird
family's long reign of ruling the island since independent from Great
Britain. Lester Bird had illegally sold Rappaport 75 percent
of WIOC in the 1980s, which was only revealed to the citizens of
Antigua in a New York Times article, which sparked tremendous
controversy and eventually led to a lawsuit filed by Prime Minister
Spencer against Rappaport, Bird, and several other Antiguan
officials.
In February 2009, just two days before the SEC filed its suit
against Stanford, Rappaport paid the Antiguan government $12 million
to settle a $45 million lawsuit filed by the Spencer
administration for a scandal involving WIOC. The suit alleged that
Rappaport-owned IHI, a debt settlement company in Hong Kong,
had loaned Antigua $45 million in 1996 as part of the debt
consolidation. The terms of the loan specified a 25-year term
with payment of $400,000 per month, of which only $200,000 was
actually going to IHI. The other $200,000 per month was going
to Lester Bird. Antiguan member of Parliament Asot Michael,
a defendant in the suit, was represented by Hunton &
Williams, the law firm based out of Virginia that also represented Allen
Stanford and Stanford International Bank and has refused to
release files to the U.S. Justice Department. Stanford's trial is
not scheduled to begin until January 2011.
The International Monetary Fund cited the SEC lawsuit in the
April 2009 country report on Antigua, saying there was corruption
within the government. The report referenced no "recent"
expropriation of property, despite Antiguan court proceedings to
"compulsorily acquire" 49 Stanford-owned properties two
months prior.
Democratic and Republican Party Connections to Stanford's Antigua scam
Ross Gaffney, a former FBI agent who oversaw a task force
investigating Stanford's operations in the late 1980s at his first
offshore bank, Guardian International in Montserrat,
explained the FBI had "solid intelligence" on Stanford's alleged money
laundering activities in the late 1980s. And, while that
intelligence was enough to get Stanford's banking license revoked in
Montserrat, Gaffney said the Justice Department would have
never have been able to successfully prosecute the charges because
of the circuitous route the funds took to get to Guardian
International. According to Gaffney, Stanford was laundering money
for the Medellin drug cartel and the money would go from
Colombia through Ecuador and through several shell companies and
correspondent banks before being deposited in Guardian in
Montserrat.
WMR previously reported that Stanford was protected in
Ecuador by Peter Romero, Stanford Financial Group's Advisory Council
member and former US Ambassador to Ecuador and Assistant
Secretary of State for Western Hemisphere Affairs in the Clinton
administration. Other possible "helpers" on Stanford's
Advisory Council were Jorge Castaneda, the former Mexican Foreign
Minister;
Lee Brown, Drug Czar for the Clinton administration and
former mayor of Houston; Adolf Ogi, former president of Switzerland;
and Alfredo Arízaga, former minister of finance of Ecuador.
This complex pattern of international involvement, as well as
Allen Stanford's high profile associations with numerous U.S.
government officials lend credibility to what Atlanta
journalist Robert Coram laid out in his 1993 book, Caribbean Time Bomb:
The United States Complicity in the government of Antigua –
and perhaps explains it all:
"Any U.S. military aircraft, or aircraft owned by the CIA,
DEA, or other agencies, can land on Antigua without prior notice,
without prior approval, without the crew having to go through
Antiguan Customs, and without any record being kept of the landing.
This unusual arrangement is invaluable for all sorts of
mischievous operations in the Caribbean and Central or South America.
U.S. special operations troops have exercises in Antiguan
waters and are given considerable latitude in large parachute drops
and in storming beaches. Until a few years ago, they were
allowed to blow up reefs as part of their training. The price to play
in this little sandbox appears to be that Uncle Sam will
ignore all shenanigans of the Antigua government, including abuse of
its own citizens."
On June 8, 2010, the IMF announced it had finalized a $117
million loan to Antigua. The U.S. Director of the IMF voted in favor
of the loan!
In November 2009, Senator Richard Shelby, with seven
bipartisan co-sponsors, introduced a Senate Resolution to block aid to
Antigua until it released the Stanford properties, and paid
all outstanding loans and other payments made by Stanford "for the
purpose of subverting regulatory oversight." The Resolution
stated, "it is the sense of the Senate that the Secretary of the
Treasury should direct the United States Executive Directors
to the International Monetary Fund and World Bank to use the voice
and vote of the United States to ensure that any loan made by
the International Monetary Fund or the World Bank to the Government
of Antigua and Barbuda is conditioned on providing complete
redress to the victims…." The Resolution was referred to the Senate
Foreign Relations Committee, which has agreed to hold a
hearing on this issue on July 29, but they will not invite the IMF, the
Treasury Department, or the State Department to testify. The
Obama administration appears intent on burying the Antigua and
Stanford issue far into the ground. A House of
Representatives companion to the Senate Resolution was introduced in the
House
of Representatives on March 2, 2010, by Representative Mike
Coffman (R-CO), on behalf of Natalia Querard of H.M.B. Holdings
Limited. Querard, an American citizen who had her property,
the Half Moon Bay Resort, stolen from her in 2002. Nothing has
happened with the House Resolution.
Adding insult to injury, on June 10, 2010 Secretary of State
Hillary Clinton announced an additional $162 million in humanitarian
aid for AIDS and H.I.V. treatment in Antigua, on top of the
already committed Caribbean Basin Initiative funds allocated for this
year. In a joint speech with Antigua's Prime Minster Baldwin
Spencer, Clinton promised increased US participation in the Eastern
Caribbean region as she said "We are back 100 percent….We are
back and we are committed." Spencer responded with "our futures are
intertwined." The $162 million allocated mid-year in the
middle of a spending freeze is coming from the Department of Defense.
A July 1, 2010, New York Times article titled "Slump Cripples
Aid for Drugs to Treat H.I.V." discusses how thousands of Americans
from across the country with H.I.V. and AIDS are on waiting
lists and being denied medical treatment because of a lack of
funding.
