The Bush Administration is blocking efforts to rein in offshore banking.
Citigroup proclaims that its "private bankers act as financial architects,
designing and coordinating insightful solutions for individual client needs,
with an emphasis on personalized, confidential service." That is so colorless.
It might better boast, "We set up shell companies, secret trusts and bank
accounts, and we dispatch anonymous wire transfers so you can launder drug
money, hide stolen assets, embezzle, defraud, cheat on your taxes, avoid court
judgments, pay and receive bribes, and loot your country." It could solicit
testimonials from former clients, including sons of late Nigerian dictator Sani
Abacha; Asif Ali Zardari, husband of Benazir Bhutto, former prime minister of
Pakistan; El Hadj Omar Bongo, the corrupt president of Gabon; deposed
Paraguayan dictator Alfredo Stroessner; and Raul Salinas, jailed brother of the
ex-president of Mexico. All stole and laundered millions using Citibank
(Citigroup's previous incarnation) private accounts.
One lesser-known client, Carlos Hank Rhon of Mexico, has been the object of
a suit by the Federal Reserve to ban him from the US banking business. Hank
belongs to a powerful Mexican clan whose holdings include banks, investment
firms, transportation companies and real estate. Hank bought an interest in
Laredo National Bank in Texas in 1990. Six years later, when he wanted to merge
Laredo with Brownsville's Mercantile Bank, the Fed found that Citibank had
helped him use offshore shell companies in the British Virgin Islands to gain
control of his bank by hiding secret partners and engaging in self-dealing, in
violation of US law. One of the offshore companies was managed by shell
companies that were subsidiaries of Cititrust, owned by Citibank.
The Fed says that in 1993, Hank's father, Carlos Hank González, met
with his Citibank private banker, Amy Elliott, and said he wanted to buy a $20
million share of the bank with payment from Citibank accounts of his offshore
companies, done in a way that hid his involvement. Citibank granted him $20
million in loans and sent the money to his son Hank Rhon's personal account at
Citibank New York and to an investment account in Citibank London in the name
of another offshore company.
Citigroup spokesman Richard Howe said, "We always cooperate fully with
authorities in investigations, but we do not discuss the details of any
At press time, there were reports that Hank had negotiated a settlement
with the Fed, which the parties declined to confirm.
Nothing tests our commitment to principle like terrorism. Before September 11, America banned assassinations of foreign leaders; now the Administration is considering abandoning that prohibition. Before September 11, more than 80 percent of the American public felt that racial or ethnic profiling was wrong; today, that consensus is rapidly eroding, as FBI agents detain dozens of suspects solely because of their Arab or Muslim identity and associations. Ten years ago, Congress repealed McCarran-Walter Act provisions making mere membership in various political organizations a deportable offense. Now the Administration seeks authority to detain and deport aliens accused of virtually any tie to a terrorist group--defined expansively to include any group that has or might use weapons.
The September 11 terrorist attack undoubtedly warrants a comprehensive review of our intelligence and law enforcement capabilities. But what is needed is better-coordinated intelligence and more targeted law enforcement, not broad-brush legislation that simply throws more power at government agencies that have already shown a proclivity to abuse the power they have.
This country has a long tradition of responding to fear by stifling dissent, punishing association, launching widespread political spying and seeking shortcuts around the Constitution. Few Americans opposed the imprisonment of antiwar dissenters during World War I, the internment of Japanese-Americans during World War II or the anti-Communist laws of the McCarthy era. We now acknowledge that those initiatives were wrong, but have we learned from our mistakes?
To some extent we have. No one has yet proposed making membership in a Muslim organization a crime, detaining all Americans of Arab descent or Muslim faith, or criminalizing dissent. But in 1996, after the Oklahoma City bombing, we resurrected guilt by association, criminalizing any material support to any foreign group deemed terrorist by the Secretary of State, even if that support consisted of sending human rights pamphlets to an organization fighting a civil war. And now the INS seeks unprecedented authority to lock up and deport as a "terrorist" any alien remotely associated with a any group that has ever used force--even if the alien himself has no connection to violent acts.
And all indications are that the FBI continues to operate as if guilt by association is the rule. While the September 11 terrorists were training for and coordinating their conspiracy in Florida, the FBI was spending vast resources investigating Mazen Al Najjar, a Palestinian professor from Tampa who spent three and a half years in detention on secret evidence and charges of political association. Al Najjar was released last December when an immigration judge found no evidence that he posed a threat to national security. And while the terrorists were conspiring in New Jersey, the FBI focused its efforts on Hany Kiareldeen, a Palestinian in Newark detained for a year and a half on secret evidence for associating with terrorists. He was freed after immigration judges flatly rejected the government's charges as unfounded; the FBI's principal source was apparently Kiareldeen's ex-wife, with whom he was in a bitter custody dispute and who had filed several false reports about him.
The government already has adequate powers to combat terrorism. It has authority to wiretap any person suspected of working for a foreign government or organization, without any criminal predicate whatsoever. It can prosecute and freeze the assets of those who provide aid to terrorist organizations. It can bar entry to members of terrorist organizations, and it can detain and deport any alien who has engaged in or supported a terrorist act.
When, in less turbulent times, a bipartisan National Commission on Terrorism appointed by Congress recommended steps to improve our response to terrorism, it advocated none of the measures now advanced by Attorney General Ashcroft. Its advice was to streamline and coordinate existing authority, but that entails hard work and substantial turf battles; it's far easier, but far less effective, to give the FBI still more power to spy on the American people.
The drumbeat now begins, as it always does in time of war: We must accept limitations on our liberties. The FBI and CIA should be "unleashed" in the name of national security. Patriotism means uncritical support of whatever actions the President deems appropriate. Arab-Americans, followers of Islam, people with Middle Eastern names or ancestors, should be subject to special scrutiny by the government and their fellow citizens. With liberal members of Congress silent and the Administration promising a war on terrorism lasting "years, not days," such sentiments are likely to be with us for some time to come.
Of the many lessons of American history, this is among the most basic. Our civil rights and civil liberties--freedom of expression, the right to criticize the government, equality before the law, restraints on the exercise of police powers--are not gifts from the state that can be rescinded when it desires. They are the inheritance of a long history of struggles: by abolitionists for the ability to hold meetings and publish their views in the face of mob violence; by labor leaders for the power to organize unions, picket and distribute literature without fear of arrest; by feminists for the right to disseminate birth-control information without being charged with violating the obscenity laws; and by all those who braved jail and worse to challenge entrenched systems of racial inequality.
The history of freedom in this country is not, as is often thought, the logical working out of ideas immanent in our founding documents or a straight-line trajectory of continual progress. It is a story of countless disagreements and battles in which victories sometimes prove temporary and retrogression often follows progress.
When critics of the original Constitution complained about the absence of a Bill of Rights, the Constitution's "father," James Madison, replied that no list of liberties could ever anticipate the ways government might act in the future. "Parchment barriers" to the abuse of authority, he wrote, would be least effective when most needed. Thankfully, the Bill of Rights was eventually adopted. But Madison's observation was amply borne out at moments of popular hysteria when freedom of expression was trampled in the name of patriotism and national unity.
Americans have notoriously short historical memories. But it is worth recalling some of those moments to understand how liberty has been endangered in the past. During the "quasi war" with France in 1798, the Alien and Sedition Acts allowed deportation of immigrants deemed dangerous by federal authorities and made it illegal to criticize the federal government. During the Civil War, both sides jailed critics and suppressed opposition newspapers.
In World War I German-Americans, socialists, labor leaders and critics of US involvement were subjected to severe government repression and assault by private vigilante groups. Publications critical of the war were banned from the mails, individuals were jailed for antiwar statements and in the Red Scare that followed the war thousands of radicals were arrested and numerous aliens deported. During World War II, tens of thousands of Japanese-Americans, most of them US citizens, were removed to internment camps. Sanctioned by the Supreme Court, this was the greatest violation of Americans' civil liberties, apart from slavery, in our history.
No one objects to more stringent security at airports. But current restrictions on the FBI and CIA limiting surveillance, wiretapping, infiltration of political groups at home and assassinations abroad do not arise from an irrational desire for liberty at the expense of security. They are the response to real abuses of authority, which should not be forgotten in the zeal to sweep them aside as "handcuffs" on law enforcement.
Before unleashing these agencies, let us recall the FBI's persistent harassment of individuals like Martin Luther King Jr. and its efforts to disrupt the civil rights and antiwar movements, and the CIA's history of cooperation with some of the world's most egregious violators of human rights. The principle that no group of Americans should be stigmatized as disloyal or criminal because of race or national origin is too recent and too fragile an achievement to be abandoned now.
Every war in American history, from the Revolution to the Gulf War, with the exception of World War II, inspired vigorous internal dissent. Self-imposed silence is as debilitating to a democracy as censorship. If questioning an ill-defined, open-ended "war on terrorism" is to be deemed unpatriotic, the same label will have to be applied to Abraham Lincoln at the time of the Mexican War, Jane Addams and Eugene V. Debs during World War I, and Wayne Morse and Ernest Gruening, who had the courage and foresight to vote against the Gulf of Tonkin resolution in 1964.
All of us today share a feeling of grief and outrage over the events of September 11 and a desire that those responsible for mass murder be brought to justice. But at times of crisis the most patriotic act of all is the unyielding defense of civil liberties, the right to dissent and equality before the law for all Americans.
The United States cannot dodge its responsibility by withdrawing from the World Conference Against Racism.
CNN, regularly derided as 'liberal' by conservative commentators, is only liberal if that word stands for 'somewhat sane.'
Patricia Highsmith was a master writer of crime and suspense.
Two books on modern policing and the racial dynamics that go with it.
It's a slippery slope that these two lawgivers would have us tread.