Citi, Barclays among banks aiding corrupt regimes

SOME of the world's biggest banks have been accused of dealing with some of the most corrupt regimes on the globe.

Human rights and environmental campaign group Global Witnessalleged that the banks, which includeHSBC, Citigroup, Banco Santanderand Barclays, have “facilitated” corruption and denied some of the world's poorest people the chance to escape poverty.

Barclays Bank has had dealings with one of the world's most corrupt regimes.

Among its allegations are claims that Barclays kept open an account for the son of the dictator of oil-rich Equatorial Guinea, despite evidence that his family had looted the country's oil revenues. 

A US bank was closed down after it admitted breaching money laundering laws in its dealings with the regime.

The US bank, Riggs , based in Washington, DC, collapsed in 2004 after it admitted its dealings with the rulers of the country had breached US money laundering laws.

But Global Witness says that in 2007, the son of the president of Equatorial Guinea, Teodorin Obiang, still had an account with Barclays in Paris.

It says a police dossier shows that a cheque drawn on the account had been used to help buy a Ferrari 550, part of an "extravagant collection" of eight luxury sports cars he bought in France over a period of eight years.

Global Witness says Teodorin Obiang earns only $4,000 a month as minister in his father's government, but enjoys a playboy lifestyle, including a mansion in Malibu.

Teodorin Obiang's Luxury life-style

It says anti-money laundering laws required banks to carry out "due diligence" to identify their customers and turn down illicitly-acquired funds, and queries what checks Barclays carried out on him, and whether it had ever filed any suspicious activity reports in relation to his account.

In a statement Barclays said: "Customer confidentiality precludes us from commenting on any specific relationship or transaction or, indeed, whether we have entered into a transaction or provided financial services to a person or entity. 

The case is highlighted in the Global Witness report called "Undue Diligence" which details other examples of banks dealing with suspect regimes.

It claims that dozens of British, European and Chinese banks have provided Angola's opaque national oil company with billions of dollars of oil-backed loans.

President Obiang has ruled his country since 1979

Gavin Hayman, Campaign Director, said: "The same lax regulation that created the credit crunch has let some of the world's biggest banks facilitate the looting of natural resource wealth from poor countries.

"If resources like oil and timber are to truly help lift Africa and other poor regions out of poverty, then banks must be made to stop doing business with corrupt dictators and their families."

Global Witness also accuses HSBC and Santander, Abbey's Spanish owner, of frustrating US efforts to investigate the looting and laundering of Equatorial Guinea's oil revenues by hiding behind bank secrecy laws in Luxembourg and Spain. 

Global Witness, which was co-nominated for the 2003 Nobel Peace Prize for its work on so called conflict diamonds, accuses Citi of helping Charles Taylor, the warlord who is now on trial for war crimes in The Hague, to loot timber revenues in Sierra Leone and Liberia